January 26, 2001
MedPAC Approves Direct GME Reccomendation
At its Jan. 11-12 meeting, the Medicare Payment Assessment Commission (MedPAC) approved recommendations that will be included in its March 2001 Report and Recommendations to the Congress. In the graduate medical education (GME) area, MedPAC approved a recommendation to eliminate the 0.5 and 1.0 weighting factors that currently are used in determining Medicare direct GME payments, and instead count all residents at the 1.0 level through completion of a resident's first specialty or combined program and subspecialty if one is pursued. Under the current system, in general, residents are counted as a 1.0 full-time equivalent (FTE) through completion of their initial residency period or five years, whichever is longer. After this period, residents are counted as 0.5 FTE for as long as they remain in an accredited residency program. Indirect medical education payments would be unaffected by MedPAC's recommendation.
MedPAC's recommendation evolved from a mandate in the Balanced Budget Refinement Act of 1999 (BBRA) to address the issue of whether Medicare's initial residency periods should be extended for residencies requiring prerequisite years of training or for combined programs. Under MedPAC's recommendation, this issue is moot since residents would be counted as 1.0 throughout the full training period required by all combined programs. MedPAC's decision to make a recommendation that is broader than the BBRA mandate stems from the commission's view that Medicare should not be involved in influencing health workforce policy, and MedPAC believes the current 0.5 and 1.0 weighting distinction has that potential.
In other areas, the commission recommended:
- Increasing fiscal year 2002 Medicare hospital inpatient payments by the amount specified in current law, which is the increase in the hospital market basket less 0.55 percentage points;
- Replacing the sustainable growth rate (SGR) system under the Medicare physician payment system with an annual update based upon factors influencing the efficient costs of providing physician services;
- Providing pass-through payments for technologies under the hospital outpatient payment system only when the technology is new or substantially improved and adds substantially to the cost of care;
- Collecting occupational mix data and investigating differences across areas in wages for each type of provider and in the substitution of one occupation for another; and
- Including the costs of all poor patients in calculating the low-income shares used to distribute Medicare disproportionate share payments.
Information: Karen Fisher, AAMC Division of Health Care Affairs, 202-862-6140.
