August 7, 2014

IOM Issues Report on Medical Education Funding

The Institute of Medicine (IOM) has issued a report on the future of medical education funding. The report asks to what extent is the current graduate medical education system producing an appropriately balanced workforce ready to provide high quality, patient-centered, and affordable health care.


The IOM recommends significant changes to the current program, including:


  • Replacing Medicare's separate funds for indirect and direct graduate medical education (GME) with one direct payment to program sponsors based on a geographically-adjusted per resident amount
  • Maintaining aggregate support for Medicare GME at the current level, updated for inflation, while phasing out the current Medicare GME funding provided to hospitals over the next decade
  • Allocating financing to two distinct funds - one would support currently approved residency positions (operational) and the other would support innovation and planning for the future (transformational)
  • A new policy council to develop a strategic plan and federal policies for Medicare GME financing, and a new center at CMS to manage the GME funds and ensure transparency.


The committee strongly urged Congress to amend Medicare law and regulation to begin a phased implementation of the new performance-based program over a 10-year period. The IOM recommends that Medicare GME funding be leveraged toward the achievement of national health care objectives, and continued federal funding be delivered by a system that ensures transparency and accountability for producing a workforce suited to the needs of the health care system.


Contact Kathy Reep, vice president of financial services, at (407) 841-6230 for more information.