Graduate medical education getting Medicaid support from fewer states

But the overall Medicaid funds spent on GME increased, according to a new nationwide survey.

By Doug Trapp — Posted June 16, 2010

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Several states have ended or considered ending their Medicaid funding for graduate medical education since 2005, but overall funding for GME still grew since then, according to a 50-state survey released in May by the Assn. of American Medical Colleges.

"Compared to earlier reports, this is a significant change in direction overall for Medicaid support," said Tim Henderson, MSPH, report author and consultant for AAMC. He's also a professor in the Dept. of Health Administration and Policy at George Mason University in Northern Virginia.

Most states provide additional Medicaid payments to teaching hospitals based on their direct and indirect costs of training medical residents. Direct costs include salaries of residents and the cost of their supervision. Indirect costs include higher spending on patients due to additional tests ordered by residents, for example. The federal government matches the state support.

Forty-one states and the District of Columbia made Medicaid payments to teaching hospitals for direct or indirect graduate medical education in 2009. Five states stopped since 2005, the year of Henderson's last survey: Massachusetts, Montana, Rhode Island, Vermont and Wyoming. Nine others said they recently considered ending Medicaid payments for GME: Michigan, Missouri, Nebraska, Nevada, New Hampshire, New Mexico, Oklahoma, Oregon and Pennsylvania.

"Now that states are in a financial crunch ... they're looking to cut spending wherever they can," said Christiane Mitchell, AAMC director of federal affairs.

However, overall state Medicaid support for medical education increased to $3.8 billion in 2009, up from $3.2 billion in 2005. Mitchell suggested that the increase might reflect new medical schools coming online or expansions of existing ones.

Medicare is the largest source of funding for GME; the federal program provided $9 billion in 2008, Mitchell said. New York provided $1.52 billion in Medicaid GME payments in 2009, by far the most of any state.

The report, "Medicaid Direct and Indirect Graduate Medical Education Payments: A 50 State Survey 2010," is available online (link).

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