IOM Releases New Report on Graduate Medical Education

01 August 2014 Health Care Law Today Blog

On July 29, 2014, the Institute of Medicine of the National Academies (IOM) released a report on Graduate Medical Education (GME). The 2001 IOM report, Crossing the Quality Chasm: A New Health System for the 21st Century, sparked debate and policy changes on health care quality that initiated changes in the law and payment structures relating to the health care system. There is every reason to believe that the GME report will have a similar impact on academic medical centers and teaching hospitals.

The report is the result of an independent review of the governance and financing of the graduate medical education system in the United States.

The 21 member IOM committee found that despite billions of public dollars being spent on GME since its inception in 1965 ($15 billion in 2012 alone, approximately $9.7 of which came from Medicare), there is minimal transparency or accountability in the GME financing system for producing the types of physicians that the nation needs. The committee calls for reforms in the way Medicare GME funds are allocated and increased oversight and accountability.

To reform the Medicare GME system the committee recommends:

  • A 10 year transition.
  • Keeping funding at same level.
  • Rewarding performance.
  • Phasing out the current payment system.

The committee recommends establishing a GME Policy Council in the Office of the Secretary of the Department of Health and Human Services and a GME Center within the Centers for Medicare and Medicaid Services to respectively develop policy and manage operations.

The committee also recommends allocating Medicare GME funds to two distinct subsidiary funds:

  • A GME Operational Fund to finance ongoing resident training activities.
  • A Transformation Fund to finance development of new programs, infrastructure, performance methods, payment demonstrations and other priorities identified by the GME Policy Council.

Some additional takeaways:

  • Statutes and regulations governing GME date from the start of Medicare in 1965 and still focus on hospital-based physician training.
  • Rules do not reflect changes in health care system.
  • The system needs to change to support more training in settings outside the hospital in order to treat chronic disease and provide preventive care.
  • Legislative action is necessary to change GME financing.

The committee’s findings and recommendations present another strategic challenge (and opportunity) for academic medical centers and teaching hospitals in this dynamic health care era.

The review was initially requested by the Josiah Macy Jr. Foundation and was supported by the ABIM [American Board of Internal Medicine] Foundation, Aetna Foundation, The California Endowment, California HealthCare Foundation, The Commonwealth Fund, East Bay Community Foundation, Jewish Healthcare Foundation, Kaiser Permanente Institute for health Policy, Missouri Foundation for Health, Robert Wood Johnson Foundation, and UnitedHealth Group Foundation, Health Resources and Services Administration, the Department of Veterans Affairs, and 11 senators.

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.

Related Services