Center for Medicare & Medicaid Services (CMS) Demonstration Project

Historically, Medicare has supported Graduate Medical Education (GME) programs through payments to teaching hospitals. These programs have evolved to meet the hospitals' needs for specialized care and largely ignored the public's need for generalist physicians. The 1997 Balanced Budget Act (BBA) placed caps on the number of interns and residents for which Medicare would pay training costs. In an effort to control costs, Medicare began to reduce payment for medical education, further separating hospital workforce needs from state workforce needs.

The Utah Medical Education Council (UMEC) submitted a waiver to the Health Care Financing Administration (HCFA), now known as Center for Medicare & Medicaid Services (CMS), in April 1997. The waiver requests a change in the method whereby GME funds flow to hospitals that sponsor GME training programs.

Once approved, this waiver was implemented under the name "Utah Medicare Graduate Medical Education Demonstration Project", also referred to as the 'Demonstration Project'. This project tests the feasibility of using public policy to rationalize and stabilize GME funding by linking Medicare GME funding to Utah's physician workforce needs.

The outcomes of this project are:

• Statewide workforce needs will guide GME funding

An outcome of the Demonstration project is to link medical education training to workforce requirements and direct the flow of funds to achieve specific workforce and training objectives.

• Public funding of GME must be fair and equitable to all participants
  

Funds will flow directly to sponsoring institutions based on identified workforce needs so that training can be provided in diverse inpatient and outpatient settings. This change requires CMS to waive its usual method of sending GME monies directly to hospitals and reroute the funds to the UMEC funding pool.

• Emphasis will be on the broadest good for the state
  

The UMEC is the entity which assesses statewide workforce needs and sets the priorities and criteria for funding GME programs based on those needs.

Related Links

UMEC Demonstration Project Poster

Utah Links Federal Funding for Graduate Medical Education to State's Physician Workforce Needs