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Member Research & Reports

Member Research & Reports

GW: New Study Says Medicare Overpayments for Graduate Medical Education Could Total $1.28 Billion Annually

Researchers at the George Washington University Milken Institute School of Public Health (Milken Institute SPH) found if Medicare capped funds for Graduate Medical Education (GME) at the rate of $150,000 per resident, the move would free up more than $1 billion a year. The study was published October 7 in the journal JAMA Internal Medicine.

“Our study suggests Medicare GME may be overpaying some hospitals up to $1.28 billion annually,” said lead author Dr. Candice Chen, an associate professor of health policy and management at Milken Institute SPH. “Those funds could be redirected and used to strengthen the physician workforce, especially in underserved areas.”

Dr. Chen and her colleagues examined cost reports to calculate GME payments to hospitals from 2000 through 2015. They also calculated the potential savings to Medicare if GME payments were capped at the rate of $150,000 per resident – the GME rate used for the Teaching Health Center Graduate Medical Education (THC) program.

The study found that GME payment rates to hospitals in 2015 varied significantly, with 25 percent of hospitals receiving less than $105,761 while 25 percent received more than $182,233 per resident. The researchers found that in 2015 Medicare paid out an estimated $1.28 billion in payments that exceeded the THC GME rate.

The THC program was established to help ease shortages in primary care doctors and dentists in underserved areas. This program trains residents in community-based settings, like community health centers. Residents trained using this model are more likely to remain in primary care and practice in rural and underserved regions of the United States, Dr. Chen said.

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