Make Medicare GME formula more accountable, MedPAC says

A Medicare commission report calls on Congress to use pay-for-performance in funding graduate medical education.

By Chris Silva — Posted June 28, 2010

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Medicare financing of graduate medical education must be overhauled as part of the broader goal of health delivery reform, says the Medicare Payment Advisory Commission.

As part of its annual June report to Congress, MedPAC recommended increasing accountability for Medicare GME payments and making public more information about Medicare's payments and teaching costs. The commission also called for studies to examine specific aspects of health work force training.

"These reforms will help to leverage Medicare funding to achieve urgently needed changes to its medical education system," said Glenn Hackbarth, MedPAC's chair.

Specifically, the commission wants Congress to establish a performance-based incentive program under which GME payments would be made contingent on recipients achieving desired educational outcomes. Eligible institutions would include teaching hospitals, medical schools and other entities that sponsor residencies.

According to the June 15 report, "Aligning Incentives in Medicare," the Health and Human Services secretary would consult with experts from accrediting bodies, training programs and other health care organizations to develop a payment system that fosters greater accountability for Medicare GME dollars. Funding for the initiative should come from reductions in Medicare's indirect medical education payments, the panel said.

Inducing improvements

Another way to enhance accountability is to require Medicare to make GME payment information more accessible. "The transparency of this payment and cost information will recognize Medicare's significant investment in residency training and education," the report stated.

In addition, Medicare urgently needs to conduct an analysis on the current health care work force and its implications for the GME program, as the "resulting physician mix of specialties is unlikely to ensure that the nation has an efficient supply of health professionals" to support other effective delivery system reforms.

The commissioners were unanimous in voting for the GME recommendations. "I think what we've learned over the last few years ... is that there's a very different set of skills that's necessary to take care of people in an outpatient setting," said Commissioner Thomas M. Dean, MD, a family physician in Wessington Springs, S.D., at a MedPAC meeting held earlier this year.

"You need one set of skills when the patient comes to the emergency room with [a myocardial infarction]. You need a very different set of skills if you're going to try and prevent that event from occurring in the first place. ... We're pretty good at the first one. We're not very good at the latter, at least in our education programs."

Francis J. Crosson, MD, commission vice chair and associate executive director of the Permanente Medical Group, said Congress should adopt MedPAC's GME recommendations in light of the health system reform law. "If you look at the parts that are aimed at changes in the delivery system ... you get the sense looking through it that there's clearly something in there. There's a bias towards a system-based practice," Dr. Crosson said. "And that's likely, in the minds of many, to represent an improvement over what we have now."

AAMC opposition

MedPAC's recommendations are not viewed favorably by those who would be the most affected. The Assn. of American Medical Colleges represents 300 nonfederal major teaching hospitals, 131 medical schools and more than 100,000 physician faculty.

"We're supportive of the concept of making sure we educate physicians to be able to practice in the future health care system, but we think a better way to monitor that is through the accrediting body, which is already doing that," said Karen Fisher, AAMC senior policy counsel.

Fisher also suggested that, contrary to Dr. Crosson's comment, now would be exactly the wrong time to attempt such a major GME overhaul given other changes in the health system because of health reform.

"It would be a sea change in how medical education has been paid for," Fisher said. "This is not a good time to put direct medical education payments at risk when we're trying to do health reform."

The report also explores what the commission sees as the need for Medicare to have greater flexibility in being an innovative purchaser of health care. Proposals such as reference pricing, for example, in which Medicare would set a single payment for services that are considered to be clinically comparable, have "been limited by lack of clear legal authority," the report states.

MedPAC assessed Medicare's own projection for the physician fee schedule in 2011 and concurred with the finding. Unless Congress reverses the pay rate, the sustainable growth rate formula would subject doctors to a 26.2% pay cut in 2011. MedPAC released its report as lawmakers were trying to replace a 21% cut that began June 1 with a 2.2% raise through November, when the SGR formula would revert to its previous baseline.

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Other concerns

In addition to urging reforms of how Medicare pays for graduate medical education, the Medicare Payment Advisory Commission explored other delivery system issues, including:

  • Medicare's role in supporting quality improvement: To motivate doctors in Medicare through technical assistance.
  • Coordinating the care of dual-eligible beneficiaries: Examining characteristics and utilization patterns of dual-eligible beneficiaries.
  • Inpatient psychiatric care in Medicare: A survey of the current status of facilities and payments.
  • Addressing the growth of ancillary services in doctor offices: A review of physician self-referral, including the incentives to increase volume under fee for service.

Source: "Aligning Incentives in Medicare," MedPAC, June 15 (link)

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