Graduate Medical Education Financing: Why Care?

James R. Bean, MD, FAANS

Neurosurgical residency training may take a haircut. In a report issued in July 2014, the Institute of Medicine (IOM) recommended radical restructuring of Medicare graduate medical education (GME) payments. The report concluded with three recommendations:

1. Maintain Medicare funding at its current ($9.7 billion/year) level, but redistribute money by phasing out current Direct Medical Education (DME)/Indirect Medical Education (IME) funding categories and replacing them with a yet-to-be devised system of payment distribution that somehow recognizes and rewards training performance, accountability and innovation;

2. Centralize federal control of GME spending distribution by creating two new government agencies (a U.S. Department of Health and Human Services (HHS) GME Policy Council and aCenters for Medicare and Medicaid Services (CMS) GME Center) in the HHS to devise and administer new GME payment models; and

3. Establish two new GME funds: one (“Operational”) that temporarily issues payments by the older DME/IME model, and another (“Transformational”) that takes a gradually increasing share from the first fund to pay training programs based on new policies and performance criteria created by the GME Policy Council. (2) IOM recommendations commonly rationalize and presage legislative and regulatory action.


Josh Sandberg

Josh Sandberg is the President and CEO of Ortho Spine Partners and sits on several company and industry related Boards. He also is the Creator and Editor of OrthoSpineNews.

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