This publication
was produced for
U.S. Department of Health and Human Services
Health Resources & Services Administration
Office of Rural Health Policy
by Pat Taylor, Ph.D. under Contract # HHSH250200416005P
Contents
Executive Summary
Introduction
Chapter 1. Introduction to
the Funding of the Graduate Medical Education of Physicians
Chapter 2. Start of the Utah
Initiative to Align Graduate Medical Education and
Statewide Physician Need
Chapter 3. The Early Years
of the Utah Medical Education Council
Chapter 4. Increase in Utah's
Federal Graduate Medical Education Revenues
Chapter 5. Utah Gets Medicare
Graduate Medical Education Demonstration
Chapter 6. Lessons for Other
States
Chapter 7. Conclusions
References
Appendices
Appendix I. Utah Statute Creating
the Medical Education Council
Appendix II. Utah's Clinical Healthcare
Workforce: Achieving Balance Through 2020
Appendix III. Centers for Medicare
and Medicaid Services - Special Terms and Conditions: Utah Graduate
Medical Education Demonstration
Appendix IV. Utah Graduate Medical
Education Demonstration Waivers
Executive
Summary
Several National commissions have recommended
greater public involvement in Graduate Medical Education (GME) policy
to improve the specialty and geographic distribution of the future
physician workforce. A few States are using the leverage of public
GME funding to achieve some public accountability for the public
monies supporting graduate medical education. The State of Utah's
involvement in GME policy making is the most far reaching.
Utah is engaged in an experiment to infuse public
priorities into funding decisions on the education of advanced health
care professionals. A state-chartered commission is linking Utah's
graduate medical education funding and statewide physician workforce
needs. A central element of this experiment is Utah's groundbreaking
Medicare Graduate Medical Education demonstration. The state-chartered
Medical Education Council now receives and disburses all Utah Medicare
Direct Medical Education payments. The Council also has authority
within the demonstration to receive all Medicare Indirect Medical
Education payments and Medicaid Graduate Medical Education payments.
One goal of the demonstration is to use a portion of graduate medical
education monies for the public goal of increasing the number of
graduating physicians who choose to practice in rural areas.
Traditionally, graduate medical education funds,
including Medicare and Medicaid monies, have been paid to teaching
hospitals and it was they who then decided on the number and specialties
of residency training programs. As nearly all teaching hospitals
are located in cities, only a very small fraction of Medicare GME
payments go to rural hospitals. There has been no Medicare or Medicaid
requirement on teaching hospitals to take account of State or National
physician workforce needs in their decisions on how many GME programs
to support and in which specialties. Utah's Medical Education Council
is changing this. Council efforts are focused on expanding physician
residency programs in specialties in shortage, increasing the percent
of graduating residents who stay in Utah to practice and increasing
the number of graduating residents who locate in rural areas to
practice.
The Council staff has been successful in substantially
increasing Federal GME revenues flowing to Utah to fund graduate
medical education. In the course of its search for additional Medicare
GME revenues, the Council financial officer discovered that the
GME section of teaching hospitals' Medicare cost reports is more
accurate when compiled using a regional resident database rather
than the resident records of individual teaching hospitals. It was
found that in 1996 Utah's teaching hospitals had underreported GME
FTEs by approximately 10 percent on their cost reports amounting
to $2 million in Medicare GME earned but not claimed. Also the staff
have developed reliable data on the current health professions workforce
supply and projections for workforce need through 2020.
Utah's GME planning initiative may be a model for other States,
especially those with only one or two medical schools and a small
number of teaching hospitals. Nevada and Hawaii have begun to emulate
the model. The avenues used by Utah to increase its Federal Medicare
and Medicaid GME payments are worthy of consideration by other States.
In less than a decade, Utah has created a well-functioning
structure and process for linking the funding of graduate medical
education to rational planning to meet Utah's future physician workforce
needs. The Council is managing all Medicare DME payments to Utah
as well as additional monies provided by the State's teaching hospitals,
being used to increase the number of residents in training. The
Council is holding residency programs accountable for achieving
public goals. The Council's achievements are remarkable in today's
health policy environment in which health planning is in disfavor
and competition is widely promoted as the means for solving problems
of the health care system.
Introduction
There is growing concern among health policy experts
that the Nation needs more effective means to assure the training
of an appropriate complement of physicians. There is a chronic maldistribution
of physicians across the Nation, an oversupply and concentration
of specialists and a shortage of primary care physicians. Several
government and foundation commissions have considered means by which
to address these problems. (COGME, 1997, 1999, 2000a; Commonwealth,
1997; Pew, 1998). Their recommendations consistently include a larger
role for government in the policy decisions shaping the graduate
training of physicians. At present Federal and State governments
bear a large part of the cost of graduate physician training, but
have little input into decisions affecting the specialty mix of
physicians to be trained or their practice locations upon completion
of training. However, a few States are using the leverage of public
funding for graduate medical education (GME) to further public physician
workforce goals. (Henderson, 1998).
The State of Utah's involvement in GME policy
making is the most far reaching.
Utah is seven years into a bold experiment to infuse public priorities
into decisions on the shape of graduate medical education in Utah
how many physician residents will be trained, in which practice
settings, and in which specialities. A state-chartered commission
is charged with linking the funding of graduate medical education
to Utah's statewide physician workforce needs. A key element of
this State experiment in physician workforce planning is Utah's
groundbreaking Medicare GME demonstration. In this demonstration,
the state-chartered Medical Education Council is now receiving and
disbursing all Utah Medicare Direct Medical Education payments.
The Council also has authority within the demonstration to receive
all Medicare Indirect Medical Education payments and Medicaid Graduate
Medical Education payments. One of the goals of this demonstration
is to use graduate medical education monies to increase the number
of graduating physicians who choose to practice in rural areas.
In order that the reader may understand the innovative
character of this Utah experiment, we first describe the traditional
method by which graduate medical education has been funded in the
United States and, especially, how Medicare GME monies have been
distributed. The traditional method of financing physician residency
training programs, described below, evolved independently of any
deliberate linking of the size and specialty of residency programs
to community or regional physician workforce needs. This funding
arrangement continues to the present in spite of the fact that Federal
and State governments pay a substantial proportion of the costs
of physician resident education. It has contributed to the long-standing
shortage of generalist physicians, particularly in rural and inner
city communities.
Chapter
1. Introduction to the Funding of the Graduate Medical Education
of Physicians 1
The clinical training of a physician in a field
of specialization occurs in a residency training program. This level
of physician education follows completion of medical school; it
is termed graduate medical education (GME). The individual
training programs are called residency programs or residency
training programs and their graduate students are termed residents.
First-year residents are often called interns. Graduate medical
education has largely been funded from the patient care revenues
of teaching hospitals and other clinical training sites. Historically,
teaching hospitals treated GME costs as just another of the costs
of "doing business," and included them in all patient
care bills, including bills for Medicare and Medicaid insured patients.
In the 1980s, Medicare and Medicaid changed from this indirect method
of supporting graduate medical education to the method of making
explicit payments for GME costs. Medicare makes the largest explicit
payment for graduate medical education in the form of GME add-ons
to hospitals' bills for Medicare inpatients. Medicaid makes the
second largest explicit payment for GME costs, with most States
making some explicit per patient payment for graduate medical education.
Many State Medicaid agencies use a GME add-on payment method much
like Medicare's. A minority of States make a separate direct payment
to teaching hospitals for GME (Henderson, 2000). Private insurance
companies also pay some of the costs of graduate medical education,
indirectly rather than explicitly. GME costs are wrapped into the
hospital bills of some privately insured patients treated at teaching
hospitals. The government proportion of GME financing is estimated
at 40 percent by Medicare, 10 percent by Medicaid and one percent
by the Health Resources & Services Administration (HRSA), Bureau
of Health Professions. The balance is funded by hospitals' patient
care revenues from private insurers and faculty practice plan revenues.
(Bivano, 2001).
The Medicare GME payments to teaching hospitals
have two components: Direct Medical Education payments (DME) and
Indirect Medical Education payments (IME). DME payments are designed
to reimburse teaching hospitals for Medicare's share of the costs
of salaries and fringe benefits paid to medical residents, interns
and supervising faculty, malpractice insurance for residents and
administrative expenses. These expenses are typically borne by the
teaching hospital utilizing the resident. A hospital's Medicare
DME add-on to each inpatient bill is a fixed amount per resident
based on its reported GME costs in 1984 adjusted for inflation and
Medicare's share of inpatient days at the hospital.
Indirect Medical Education costs (IME) are a
substantial, but difficult to define, element of the hospital costs
of resident training. These expenses are related to the higher costs
associated with training, such as additional diagnostic tests ordered
by residents learning how to make diagnoses, higher staffing ratios,
and the higher percentage of patients in teaching hospitals with
complex conditions that necessitate costly treatment (U.S. Congress,
1999, 106). Medicare IME is paid as an add-on to a teaching hospital's
diagnosis-related payment (DRG) for care of Medicare inpatients.
The greater the number of residents training in a teaching hospital,
the larger the IME add-on to the basic DRG price. The formula for
the add-on amount is principally a function of three factors: the
basic payment for the patient's diagnosis times, the Congressionally-set
IME adjustment percentage times, and the hospital's ratio of residents
to beds. However the Congress has always set the IME adjustment
percentage much higher than the actual indirect teaching costs of
teaching hospitals initially at double the empirical costs
and currently at more than double the empirical costs (MedPAC, 2003,
56). For teaching hospitals with a high IRB ratio, the IME add-on
can be very substantial. In FY 1999, 10 percent of hospitals received
IME add-ons to their DRG payments of more than 29 percent (MedPAC,
1999, 7).
Medicare's annual expenditure for graduate medical
education amounts to a great deal of money; in FY 2002 it totaled
more than $9 billion, with 30 percent for DME and 70 percent for
IME (CMS, 2002, 5). Historically there was no limit on the number
of residents for which a teaching hospital could receive Medicare
GME payments. The Medicare IME add-on was a powerful incentive to
teaching hospitals to increase the number of residents training
in their hospitals, irrespective of regional or national workforce
need. This incentive was ended by Congress in 1997 in the Balanced
Budget Act (BBA) which capped the number of residents eligible for
GME payments at each teaching hospital. The BBA halted the unlimited,
continuous increase in the number of residents, but this did not
reduce teaching hospitals' interest in maintaining their Medicare
IME revenues. As noted above, these revenues are approximately twice
as much as their actual indirect teaching costs for care of Medicare-insured
patients. Also, and importantly, residents are inexpensive healthcare
practitioners for teaching hospitals. Their salaries are paid in
part by Medicare and they are less expensive and more flexible than
full-priced physicians and nurses.
Because GME monies have been paid to teaching
hospitals, it is teaching hospitals and/or their health system owners
that have decided on the number, size and specialties of residency
training programs, subject to some accreditation constraints. Understandably,
these decisions have been made in terms of what is best for the
hospital. Most teaching hospitals are urban, tertiary care hospitals
which provide complex treatments by highly specialized physicians.
This specialized role of teaching hospitals has fostered a bias
away from training generalist physicians and toward training specialists
and sub-specialists. Also, in making GME program decisions in difficult
financial times, a hospital may consider which physician specialties
will most increase admissions, which types of admissions are most
profitable for the hospital and which specialties are key providers
of expensive inpatient care. These bottom-line considerations reinforce
the bias toward training speciality physicians. The Medicare GME
payment rules have further biased graduate medical education toward
the training of hospital-based physician specialists and away from
office-based generalist physicians. This is because the IME payments
to teaching hospitals are tied largely to inpatient counts.
In Medicare payments to teaching hospitals, the
DME and IME add-ons are not separately identified, but rather are
bundled with the inpatient DRG payments. Although hospitals could
calculate and separately track the GME payments in their books,
few if any do. Rather the total payments from Medicare (DRG + DME
+ IME) are entered as general operating revenues and the hospitals
are under no obligation to use the GME payments for medical education.
This payment arrangement is problematic for residency
training programs which are usually operated by medical school departments,
for example, departments of general internal medicine, obstetrics
and gynecology, and cardiology. As the residency programs do not
directly receive the Medicare DME payments, they must negotiate
with the teaching hospitals for funding. The hospitals can allocate
more or less to the residencies than the DME monies paid to them
by Medicare. This arrangement puts residency programs in a vulnerable
position vis-a-vis the teaching hospitals. This is especially the
case for residency programs in the less profitable specialties such
as family medicine.
The historically-based pattern of linking GME
payments to inpatient care has been problematic for the financing
of programs to train the office-based generalists who supply most
rural health care especially family practice physicians and,
to a lesser extent, general internal medicine physicians. Only a
very small proportion of Medicare GME monies are paid for resident
training in ambulatory clinic sites, and this only since the 1997
Balanced Budget Act.
After Medicare, Medicaid is next largest public
payer of graduate medical education. A few States most notably
Michigan, Minnesota and Tennessee have Medicaid GME initiatives
that require residency programs to have accountability to public
need (Henderson, 1998).
There has been no Federal requirement on teaching
hospitals to take account of State or National physician workforce
needs in their decisions on how many residents to support and in
which specialties. It is this decision-making calculus which Utah
is changing by shifting decision-making about GME programs
from teaching hospitals and health systems to a State commission
which can base these decisions in some part on Utah's current and
future physician workforce needs.
Graduate medical education and the training
of rural physicians.2 Primary care physicians
predominate in rural practice, especially in small towns. Family
practice is the most common specialty for the physician workforce
of rural areas: it comprises 41 percent of the physicians practicing
in small rural towns of less than 10,000 people, the places in which
physicians are in shortest supply (Larson, 2003). The decision of
family practice physicians to practice in rural places is positively
related to the curriculum and location of their residency training.
A survey of 96 percent of all family practice residency programs
suggests that a program being located in a more rural State, being
located in a smaller population center, having an explicit mission
for rural health and having a required rural rotation all increase
the likelihood that graduates of a program would locate in a rural
area. The larger a program's number of required rural months, the
greater the likelihood of the graduates choosing rural practice.
Nineteen family practice residencies with three to six months of
required rural training responded to the survey; they reported approximately
50 percent of their graduates chose rural practice, compared to
25 percent of family practice residency graduates who had no required
months of rural training (Bowman, 1998). A promising strategy for
expanding the months of rural training was developed in family practice
graduate medical education in the late 1980s the rural training
track (RTT). In these tracks, the residents spend their first year
in a large urban teaching center and their second and third years
in a family practice in a small, remote rural community with a community
hospital. The subsequent practice locations of RTT graduates have
been studied by Rosenthal and others who found 76 percent of RTT
graduates were practicing in rural towns of less than 25,000 and
65 percent were providing obstetrical services. (Rosenthal, 2000).
This is a very high yield of rural physicians. Unfortunately there
are fewer than fifty RTT programs and many of them have had difficulty
filling their resident openings.
The urban concentration of Medicare GME payments.
A teaching hospital is a hospital which provides clinical medical
training to residents. Because nearly all teaching hospitals are
located in cities, only a very small fraction of Medicare GME payments
go to rural hospitals in FY 1995, one percent went to rural
hospitals and 99 percent to urban hospitals. Only $70.5 million
of roughly $6.4 billion was paid to hospitals in nonmetropolitan
counties, and only 1.5 percent of all residents trained in these
hospitals (Slifkin, 1999). This rural-urban imbalance in GME programs
and payments has policy significance because physicians trained
in rural places are more likely to practice in rural places than
those trained in cities.
Chapter
2. Start of the Utah Initiative to Align Graduate Medical Education
and
Statewide Physician Need
A. State health policy commission foresees
health workforce crisis.
In the early 1990s, the Governor of Utah created
a health policy commission in order to focus attention on statewide
healthcare problems and options for addressing them. The commission
members, appointed by the Governor, included State legislators,
business leaders and health care industry leaders. Each year the
commission identified two statewide health care problems it would
examine in depth. The Utah experiment described in this report grew
out of the commission's 1995 decision to look into (1) the financial
threats to the survival of Utah's only academic health center
the University of Utah Health Sciences Center which includes the
University Hospital and the University Medical School's many residency
training programs and (2) the adequacy of Utah's health care workforce.
At that time, the rapid spread of managed care
in Utah for both privately and publicly insured patients, was having
an adverse financial impact on Utah's leading hospitals, which also
were its teaching hospitals, especially the tertiary care University
Hospital and Intermountain Health Care's (IMH) teaching hospitals.
Managed care plans were under no obligation to support graduate
medical education costs in their payments to teaching hospitals
for patient care. Rather, University Hospital and other Utah teaching
hospitals received only the payment amounts they could negotiate
with these managed care plans. The teaching hospitals' costs made
them uncompetitive with non-teaching hospitals: graduate medical
education added about $600 per discharge to their costs. When the
Governor's health policy commission challenged Utah HMOs to support
graduate medical education through their payments to hospitals,
they declined. This response from the HMOs was an impetus for the
creation of the Utah Medical Education Council and its pursuit of
a Medicare GME demonstration. A second impetus was the potential
growth of Medicare managed care at-risk plans. In the mid-1990s,
GME add-on payments were not carved out of Medicare payments to
risk plans. (This was changed in the 1997 Balanced Budget Act.)
Rather, Medicare's payments to risk plans included the GME monies,
which the risk plans were under no obligation to pass on to teaching
institutions as part of their payments for inpatient care of their
Medicare-insured patients. In addition, Congress seemed likely to
reduce Medicare IME payments in the near future. In 1996, the Congress
was considering a proposal to reduce the IME adjustment from 7.7
percent to 5.0 percent, which change would reduce total IME payments
to Utah by 35 percent (Osborn, 1996, 12) Loss of graduate medical
education payments threatened Utah's teaching hospitals and its
physician residency training programs. Any decrease in resident
numbers would likely decrease the State's physician numbers.
The health policy commission was also concerned
about the lack of any system-wide planning for the State's future
physician workforce needs. Because of Utah's high birthrate, the
State's population was increasing much faster than the Nation's
population. It seemed likely Utah hospitals and communities would
experience increasing difficulty in recruiting enough physicians,
and there was already a shortage of physicians in rural areas and
inner cities.
Determining the costs and revenues of
advanced clinical education in Utah. The Governor's health policy
commission was concerned with issues involving the education of
health care professionals, but no one in Utah had any idea of how
much money was being spent on health professions education. In 1996,
the commission contracted with the Deloitte and Touche consulting
group to determine both the cost and the revenue that was supporting
graduate medical education, medical student education, nursing education,
pharmacy education and physician assistant education in Utah. Deloitte
and Touche found the total annual cost of these programs to be more
than $130 million in 1998 dollars. Of the total amount, 66 percent
was spent for graduate medical education, 14 percent for medical
student education, 14 percent for nursing education, five percent
for pharmacy education and one percent for physician assistant education.
The annual training cost per physician resident was $215,000. This
compared to per resident National average costs for family practice
and pediatrics of $ 330,000 (Elison, 2003). Of Utah's per resident
annual cost of $215,000 in 1996, $100,000 was funded by Medicare
GME, $30,000 by Medicaid (with a 3 to 1 Federal / State match ratio)
and the balance of $85,000 was absorbed by Utah's hospitals and
institutions of higher learning (Elison, 2003).
B. Utah seeks Medicare GME demonstration project.
As the study of Utah costs and revenues for health
professions education was getting underway, the health policy commission
developed a plan for rationalizing graduate clinical education in
Utah. This plan was fleshed out in a concept paper written by Dr.
Lucy Osborn, Health Policy Commission member and Associate Vice
President for Health Sciences at the University of Utah, and was
endorsed by the Governor and the University of Utah (Osborn, 1996).
The plan's central idea was that all funding
in Utah for graduate clinical education would ultimately be controlled
by a statewide health professions education consortium. Initially,
the consortium would focus on graduate medical education since the
Federal government, through Medicare, was the largest single funder
of the largest cost item in health professions education, namely
physician residency training. Consortium goals were to implement
a State workforce policy so that an appropriate number and mix of
physicians receive training, create an organization to accomplish
this, and ensure appropriate preparation for future practice by
shifting more training from inpatient to outpatient settings and
to rural and inner-city training sites. The consortium members would
represent all vested parties, including State government, educational
institutions and health systems with physician residency training
programs, community representatives and funders. The consortium,
in conjunction with the State, would "determine the total number
of graduate medical education positions available within the State,
determine the mix of positions by specialty, and allocate resident
positions to specific programs. The consortium would be responsible
for funding all residency positions and for reimbursing health systems
and facilities for the indirect costs associated with training"
(Osborn, 1996). The initial funding would be all Medicare IME and
DME payments to Utah institutions.
In Spring 1996 Dr. Osborn began efforts to enlist
CMS's, formerly HCFA, support for a five year demonstration to link
Medicare GME funding with Utah's future physician workforce needs.
In the proposed demonstration, all Medicare GME payments to Utah
organizations would be paid directly to a Utah educational consortium.
These payments would include all Medicare GME monies currently being
paid to Utah teaching institutions as well as all GME monies currently
included in payments to Medicare risk plans for Utah Medicare beneficiaries
enrolled in such plans. CMS staff were interested in the proposal
because it brought to their attention for the first time the large
decrease in Medicare funding of graduate medical education programs
nationwide which would be an unintended consequence of major proportion
of a substantial increase in Medicare enrollments in managed care
at-risk plans.
CMS advised Dr. Osborn that, for the agency to
entertain the concept of a demonstration of the carve-out of Medicare
GME monies from teaching hospital and HMO payments and their redirection
to a State graduate medical education consortium, the proposal would
have to come to CMS in the form of an unsolicited demonstration
proposal. Through the winter of 1996-97, members and staff of the
Utah Health Policy Commission worked on a demonstration proposal.
During this time period, a team from CMS headquarters visited Utah
to learn more about the proposal. This team suggested the demonstration
be carried out in a step-by-step fashion, and this suggestion was
incorporated in the demonstration application submitted in April
1997.
During the years, 1997 to 2000, Utah's experiment
in shifting control over graduate medical education funding to a
statewide organization moved ahead on other fronts. Certainly the
decision and efforts to obtain a Medicare GME demonstration were
influential in energizing important stakeholders to work toward
systematic statewide planning and funding of graduate medical education.
But a good deal was accomplished to strengthen graduate medical
education planning in the years before the demonstration finally
got under way. One accomplishment was the creation of a state organization
to take charge of rationalizing graduate medical education in Utah.
The Governor's health policy commission worked with the State legislature
on this.
C. The Utah Medical Education Council is born.
In 1997, the State legislature created the Utah
Medical Education Council (Appendix I). The Governor appointed the
first members of the Council in Summer 1997, and the Council was
formally in business although it would not have any paid staff until
mid-2000. The Council's responsibilities were to: protect current
funding of graduate medical education and seek additional revenue
streams; obtain and manage Federal Medicare and Medicaid waivers
so that these Federal graduate medical education funds are linked
to addressing Utah's physician workforce requirements; build sound
databases on Utah's current health care workforce; develop projections
of future workforce needs; and develop strategies to ensure Utah
has the needed number and mix of healthcare professionals.
Quasi-governmental public commission.
With forethought, the legislature created the Council as a quasi-governmental
entity, under a special section of the Utah code. This status has
been critical to the successful functioning of the Council. For
example, the GME payments to the Council are exempt from appropriation
by the State, to protect the Council's revenue stream. Otherwise,
the legislature would have been able to re-appropriate GME monies
for another purpose it might deem of higher importance. This exemption
would enable the Council to guarantee to CMS that all Medicare GME
monies which it received would be used only for graduate medical
education and to ensure that none of these funds could be directed
elsewhere by the State legislature.
Additionally, the Council is exempt from the
State pay scale, and so is able to pay market rates to hire expert
staff. For contracting purposes, the Council does not have to operate
using the State's bidding process, which enables the Council to
act quickly when this is important. Finally, the Council was given
clear statutory authority to collect data and handle proprietary
and confidential information. This enables the Council to use governmental
authority to collect data, some of which is proprietary and confidential,
without being in violation of antitrust law.
Council membership and structure.
The Medical Education Council's structure and processes are typical
of public commissions. The Governor-appointed Council is the decision-making
body. Council actions are based largely upon the recommendations
developed by its standing committees which are supported by the
professional staff. All the key organizational stakeholders are
represented on the Council and on the standing committees. At each
level, any differences among stakeholders are identified early and
so are understood by all, which has facilitated the development
of a consensus.
The Council is appointed by and answers to the
Governor. Its permanent chair is the dean of the University of Utah's
School of Medicine and its nine voting members are appointed by
the Governor. All the key stakeholders in Utah graduate medical
education policy have a seat on the Council. The voting members
include one representative from each of the four institutions that
sponsor an accredited graduate medical education program, a representative
of Utah's health care insurance industry and four representatives
of the general public. Any additional institution sponsoring a new
residency program will automatically be given a seat on the Council
and an additional representative of the general public will be appointed.
Three of the sponsoring institutions also have teaching hospitals:
the University of Utah and the Veterans Administration (VA) Salt
Lake City Health System have one each; Intermountain Health Care
has four. The VA receives separate funding for its residency training
programs and is not a recipient of Medicare or Medicaid GME funds.
(UMEC, 2000, 24).
The Council's composition is central to its ability
to make changes in the allocation of graduate medical education
funds. Because all the key institutional players in graduate medical
education in Utah have seats on the Council and committees, their
concerns are addressed as policies are being developed. This feature
of its membership has been important to the Council's success in
making decisions which have put statewide interests and concerns
above those of individual institutions. It may also have limited
the options considered by the Council, because the Council seeks
solutions that will not have negative impacts on any sponsoring
institution. This has proven positive as members have voluntarily
offered multiple ways of addressing the overall statewide requirements
even when this required some compromise by their institutions. With
unanimity on the solutions, there has been good follow through in
the implementation phase.
Committees. The Council's committees
are appointed to serve until their charge has been accomplished.
Committees bring together experts with those who have a vested interest
in the committees' areas of responsibility.
The Finance Committee has been in place since
the Council's beginning. Its members include second-level finance
executives from the large teaching hospitals who answer directly
to the chief financial officers, as well as a representative of
the State's Medicaid agency. This committee was established to recommend
policies and procedures for financing graduate medical education
in Utah. It reviews all matters which make any changes to the process,
amount or methods for transferring funds for GME.
The Workforce Committees are appointed by profession
to oversee the surveys and produce reports with projections of workforce
requirements and the mix between professions. Once these reports
are completed, implementation committees are appointed by profession
to develop strategies to achieve the projected workforce requirements.
The Physician Workforce Committee, the Advanced Practice Nurse Committee,
and Physician Assistant Committee produced the Council's Year 2000
report, discussed below. With their charges completed, these committees
were dissolved. A PharmD. Workforce Committee produced a separate
report which addressed pharmacy requirements at the retail level
and at the hospital level.
The Physician Implementation Advisory Committee
(PIAC) was formed when the report on the physician survey was completed.
PIAC's responsibility is to recommend by specialty the number of
physicians needed, allocate training slots supported by funds controlled
by the Medical Education Council, and suggest graduate medical education
program changes according to changing statewide needs. As discussed
below, this committee has been actively involved in the implementation
of the Medicare GME demonstration.
In 2004, a new group of committees was appointed
to analyze the results from a second round of surveys conducted
in 2003 for physicians, nurse practitioners, and physician assistants.
These committees will look at the change during the four years in
such areas as retention and recruiting by specialty, urban and rural
requirements, and future capacity in areas of high population growth.
Broadened perspective of GME stakeholders.
It is worth remembering that, in 1997 when the Council was created,
few of the stakeholders in graduate medical education in Utah or
in the Nation were viewing their GME interests and concerns in the
light of their responsibilities toward meeting regional health workforce
needs. Many of the Council and committee members have now been thinking
and working on GME funding and supply issues from a statewide perspective
for more than five years. From the content of the Council's discussions
and decisions, it can be seen that many members now have a statewide
perspective on these matters. At the same time, they continue to
be concerned to protect the interests of their institutions as they
weigh institutional concerns against statewide concerns. Their public
support as Council members for Utahns' legitimate interest in these
issues has also likely influenced their own thinking and perspectives.
Transparent decision-making process.
The existence of the Council has brought a much more open process
to decision-making on graduate medical education programs, with
the decisions being made explicitly to address statewide physician
workforce needs. This replaces the previously closed processes for
each teaching hospital in which residency programs were established
or expanded.
Experience in collaborating. The
membership of the Council and its committees has been highly stable.
Most of the Council members have now been working together for more
than five years. Over these years, they have formed new working
relationships in the course of doing council work, which seem likely
to facilitate future joint efforts. They have experienced the benefits
for Utah and their own institutions which can come from cooperating
with traditional competitors. In group interviews, they enunciated
their positive feelings about the successes of their collaborative
efforts.
Council staff. Staffing of the Council
had a slow start-up. For its first three years, 1997 to 2000, the
Council had no paid staff of its own. Its Executive Director was
on loan from the State Health Department and its finance expert
was a full-time employee of the University of Utah Academic Health
Center. It was mid-2000 before the Council was able to employ these
two people as its first two full time professional employees:
Gar Elison, Executive Director, and David Squire, financial officer.
The experience and training which they brought to the Council and
their deep personal commitments to the Council's goals have been
critical in important achievements of the Council. Both are familiar
with all the geographic reaches of this large state. Both have worked
in health care policy in the State capital for a number of years
and have a wide circle of professional acquaintances in State government,
academic health care organizations, health care insurers and hospital
management in Utah. The Council staff remains small. In summer 2004,
the Council had only five full-time professional employees and an
administrative assistant. It also had several part time interns
from University of Utah and Brigham Young University graduate programs.
Despite it's size, the staff has made a number
of important contributions to the strengthening of graduate medical
education in Utah. One major contribution has been providing assistance
to the Council and committees in developing work agendas and decision-making
processes. Other contributions stem from the very fact of having
expert staff working full time on the Council's mission. Staff are
alert to opportunities for expanding residency programs and funding
and to threats to existing residency programs.
One example is the "rescue" of the
St. Mark's family medicine residency which has 15 percent of Utah's
family practice training capacity. In the late 1990s, a national
for-profit hospital chain decided to end the sponsorship of all
residency training programs by its hospitals, including the one
at Salt Lake City's St. Mark's Hospital. Council staff assisted
this residency program in moving to its own nonprofit foundation.
When the residency was later threatened with a crushing financial
deficit, Council members and staff convinced State legislators to
appropriate $500,000 to stabilize the residency on the basis it
was in the State's interest to have a well-trained workforce. Without
these funds, the program would likely have closed. The Council's
financial officer has been alert to other revenue sources for this
residency program. (UMEC, 2000b) For example, he suggested that
Veterans Administration podiatry residents could do rotations in
St. Mark's model family practice clinic. This would give the podiatry
residents experience with a wider range of pathologies, and would
financially benefit the family medicine residency program by virtue
of VA GME payments for the training provided to its residents.
A second example is their assistance to the small
graduate dental residency program at the University of Utah academic
health center. The Council financial officer recognized that this
program had financial support for expanding. Because dental residencies
were not included in the 1997 BBA cap on residency positions, the
dental program would be eligible for additional Medicare and Medicaid
GME payments if it were to add residents. This one-year program
has expanded from six to 10 residents. It was encouraged by the
Council to have its residents do a rural rotation and, with its
added revenues, the program could afford to do this. It added a
required one-month rotation to a very rural clinic serving American
Indians. This collaboration between the Council staff and the University
Hospital's dental training programs has also led to discussions
within the world of dentists' in Utah about starting a dental
school in Utah to alleviate the shortage of dentists, especially
in rural areas and inner cities.
Chapter
3. The Early Years of the Utah Medical Education Council
A. Building the databases for health workforce
planning and policymaking
From the outset, as the Governor's health policy
commission was developing the concept of a State Council in charge
of linking the planning and funding of health workforce education
in Utah, it intended for the Council's decisions to be based on
sound empirical data. The new Council would start its work by determining
the characteristics of the present health workforce. This information
would be used to develop projections of the State's future workforce
needs, and then the Council would assess Utah's training capacity
for meeting these needs. The health policy commission and the legislature
wanted special attention paid to the adequacy of the physician workforce
for rural areas, both in the present and the future.
In 1997, the Council executive director, aided
by University of Utah public administration interns, began by tracking
down existing data on the physician workforce in Utah, and found
that several Utah State agencies and national organizations had
data on Utah's health workforce. However, when the data from these
several sources were compared, they were found to vary over a wide
range, as has been found by others making similar comparisons (Ricketts,
2000). The American Medical Association reported 4,190 patient care
physicians practicing in Utah in 1998, the U.S. Department of Health
and Human Services, Health Resources and Services Administration,
reported 3,280 and the Utah Department of Workforce Services reported
7,680. The Council members understood the importance of having trustworthy
data for their work, and when they learned of these widely differing
estimates, they realized the Council would need to do its own data
collection.
During 1998 and 1999, Council staff worked with
other State officials and hundreds of health care leaders in Utah
to complete surveys of Utah's licensed physicians, advanced practice
nurses, physician assistants and doctors of pharmacy. These surveys
established the number of FTEs in each of the professions, their
age distribution, their geographic distribution, their years and
types of education and the location of educational institutions
attended, years of active work remaining before likely retirement
age, specialty, among others. Once the survey data were in hand,
the Council staff worked on the large and complex task of assessing
the adequacy of the current workforce and projecting the State's
future workforce requirements for these professions.3
They found the current clinical workforce in Utah to be marginally
adequate in comparison with national ratios of these practitioners
to population. The rural supply of primary care practitioners was
difficult to quantify. With 96 percent of Utah's land mass and 24
percent of its population in rural counties, some rural communities
had sufficient practitioners while others had a critical shortage.
Population growth in Utah was found to be the
major determining factor in the State's future clinical workforce
requirements. Utah's population growth rate was well above that
of the Nation, and the State's population was expected to increase
by 48 percent between 2000 and 2020. Holding other factors constant,
the total workforce increase needed to serve these additional millions
of Utahns was projected to be a 50 percent increase in the number
of physicians (an additional 1,800), advanced practice nurses (an
additional 342) and physician assistants (an additional 124). Providing
care for the large increase by 2020 in dependent populations
the 0-14 age population and the population 65 and older would
require similar numbers of additional physicians, advanced practice
nurses and physician assistants. On top of the effect of these factors
on the need for health care practitioners, projected retirement
rates in the next 20 years would require the recruitment of as many
physicians as were now in practice in Utah and 80 percent as many
advanced nurse practitioners and physician assistants.
Health care workforce databases. As
a result of these data collection efforts, Utah started the 21st
century with an accurate, detailed picture of its health care workforce.
The Council currently has workforce databases for the following
health professions in Utah: physicians, advanced practice nurses,
registered nurses, licensed practical nurses, physician assistants,
pharmacists and podiatrists. These health care workforce databases
are available for analysis to other organizations interested in
the characteristics of Utah's health care workforce.
B. Setting Workforce Goals: the Utah Medical
Education Year 2000 Report
With information in hand on Utah's present clinical
workforce of physicians, advanced practice nurses, physician assistants
and pharmacists, future clinical workforce requirements and the
State's clinical training capacity, the Council was in a position
to weigh policy options for meeting the State's projected clinical
workforce requirements through 2020. Their deliberations had an
urgency driven by projections showing Utah was on the verge of a
crisis in its health care workforce.
The Council decided to concentrate most of its
energies on options for increasing the physician workforce. One
option was to expand the training capacity of the University of
Utah School of Medicine, which had remained constant since 1972
with a yearly enrollment of 100 students. Analysis showed that,
just to meet Utah's current physician workforce need, the medical
school's capacity would have to be doubled. Even then, the State
would be slipping behind the population growth curve. Both financially
and clinically, a doubling of the medical school's capacity would
be difficult, requiring sustained funding for faculty and support
staff, capital funds for construction of training space, and locating
the necessary number and variety of patients for its training programs.
The other options considered by the Council were maintaining and
increasing the size of Utah's existing residency training programs,
facilitating the start of new residency programs in needed specialties
which had no residency program, and retaining in Utah a higher proportion
of residents graduating from the State's residency training programs.
The choice of these options was influenced by the Council's survey
findings that completion of residency training in a Utah program
was the single most important determinant of choosing to practice
in Utah. The Council's executive director stated, "If we expand
our residency programs and can retain 60 to 70 percent of graduating
residents, we can meet our workforce requirements in a number of
specialties." These strategies made economic sense in light
of the relative cost of training residents in Utah and, postgraduate
retention to practice in Utah.
To address Utah's chronic shortage of physicians
and other health care professions in rural areas, in particular,
the Council decided to increase the amount of training underway
in rural places, focusing on ambulatory sites and hospitals. Council
activities to increase the amount of training taking place in rural
locations include The Utah Medical Education Council's goals, objectives
and action plans are detailed in its 2000 report: Utah's Clinical
Healthcare Workforce: Achieving Balance Through 2020 4
and the development of the healthcare workforce databases. These
activities were essential groundwork for the Utah Medicare Graduate
Medical Education Demonstration which began in July 2003.
Chapter
4. Increase in Utah's Federal Graduate Medical Education Revenues
A core purpose for which the Medical Education
Council was created was to increase the monies for GME. Through
efforts by the Council staff, Utah's Medicare cap on resident numbers
and the resulting Medicare and Medicaid GME payments to Utah's teaching
hospitals were increased substantially, both retroactively and into
the future. By these very early achievements, the Council's professional
staff was able to demonstrate its usefulness to the teaching hospitals.
A. Council financial officer discovers $2 million
annually in earned but unclaimed Medicare GME payments
David Squire, the Council's financial officer,
came to the Council with the question of whether Utah teaching institutions
had been collecting all the Medicare GME funds to which they were
entitled. From his work in the finance department of the University
of Utah academic health center, Squire knew the university was training
about twice as many residents as it was reporting on its Medicare
cost reports. Squire began to examine the 1996 cost reports of all
Utah teaching hospitals. GME claims on the 1996 cost reports were
of special interest because it was these reports which CMS used
to determine the maximum number of residents and interns for which
Medicare would henceforward pay training costs, that is, to determine
each teaching institution's cap on the number of residents to be
supported with Medicare GME payments. For all of the approximately
625 residents training in Utah in 1996, Squire compared records
of their 1996 rotation schedules with the training time claimed
for them on 1996 cost reports. It was found that a substantial number
of Medicare graduate medical education FTEs had been omitted from
Utah FY1996 cost reports. Subsequently, the Medicare fiscal intermediary
acknowledged Squire's findings to be the more accurate FTE number
and accepted it as the official one for Utah's aggregate pool of
Medicare GME FTE positions. The Medicare DME FTE cap was increased
by 28 resident positions, a 9 percent increase; the Medicare IME
FTE cap was increased by 51 resident positions, a 13 percent increase.
The teaching institutions, using the corrected GME FTE information
provided to them by the Medical Education Council, revised all their
non-final cost reports. These institutions were able to recoup nearly
$2 million additional in Medicare GME monies for 1996 and similar
amounts for the 1997, 1998 and 1999 fiscal years. The resulting
increases in Utah's allowed number of Medicare DME and IME slots
have meant that Medicare GME payments to Utah have been higher every
year since then and will continue at that rate.
The GME undercount on teaching hospital cost
reports stems from the fact that there is no coordination of the
GME FTEs reported to Medicare by the multiple teaching institutions
through which interns and residents rotate in a year. The principal
reporting problem occurs when residents move from one rotation location
to another. Residents' weekends and vacation time between rotations
were often not counted on the cost reports, in accord with Medicare
GME cost-reporting regulations. In order to get correct counts,
Squire developed a retrospective database of all residents' medical
education time for FY 1996, and later extended the retrospective
count through FY 1999 cost reports. These data were used by the
teaching hospitals to revise their non-final cost reports for these
four years. The Utah Resident Review Information data base is now
maintained by Council staff as part of their regular work. This
data base is key to the completeness and accuracy of the GME elements
in Utah teaching institutions' Medicare cost reports. It houses
information on the rotation blocks for all residents training in
Utah, accounting for their location for all the days of the year.
B. Council facilitates annual multi million
dollar increase in Medicaid GME monies
Another early undertaking of the Council's finance
officer was to initiate a collaboration of the Council with the
Utah Medicaid office in an analysis of Federal Medicaid regulations.
The goal of this collaboration was to identify whether additional
Medicaid support for graduate medical education could be put in
place in Utah. As the Federal rules regarding Medicaid funding for
GME are complex, the Council finance officer and the State Medicaid
staff invested more than a year in mastering these rules and then
exploring options for increasing Medicaid support for GME. The culmination
of this collaboration was a three-step plan for increasing the Federal
Medicaid match for Utah's graduate medical education. The first
step was to amend the Utah Medicaid plan on file with CMS to allow
more GME to be paid by the Federal government, depending upon the
availability of a State match. The second step was to identify the
appropriate amount to be devoted to GME out of fee-for-service Medicaid
payments and develop the formula for determining the appropriate
amount of a GME carve out' from the State's payments to Medicaid
managed care organizations, with both these amounts to be earmarked
for the State's Medicaid GME pool. Finally the State of Utah increased
its Medicaid match. As a result of these efforts, Utah received
additional Federal Medicaid revenues of $11 million in 2002, $14
million in 2003 and an estimated $19 million in 2004. These new
Medicaid GME monies have been paid out by the State's Medicaid agency
to the teaching hospitals.
In this section of the report, we have described
how the efforts of Council staff have increased Utah's Medicare
GME payments by about $2 million annually and Federal Medicaid GME
payments by about $19 million in the most recent year. Clearly this
amount of new GME money coming in annually to Utah is sufficient
for a substantial expansion of graduate medical education training
in the State. The ways in which these new Federal GME monies are
being spent is addressed later in this report.
Chapter
5. Utah Gets Medicare Graduate Medical Education Demonstration
The Medicare demonstration described in this
chapter is just one facet of the Utah graduate medical education
experiment. In early 2000, Utah and CMS signed a five-year cooperative
agreement which provided funding to revise the application and prepare
to implement the demonstration, and authorized Utah to request the
Medicare waivers necessary for the demonstration. The Council resubmitted
its demonstration application in September 2000 (UMEC, 2000). In
Spring 2002, the Office of Management and Budget approved the Medicare
waivers required for the demonstration (Appendix I). In Summer 2002
the CMS and the Council agreed upon the special terms and conditions
for the demonstration (Appendix IV). In Summer 2003, seven years
after Utah's initial conversations with CMS and submission of its
original demonstration proposal, the Council received the first
payment of all Utah-bound Medicare DME funds.
A. Demonstration Design
The purpose of Utah's demonstration was to test
the feasibility of linking graduate medical education funding policies
to the State's physician workforce needs. The demonstration design
proposed to change a number of elements of Medicare's GME funding
arrangements. The Medical Education Council was to receive all Utah
Medicare DME and IME monies. Agreements between the Council and
the hospitals would specify the methodologies by which the Council
would pay hospitals and other providers for the direct and indirect
costs of their training programs. The proportion of Medicare IME
payments which were over and above the teaching hospitals' actual
IME costs were to be a revenue source for expanding residency training
in specialties in critical shortage. They would also fund special
Council initiatives such as establishing a rural-based primary care
residency program and paying the extra expenses of required rural
rotations.
DME to be paid directly to residency
programs. The Medicare DME funds were to be paid by the Council
directly to individual residency programs, rather than to the teaching
hospitals. This change would give the residency programs much greater
certainty and control over their finances, and increased independence
from teaching hospitals as the once exclusive domain of physician
training. It would allow GME payment for training in locations other
than teaching hospitals' inpatient units and outpatient clinics,
such as freestanding ambulatory care clinics and in shortage settings
such as rural hospitals and clinics and inner-city clinics. The
GME funding would follow the residents and support their training
wherever it needed to occur. This provision would enable the Council
to encourage and finance physician training in diverse settings,
for the best mix of educational experiences. Over the course of
the demonstration, the Council would undertake a study of the actual
direct costs of residency training. The Council would then change
DME payments to residency programs from a formula based on historic
costs adjusted for inflation to actual cost reimbursement.
Aggregate Statewide pool of resident
slots. The Council, by agreement with all the sponsoring institutions,
already controlled a statewide pool of all Utah Medicare GME FTE
positions. In the demonstration, it would be authorized to reallocate
slots between programs and institutions. This would enable the Council
to adjust training locations to ensure the quality of training experiences.
For example, if a teaching institution were to misuse residents
the Council could remove or reduce the number of residents rotating
to this institution. The Council also would be able to change the
allocation of funds for residency positions between primary and
specialty care on a statewide basis, rather than hospital by hospital,
with the allocation tied to State workforce plans. Additionally,
the Council would be authorized to determine the total number of
GME positions and specialty mix to be supported by public funds.
Additional Payment Design. The State
Medicaid agency agreed to seek a Federal waiver to permit payment
of the Medicaid GME funds to the Medical Education Council. In the
absence of a waiver, the State Medicaid agency is required by Federal
law to pay the GME monies to teaching hospitals. The demonstration
was to be budget neutral for Medicare. GME payments to the State
were not to exceed what they would have been without the demonstration.
Additionally, the Council would the develop a strategy for bringing
new dollars into the GME funding pool, over and above Medicare and
Medicaid funds. For example, it might seek an appropriation from
the legislature. It would also seek GME funding from private sector
health insurance companies.
The Demonstration Application. The
demonstration application committed the Council to: providing funding
for training in outpatient settings and with rural and underserved
populations; expanding the amount of interdisciplinary training,
when funds became available.
B. Implementation of the demonstration
This demonstration is a complex undertaking in
which some elements were scheduled for immediate implementation
and others were to be phased in over the 5-year period of the demonstration.
This section describes accomplishments in one year of preparation
time and one year of responsibility for Medicare GME monies.
The Council accomplished a good deal of essential,
if unexciting, groundwork in the development of decision-making
criteria and processes including the development of its criteria
for allocating resident positions, the principles and objectives
to be used for funds allocation, and a process for receiving and
transferring DME funds. The DME funds are now paid by the Council
directly to the GME directors at the institutions sponsoring the
residency programs rather than, as before, to the teaching hospitals.
Additionally, the Council has developed an appeal process that any
party can use if it disagrees with a Council decision and the disagreement
is not settled through negotiation. The appeal goes to an independent
reviewer for binding arbitration.
At the start of the demonstration, Utah already
had a number of residency programs about 60 programs and
625 interns, residents and fellows. The physician implementation
advisory committee found that none of these residency programs were
producing physicians in specialties that were in surplus supply
in the State. This finding made the Council's work easier as it
would not have to decrease funding or slots to any existing residency
program. Hence, the Council's starting point was its decision to
maintain the Medicare DME funding to all of these programs, which
would consume essentially all of its first-year revenues.
Modifying existing residency programs.
The Council has come up with an innovative strategy for modifying
the existing residency programs in directions desired by the Council.
The Council may withhold 10 percent from its annual payment to a
residency program. Release of the amount withheld is contingent
on evidence of a program's progress toward the Council's statewide
workforce objectives for training programs. Annually, each residency
program is to submit a plan to the Council detailing specific steps
it will take toward achieving the Council's objectives. In FY 2004
and FY 2005, the Council's objectives for residency programs are:
(1) operate the program at its current number of residents, (2)
increase the percentage of program graduates who stay in Utah to
practice, (3) increase the amount of training done in rural places,
and for specialties in very short supply, (4) start work on expanding
the program by applying to the Council for additional funding
and to the specialty's residency review committee for permission
to admit additional residents.
FY 2004 was the trial year for this strategy,
both to give the residency programs and their sponsoring organizations
an opportunity to learn the process and give all involved some time
to think together on means to achieve some of the objectives. It
has proved especially difficult to come up with concrete steps toward
the objective of increasing the percentage of graduating residents
who stay in Utah to practice. The Council hired a new staff member
who is to work with the residency programs on ways to increase retention.
At the suggestion of the residency programs, the new staff member
has created a system to identify all current and some expected physician
openings in Utah and make this information easily available to the
programs and the residents. All current openings are now posted
on the Council's new web page, www.utahmec.org.
In addition, the retention specialist is contacting all University
of Utah Medical School graduates now enrolled in out-of-State residency
programs. The graduates are asked if they are interested in returning
to Utah to practice when they complete their residencies, and offered
assistance if interested in practicing in Utah. Also, job information
and assistance with help in linking graduates to temporary practice
positions in Utah during vacations is available.
Stabilizing, expanding and adding residency
programs. The physician implementation advisory committee (PIAC)
developed criteria and a methodology for prioritizing its recommendations
for funding specific specialty residency programs. The methodology
is somewhat complicated, but both the PIAC and the Council members
consider it rational for deciding on the State's greatest needs
for physicians by specialty. The first group of residency programs
considered for expansion were those specialties which are needed
in every hospital, including rural community hospitals. The Council
is particularly attuned to the staffing needs of rural hospitals.
Starting early in calendar 2003, the PIAC reviewed and ranked a
total of 13 residency programs in these specialties. The one program
which was at risk of closing, the child and adolescent psychiatry
residency, received the top rank. Eleven others were ranked for
expansion, though only eight of these requested funding for additional
positions. None of the four family practice residency programs requested
expansion funding because of the difficulty of filling slots, a
nationwide problem for family practice residencies. One new residency
program was proposed in emergency medicine -- but it did
not rank within the funding range.
The Council unanimously accepted the PIAC recommendations
and approved the addition of these new resident positions to those
for which the Council was already committed to provide funding.
This decision was a sentinel accomplishment in view of the fact
that some specialist physicians on PIAC and the Council voted against
the interests of their own specialties. The Council now had a ranked
list of new resident positions to be funded, but no funds.
Currently, in the second year of reviews, the
residency program directors are interacting with the PIAC in a more
helpful fashion. They have come to meetings with the PIAC more prepared
to explore options and to present information to help the committee
arrive at recommendations for the next two decades, and with more
honest assessments of the limitations of their faculty and clinic
settings for providing quality educational experiences.
If an institutional sponsor of a residency program
has some internal objective and wants to fund GME program expansion
beyond what the Council determines is required to meet statewide
requirements, that sponsor can proceed, but there is no promise
of future funding through the Council for those slots. This arrangement
has the advantage that the Council looks at statewide needs, and
the teaching institutions are free to accomplish their objectives
if they have the funds. In practice it has produced new partnerships.
One example is the collaboration of the University of Utah and Intermountain
Healthcare to jointly sponsor and fund a new residency program in
emergency medicine. Another example is the collaboration of a rural
community hospital, a rural educator and a family practice residency
program to seek grant funding for Utah's first rural residency training
track program in family practice.
Increasing funding for graduate medical
education. Achievements in the area most important to the Council's
success expanding the GME funds controlled by the Council
have proved the most difficult. The Council has experienced
serious setbacks in this area as those who historically have controlled
these monies have proved reluctant to cede control to the Council.
However, the Council has achieved one notable success which may
lead to further ones.
The demonstration application specified that
all Federal Medicare and Medicaid GME payments to Utah would be
channeled through the Medical Education Council, including both
DME and IME for Medicare. The Council had projected that these funds
would be sufficient to support all existing residency training programs
at current levels, expand some programs and start additional new
programs, thereby meeting a larger proportion of the State's physician
workforce needs. However, only the smallest of these three Federal
payments is being paid to the Council Medicare DME, about
$7.5 million in 2004. The teaching hospitals have not agreed to
have the Medicare IME payments go to the Council. One reason may
be their desire to retain control of that half of their Medicare
IME payments which is over and above their actual IME costs (MedPAC,
2003, 57). Total Medicare IME payments to Utah in 2004 were about
$21 million and are projected to be about $21.8 million in FY 2005.
Nor has the State's health department requested
a waiver from CMS to enable the State to carve out GME funds from
its Medicaid payments to Utah hospitals in order to channel these
funds to the Council. In the absence of a waiver, Federal regulations
require the State to pay the Medicaid GME monies directly to the
teaching hospitals. The State and the Council have limited means
of holding the hospitals accountable on how the Medicaid GME funds
are actually used. The waiver from CMS would ensure that these monies
were used for GME, but the State Medicaid agency has not put a high
priority on seeking a waiver. While some hospitals have dropped
these funds to their bottom line, others have used the funds to
accomplish some of the Council's GME workforce objectives. For example,
the University of Utah used its Medicaid GME funds to fully fund
all residents' salaries and put the remaining money into creating
a total of 41 new resident positions in programs that are priorities
for the Council. St. Marks Hospital has used the Medicaid GME monies
to stabilize the financially fragile family practice residency program.
Some Council members had expected the teaching
hospitals to voluntarily channel the increased Medicare and Medicaid
GME monies to the Council. However, this has not yet occurred and
the hospitals are under no legal obligation to make the transfer.
Some hospital executives regard the additional Medicare and Medicaid
GME revenues as earned compensation for the Federal government's
decreased Medicare IME payments and payback to the hospitals for
their subsidization of Medicaid patient care over the years. The
Council, on the other hand, has said GME is for training physicians
and if that is not occurring then no GME payments should be made.
The Council is working on how to have more of
the Federal GME monies come directly from CMS to the Council. Recently
the Council has begun to examine the uses to which teaching hospitals
put their Medicare and Medicaid GME payments. The Council has asked
all the organizations sponsoring residency programs in Utah and
all the hospitals receiving Medicare and Medicaid GME funds directly
to report to the Council how the funds were used broken out
by Medicaid GME and Medicare IME. This information will be requested
annually starting in FY 2004. If the council is successful in obtaining
the data it will be the first time anywhere in the nation that this
information is known for a whole region. Such information could
strengthen whatever case the Council subsequently makes in asking
the teaching hospitals for additional GME funds. Interestingly,
the Medicare Payment Advisory Commission (MedPAC) is weighing the
recommendation of a similar policy that teaching hospitals
be required to demonstrate that any Medicare IME funds above their
actual costs are being used for graduate medical education (MedPAC,
2003, 59). If such a MedPAC recommendation were to become law, it
would bring to teaching hospitals nationwide the same transparency
in the use of GME monies which the Utah Medical Education Council
is now seeking.
Another approach taken by the Council to obtain
more GME funding is to go directly to the teaching hospitals. In
June 2004, the Council and all the teaching hospitals reached a
five-year agreement which may be renewed.
- The two large teaching systems - the University
of Utah and Intermountain Health Care -- have committed to fund
the 18 new resident positions approved by the Council. The funding
is initially for five years and likely will continue. In addition,
these hospitals have committed clinical space and physician faculty
time for the expanded training programs - a generous in-kind commitment
which will cost more than the financial commitment in the agreement.
The hospitals will channel these new GME monies through the Council,
which will increase the Council's GME funding pool. Lack of the
Medicaid waiver led to the development of this pooling concept,
wherein each hospital will contribute a portion of its Medicaid
GME revenues to the Medical Education Council's GME pool. This
agreement is a model for further expansions of the Council's GME
funding pool.
- The University of Utah will continue to supply
intergovernmental transfer funds for Utah's Medicaid GME match
- approximately $5 million annually.
- Intermountain Health Care will supply most
of the Council's administrative budget. The two small teaching
hospitals, Salt Lake Regional Medical Center and St. Mark's Hospital,
will also contribute to it. This commitment is a large step forward
in the stability of the Council. Up to this time, funding for
the Council staff and administrative expenses had been uncertain.
Now it is guaranteed for the next five years.
The Council is also moving forward on its demonstration
commitment to develop a broadly based funding pool. In 2003, it
created a GME funding subcommittee and charged it with identifying
funding mechanisms through which additional stakeholders would contribute
their fair share to the costs of training physicians in Utah to
meet the needs of the population. These additional stakeholders
might include the private health insurers and the State government.
The creation of this subcommittee, whose members have contacts in
the legislature and professional associations, is a rational beginning
on this commitment. If stakeholders were to agree, a broadly based
funding pool could operate without CMS approval or waivers. Some
Council members consider such a voluntary agreement among all major
stakeholders to participate in a GME funding pool to be a realistic
possibility. If it were to come about, no Medicare demonstration
or Medicare or Medicaid waivers would be needed for Utah's GME planning
and funding initiative to continue indefinitely. Other Council members
are less sanguine that Utah's private health insurance industry
will make voluntary contributions to GME funding. The weight of
National commissions which have recommended all-payer GME funding
is on their side. The all-payer proposals of COGME, the Pew Health
Professions Commission and the Commonwealth Fund Taskforce on Academic
Health Centers have all included mandated contributions by private
health insurers.(COGME, 2000a, 49-51).
Building health workforce data bases
and conducting workforce analyses. Although the constrained
funding for Council staff limits its capacity in this part of its
responsibilities, its ongoing accomplishments in workforce data
collection and analysis are noteworthy. In 2004, it will publish
survey-based reports on Utah's 2003 workforces of physicians, advanced
practice nurses, physician assistants and podiatrists, as well as
reports based on information gleaned from data bases in three State
agencies for medical laboratorians and radiology technologists.
Increasing residents' rural training
experiences. The Council and Council staff are committed to
increasing the amount of resident training which takes place in
rural places. Although family practice physicians are the predominant
specialty in small towns and are in short supply in Utah's rural
areas, it has proved difficult to increase the number being trained
in Utah and also to increase the amount of rural training of family
practice residents. None of the four existing family practice residency
programs in Utah currently have plans to expand. This is principally
because of the short supply of applicants and the difficulty in
recruiting well-qualified students. In the 2003 match, only 1,200
U.S. medical school seniors matched into the 3,000 family medicine
slots. This is a National problem which cannot be solved in any
one State.
As an alternative, the Council considered starting
a 3-year family practice residency program in a rural town. The
Council and the Utah Area Health Education jointly evaluated seven
rural Utah communities for suitability as sites for 3-year rural
family practice residency programs. Only one community was judged
suitable (Catinella, 2003), but it does not have funds or local
physician educators interested in this considerable undertaking.
The Council is now focusing its efforts to increase
rural training of family physicians on use of the rural training
track (RTT) residency program model. Planning of Utah's first rural
training track program is well-advanced and seems likely to come
to fruition. In an RTT, the resident's first year is spent in an
urban-based residency program, completing such specialized rotations
as pediatrics and obstetrics and gynecology. The second and third
years of the residency are done in a rural community, where the
resident lives and works. RTTs have the best track record (76 percent)
of any variant of family practice residency programs in graduating
physicians who locate in rural areas. An RTT needs to recruit only
one new resident a year, a feature of importance in light of the
difficulty of recruiting family practice residents. A rural community
hospital and a family practice educator in Sanpete County and a
family practice residency program in Provo -- about 60 miles south
of Salt Lake City and 60 miles north of Sanpete County -- are collaborating
to establish Utah's first rural training track (RTT) residency program.
The Council is assisting with the planning. If this RTT is successfully
started, it may be the first of several. Other rural communities
which have learned of the RTT plans have already asked whether they,
too, might be RTT sites.
The University of Utah's graduate dental residency
program has added a one-month mandatory rural rotation. The Medical
Education Council had encouraged the residency to add this rural
rotation experience. The rural experience for these dental residents
is especially important in light of the shortage of dentists in
rural areas. This residency's experience in adding rural rotations
also sheds light on some of the reasons this can be difficult for
other residency programs to emulate. This dental rural rotation
program is first described and then analyzed to understand how the
program directors solved problems which have been barriers to its
replication by other residency programs in the State.
Every dental resident now spends one month at
the remote rural clinic in Montezuma Creek (a PHS 330 Community
Health Center) serving American Indians. The residency program pays
for residents' housing and transportation costs. The rural clinic
is 300 miles from Salt Lake City a full day's drive in one
direction. The residents are supervised by the clinic's staff dentist
who has been given a faculty appointment in the residency program.
This dentist is now fulfilling his National Health Service Corps
obligation and plans to continue at the clinic after completing
his Corps obligation. The director of the University of Utah's dental
program was already acquainted with the CHC's staff dentist whose
educational progress he had tracked from pre-dental training through
dental school.
There is a good partnership between the residency
program in Salt Lake City and the rural clinic. The clinic's staff
dentist and the resident at the remote site can link electronically
to the Salt Lake City program via a two-way audio-visual connection.
Through this connection, they are able to participate in the dental
residency program's regular Wednesday afternoon didactic session
in Salt Lake City. Two times a year, the dental residency program
pays the transportation costs for the faculty member to come up
to Salt Lake City to attend the Wednesday seminar in person and
meet with the residency program director. The program director has
made two site visits to the Montezuma Creek Clinic, each of which
requires the program director to be away from the residency program
in Salt Lake City for three days.
The dental residency program has sufficient funds
for the expenses of its rural rotation. Some funds have come from
the rural clinic, which pays a stipulated amount to the residency
program. Some funds were available as the result of the residency
program's expansion which increased its Medicare and Medicaid GME
revenues.
Several factors are requisite for the addition
of a rural rotation to a residency program, and all were present
for the University of Utah dental residency program.
- A rural practice site must be interested in
having resident(s), have one or more clinicians interested in
supervising the resident(s), and be willing to absorb the cost
of freeing up teaching time for the supervising clinician(s).
- The residency program's 'coverage' obligations
permit its residents to be away from the home base for the period
of the rural rotation.
- The residency program's faculty needs to be
confident of the professional skills of the educator (dentist
or physician) at the rural location.
- Funding is available to pay the transportation
and housing costs for the resident.
- It is highly desirable for the resident(s)
at the rural site to be able to electronically 'attend' the residency
program's weekly didactic session.
- The residency program director must make regular
site visits to the rural site, to ensure the quality and content
of the supervision of the resident.
- It is desirable that the faculty member at
the rural site be integrated with the faculty at the residency
program's home base, which is best accomplished by spending some
time with them. Therefore, transportation expenses must be funded.
Seven residency programs located in Salt Lake
City have told the Council they are interested in adding rural rotations.
Most have been stopped by the lack of funds for the additional costs
of rural rotations. The Council is trying to identify a funding
source for these expenses. As one option, the Council has approached
the State legislature for an appropriation to fund a rural
incentive pool.'
The general surgery residency program is very
interested in adding rural rotations, and has already identified
general surgeons in four rural communities around the State who
are willing to host two-month rotations. To date, the program has
not been able to start rural rotations because their residents'
time is already fully committed for coverage of various departments
in their home hospitals, such as the trauma department. These commitments
mean that residents cannot be absent from Salt Lake City for one
or two-month rural experiences.
A new emergency medicine residency program which
will have required rural rotations of at least two months is being
started. Funding for it has already committed by the University
Hospital and Intermountain Health Care's LDS Hospital. As Intermountain
Health Care is also the owner of a number of rural hospitals, there
is a good chance the rural rotations will become a reality.
Need for new strategies for meeting
Utah's health workforce needs. The Council's initial strategy
for meeting the State's future physician workforce needs was to
expand its existing residency programs. It is now apparent that
these residencies cannot be expanded enough to meet the State's
needs for subspecialists. One new strategy being investigated is
the provision of augmented training by subspecialists to existing
physicians to enhance the number of procedures they can perform.
The primary care specialties of family practice, pediatrics, obstetrics
and general surgery are being considered for augmented training.
This strategy will require funding for fellowships for the practicing
physicians who would receive this training. Another strategy being
considered is to increase the number of nurse practitioners and
physician assistants providing direct patient care. This search
by the Council for new strategies for accomplishing its goals illustrates
its maturation in health workforce planning.
These are the Council's activities and achievements
to date toward the objective of increasing the amount of physician
training which takes place in rural areas. It seems a good beginning,
but only time will tell how much is achieved.
Chapter
6. Lessons for Other States
Utah's GME planning initiative may serve as a
model for other States. It seems especially appropriate for States
that have only one or two medical schools and a small number of
teaching hospitals who currently recruit many of their physicians
in the National market. Several States with these characteristics
have studied the Utah model, and two of them have started to emulate
it. The Hawaii and Nevada State governments have enacted legislation
creating a State Medical Education Council. Their legislation is
modeled on Utah's, including a grant of authority to the State Medical
Education Council to apply to CMS to receive and disburse Medicare
and Medicaid GME monies. Nevada's Medical Education Council held
its first meeting in late 2004 and, as the first step in its planning
activities, has begun to gather health workforce data.
States not interested in statewide GME planning
may want to adopt one or more of the elements of the Utah model.
A State might choose to pursue an increase in Medicare and Medicaid
GME payments to the State by the methods used by Utah. As a first
step, a State agency or a nonprofit organization with no financial
interest in the teaching hospitals could investigate whether the
teaching hospitals are claiming all of the Medicare GME monies to
which they are entitled. Utah's investigation into this matter revealed
that about 10 percent of the GME monies earned in this State were
not being claimed. Utah has developed a detailed template for this
investigation and is willing to share it. Also, a State could look
into options for increasing Federal Medicaid GME payments. Utah's
experience could be helpful in understanding how this might be done.
Most States could benefit from having good information
on their health profession's workforce, including its current adequacy
and projected need. This information will be useful to the State
legislature and State administrative agencies, as well as to its
universities and colleges which train health professionals. Utah
is just one of a number of States which maintain this information.
As part of its planning activities, the Utah Medical Education Council
has built databases on a wide range of health professions and developed
projections of future need.
States with a persistent shortage of health professionals
in rural areas might create a Council to develop and implement strategies
for alleviating these shortages, giving it control over some funds
and input into the State appropriations for public universities
and colleges. Utah's Medical Education Council has some responsibility
for addressing rural shortages in the health workforce, and is in
the early days of tackling this assignment. Another State, Wisconsin,
has just started a Council for the purpose of addressing its shortage
of rural physicians. In the fall of 2004, the Wisconsin Rural Medical
Education Advisory Committee came into being, charged with increasing
the number of its medical school's graduates who practice in rural
Wisconsin communities. The Council's "primary responsibility
will be to develop a proposal for a school within a school'
program, the Wisconsin Academy for Rural Medicine, aimed at rural
physician training at the University of Wisconsin Medical School."
5
Chapter
7. Conclusions
In less than a decade, Utah has created a structure
and process for linking the funding of graduate medical education
to rational planning to meet Utah's future physician workforce needs.
The Medical Education Council was created by the legislature in
1997 and has grown steadily stronger in the subsequent years. The
key GME stakeholders in Utah are all active participants on the
Council. The Council successfully applied for a groundbreaking Medicare
demonstration of State GME planning, to link the funding to statewide
physician workforce needs. It has demonstrated its ability to manage
Medicare GME monies. It has successfully solicited additional, voluntary
contributions from the teaching hospitals to its GME pool. The Council
staff has found ways to substantially increase Federal payments
to Utah for graduate medical education. The teaching hospitals'
participation in Council activities has led them to collaborate
on GME initiatives beyond the Council's scope. The Council and the
State government now have good data on the current workforce situation
of many health professions as well as projections of future supply
and shortages. Up to this point in time, each year has seen additional
accomplishments for the Council. Further accomplishments seem likely.
However, the Council has fallen short of the
centerpiece of its Medicare demonstration to control all Medicare
and Medicaid GME payments, with flexibility to use them to improve
the current and future physician supply in needed specialties. The
lack of funds has limited the Council's ability to undertake a number
of initiatives which could improve the State's supply of health
professionals. Nevertheless, Council members and staff are pleased
with the progress they have made in gaining control of some additional
monies beyond Medicare DME funds and believe they will be able to
make further progress.
The Council has so far failed to get the Board
of Regents to pay close attention to the workforce recommendations,
especially to assure that the allied health field will grow to support
the expanded physician training. The Council has shown that laboratory
workers and radiology technicians are in critically short supply
and must be increased or the support staff to do the diagnostic
testing for physicians won't be adequate to get the work done in
a timely manner. The whole workforce needs to be expanded concurrently.
Otherwise, the strength of the health care system will be limited
to that of the profession in the shortest supply. Challenges remain
on other fronts as well as there remains understandable tensions
between major stakeholders who are business competitors.
This said, the Council has some notable achievements.
They are remarkable in today's health policy environment in which
health planning is in disfavor and competition is widely promoted
as the means for solving problems in the health care system. The
successes of Utah's GME planning initiative are more than sufficient
for it to be considered by other States as a model for health workforce
planning, including graduate medical education planning. If the
Council should succeed in gaining control over additional GME monies,
it is ready and able to accomplish a great deal more.
References
Biviano, M. (2001). "National Center for
Health Workforce Information and Analysis: Research Agenda,"
slide presentation for the NCSL Forum for State Health Policy Leadership,
Lake Tahoe, California, April 26-27, 2001, 23. As cited in Karen
Matherlee, Federal and State Perspectives on GME Reform,
National Health Policy Forum Issue Brief, 2001. Washington DC: National
Health Policy Forum.
Bowman, RC, Penrod, JD. (1998). Family practice
residency programs and the graduation of rural family physicians.
Family Medicine, 30(4), 288-92.
Bureau of Health Professions, HRSA, DHHS. (2000)
Graduate Medical Education and Public Policy: A Primer. Rockville,
MD
Catinella, AP, Magill, MK, Thiese, SM, et al.
(2003). The Utah rural residency study: a blueprint for evaluating
potential sites for development of a 4-4-4 family practice residency
program in a rural community. J Rural Health 19:2:190-198.
Centers for Medicare and Medicaid Services. (2002)
Health Care Industry Market Update: Acute Care Hospitals,
Volume II, Appendix: Medicare Payment Systems, November 12, 2002.
www.cms.hhs.gov/reports/hcimu/hcimu_04292002_append.pdf
Commonwealth Fund Task Force on Academic Health
Centers. (1997). "Leveling the Playing Field: Financing the
Mission of Academic Health Centers." The Commonwealth Fund
Council on Graduate Medical Education. (1997)
Ninth Report: Graduate Medical Education Consortia: Changing
the Governance of Graduate Medical Education to Achieve Physician
Workforce Objectives. Washington DC: US DHHS, HRSA.
__________. (1999). Fourteenth Report: COGME
Physician Workforce Policies: Recent Development and Remaining Challenges
in Meeting National Goals. Washington DC: US DHHS, HRSA.
__________. (2000a) Fifteenth Report. Financing
Graduate Medical Education in a Changing Health Care Environment.
Washington DC: US DHHS, HRSA.
__________. (2000b) The Effects of the Balanced
Budget Act of 1997 on Graduate Medical Education: A COGME Review.
Crump, WJ, Barnett, B & Fricker, S. (2004)
A sense of place: rural training at a regional medical school campus.
J Rural Health 20:1: 80-84 (Winter).
Elison, Gar. (2003) Presentation, Graduate Medical
Education Seminar, October 29-31, 2003. Salt Lake City, Utah.
Larson, EH, et al. (2003) State of the Health
Workforce in Rural America: profiles and comparisons. Monograph.
WWAMI Rural Health Research Center, Seattle WA.
Geyman, JP, et al. (1999) Physician Education
and Rural Location: A Critical Review. WWAMI Rural Health Research
Center, University of Washington School of Medicine. Working Paper
#49.
Henderson, TM. (2000) Medicaid's role in financing
graduate medical education. Health Affairs 19:1: 221-229.
Henderson, TM. (1998). Medicaid Support for
Graduate Medical Education: Should There Be a National Policy?
A Policy Issue Brief, Center for Health Professions, University
of California, San Francisco.
Koenig, L, Dobson, A, et al. (2003). Estimating
the Mission-Related Costs of Teaching Hospitals. Health Affairs
22:6:112-125.
MedPAC. (1999). Report to the Congress: Rethinking
Medicare's Payment Policies for Graduate Medical Education and Teaching
Hospitals. Washington, DC.
________ (2003) Report to the Congress: Medicare
Payment Policy. Washington, DC.
Osborn, Lucy M. (1966). Proposal to the Health
Care Financing Administration for a Utah Graduate Medical Education
Consortium. University of Utah Health Science Center.
Pew Health Professions Commission. (1998). Report
of the Pew Federal Policy Taskforce. Beyond the Balanced Budget
Act of 1997: Strengthening Federal GME Policy. San Francisco.
Saver, BC, Bowman, R, Crittenden, RA, Maudlin,
RK and Hart, LG. (1998) Barriers to Residency Training of Physicians
in Rural Areas. WWAMI Rural Health Research Center, University
of Washington School of Medicine. Working Paper #46.
Shirk, C. (2003) Shaping public programs through
Medicare, Medicaid, and SCHIP waivers: the fundamentals. National
Health Policy Forum. Background paper. Washington, D.C.
Slifkin, RT, Popkin, B & Dalton, K. (1998).
The impact of Medicare graduate medical education funding on
rural hospitals. North Carolina Rural Health Research and Policy
Analysis Center. Working Paper # 56.
Slifkin, RT and Dalton K. (1999). Medicare Graduate
Medical Education Payments to Rural Hospitals. Findings Brief. North
Carolina Rural Health Research and Policy Analysis Program, University
of North Carolina at Chapel Hill. Chapel Hill, NC.
Squire, David F. (2003). UMEC Chief Financial
Officer. Correspondence, 12/16/2003.
Ricketts, TC, Hart, L.G. and Pirani, M. (2000).
How many rural doctors do we have? J Rural Health. 16:3:198-207.
Rosenthal, TC (2000). Outcomes of rural training
tracks: a review. J Rural Health 16:3:213-216.
U.S. Congress, House of Representatives, Committee
on Ways and Means. (1999). Medicare and Health Care Chartbook.
Government Printing Office. Washington DC.
Utah Medical Education Council. (2000a) Utah Waiver
application to HCFA for a Demonstration Project to Rationalize Graduate
Medical Education Funding. Salt Lake City, Utah. September 28, 2000.
___________________. (2000b). Utah's Clinical
Healthcare Workforce - Achieving Balance Through 2020. Salt
Lake City, Utah. December 2000.
Appendix
I.
Utah Statute Creating the Medical
Education Council
1997
HB 141 (Enrolled)
MEDICAL EDUCATION PROGRAM
1997 GENERAL SESSION
State OF UTAH
Sponsor: J. Brent Haymond
AN ACT RELATING TO STATE AFFAIRS IN GENERAL;
CREATING THE MEDICAL EDUCATION PROGRAM AND COUNCIL; DEFINING TERMS;
EXEMPTING EMPLOYEES OF THE COUNCIL FROM THE STATE PAY PLAN; ENUMERATING
THE DUTIES AND POWERS OF THE COUNCIL IN SECURING FEDERAL FUNDING
FOR GRADUATE MEDICAL EDUCATION THROUGH A DEMONSTRATION PROJECT;
DETERMINING THE TRAINING NEEDS OF HEALTH CARE PROFESSIONALS; AND
DISTRIBUTING FUND MONIES.
This act affects sections of Utah Code Annotated
1953 as follows:
AMENDS:
67-19-12, as last amended by Chapters 192 and 283, Laws of Utah
1996
ENACTS:
63C-7-101, Utah Code Annotated 1953
63C-7-102, Utah Code Annotated 1953
63C-7-103, Utah Code Annotated 1953
63C-7-104, Utah Code Annotated 1953
63C-7-105, Utah Code Annotated 1953
Be it enacted by the Legislature of the State
of Utah:
Section 1. Section 63C-7-101 is enacted to read:
CHAPTER 7. MEDICAL EDUCATION PROGRAM
63C-7-101. Definitions.
As used in this chapter:
(1) "Accredited clinical training program"
means a clinical training program that is accredited by an entity
recognized within medical education circles as an accrediting body
for medical education, advanced practice nursing education, physician
assistance education, or doctor of pharmacy education.
(2) "Accredited clinical education program" means a clinical
education program for a health care profession that is accredited
by the Accreditation Council on Graduate Medical Education.
(3) "Council" means the Medical Education Council created
under Section 63C-7-103.
(4) "Health Care Financing Administration" means the Health
Care Financing Administration within the United States Department
of Health and Human Services.
(5) "Health care professionals in training" means medical
students and residents, advance practice nursing students, physician
assistant students, and doctor of pharmacy students.
(6) "Program" means the Medical Education Program created
under Section 63C-7-102.
Section 2. Section 63C-7-102 is enacted to read:
63C-7-102. Medical Education Program.
(1) There is created a Medical Education Program
to be administered by the Medical Education Council in cooperation
with the Division of Finance.
(2) The program shall be funded from monies received for graduate
medical education from:
(a) the Federal Health Care Financing Administration or other Federal
agency;
(b) State appropriations; and
(c) donation or private contributions.
(3) All funding for this program shall be nonlapsing.
(4) Program monies may only be expended if:
(a) approved by the council; and
(b) used for graduate medical education in accordance with Subsection
63C-7-104 (7).
Section 3. Section 63C-7-103 is enacted to read:
63C-7-103. Medical Education Council.
(1) There is created the Medical Education Council
consisting of the following members appointed by the Governor:
(a) the dean of the school of medicine at the University of Utah;
(b) a person who represents graduate medical education at the University
of Utah;
(c) a person from each institution, other than the University of
Utah, that sponsors an accredited clinical education program;
(d) a person from the health care insurance industry; and
(e) three members of the general public who are not employed by
or affiliated with any institution that offers, sponsors, or finances
health care or medical education; however, the Governor may appoint
an additional member of the public under this Subsection (1)(e)
for each person the Governor appoints that increases the total number
of persons appointed under Subsection (1)(c) beyond two.
(2) Except as provided in Subsection (1)(a) and (b), no two council
members may be employed by or affiliated with the same:
(a) institution of higher education;
(b) State agency outside of higher education; or
(c) private entity.
(3) The dean of the school of medicine at the University of Utah:
(a) shall chair the council;
(b) may not be counted in determining the existence of a quorum;
and
(c) may only cast a vote on a matter before the council if the vote
of the other council members results in a tied vote.
(4) The council shall annually elect a vice chair from among the
members of the council.
(5) (a) Consistent with Subsection (6)(b), a majority of the council
members constitute a quorum.
(b) The action of a majority of a quorum is the action of the council.
(6) (a) Except as provided in Subsection (6)(b), members are appointed
to four-year terms of office.
(b) Notwithstanding Subsection (6)(a), the Governor shall, at the
time of the initial appointment, adjust the length of terms to ensure
that the terms of council members are staggered so that approximately
half of the council is appointed every two years.
(c) If a vacancy occurs in the membership for any reason, the replacement
shall be appointed by the Governor for the unexpired term in the
same manner as the original appointment was made.
(7) (a) Per diem and expenses incurred in the performance of official
duties may be paid at the rates established by the Division of Finance
under Section 63A-3-106 and Section 63A-3-107 to a council member:
(i) who is not a government employee; or
(ii) who is a government employee, but does not receive salary,
per diem, or expenses from the council member's employing unit for
service to the council.
(b) A council member may decline to receive per diem and expenses
for service to the
council.
Section 4. Section 63C-7-104 is enacted to read:
63C-7-104. Duties of council.
The council shall:
(1) submit an application in accordance with Federal
law for a demonstration project to the Health Care Financing Administration
before December 31, 1997, for the purpose of receiving and disbursing
Federal funds for direct and indirect graduate medical education
expenses;
(2) seek private and public contributions for the program;
(3) study and recommend options for financing graduate medical education
to the State
Board of Regents and the Legislature;
(4) advise the State Board of Regents and the Legislature on the
status and needs of health care professionals in training;
(5) determine the method for reimbursing institutions that sponsor
health care professionals in training;
(6) determine the number and type of positions for health care professionals
in training for which program monies may be used; and
(7) distribute program monies for graduate medical education in
a manner that:
(a) prepares postgraduate medical residents, as defined by the accreditation
council on graduate medical education, for inpatient, outpatient,
hospital, community, and geographically diverse settings;
(b) encourages the coordination of interdisciplinary clinical training
among health care professionals in training;
(c) promotes stable funding for the clinical training of health
care professionals in training; and
(d) only funds accredited clinical training programs.
Section 5. Section 63C-7-105 is enacted to read:
63C-7-105. Powers of council.
The council may:
(1) conduct surveys, with the assistance of the
Division of Occupational and Professional Licensing within the Department
of Commerce, to assess and meet changing market and education needs;
(2) appoint advisory committees of broad representation on interdisciplinary
clinical education, workforce mix planning and projections, funding
mechanisms, and other topics as is necessary;
(3) use Federal monies for necessary administrative expenses to
carry out its duties and powers as permitted by Federal law;
(4) distribute program monies in accordance with Subsection 63C-7-104
(7); and
(5) as is necessary to carry out its duties under Section 63C-7-104
:
(a) hire employees; and
(b) adopt rules in accordance with Title 63, Chapter 46a, Utah Administrative
Rulemaking Act.
Appendix
II
Utah's Clinical Healthcare Workforce:
Achieving Balance Through 2020
Prepared by Medical Education Council,
State of Utah
Salt Lake City, Utah > > < < December 2000
Executive Summary
Section I. Capacity of Current Clinical Workforce
1. Utah is on the verge of a crisis in the clinical
healthcare workforce. Unless something is done to avert this crisis,
Utah citizens will no longer be able to access the quality healthcare
that they deserve.
2. There is a chronic maldistribution of
primary care clinicians among urban and rural settings.
3. There are some statewide specialist shortages
developing. At present there is a statewide shortage of emergency
room physicians, adult and child psychiatrists in public settings,
pediatric and adult endocrinologists, nephrologists, neurologists,
rheumatologists, anesthesiologists, and gastroenterologists.
4. Healthcare providers are highly influenced
to practice in locations where advanced clinical training was received.
This has implications for both Utah in general and for rural locations.
5. National policy to reduce the number of medical
residency training slots throughout the nation will reduce the pool
of fully trained physicians from which Utah will compete. This is
expected to hamper the maintenance of Utah's physician workforce.
The demand for advanced practice nurses and physician assistants
will continue to grow as a result of the possibility of increased
shortages of physicians.
6. As Utah faces physician shortages, it should
be noted that enrollment at the University of Utah Medical School
has not increased since 1972 (and cannot without additional funding
and facility expansion). Advanced practice nursing programs would
likewise require added funding for expansion and the State's physician
assistant program would need both funding and facility expansion.
Section II. Workforce Requirements (Demands
and Needs)
1. Population Growth over the next 20 years will
require, at current provider ratios, that Utah increase its clinician
workforce by 1,880 physicians, 362 advanced practice nurses, and
124 physician assistants by 2020.
2. In addition to maintaining current ratios,
the projected retirement rate will require that Utah recruit: 3,540
physicians, 583 APNs, and 191 PAs to replace those retiring by 2020.
3. The aging of the population is expected to
increase the projected minimum of physicians by 20 per 100,000 total
population over the next 20 years.6
4. As the demographic composition of Utah's physician
workforce changes Utah will need to add between three and seven
percent more physicians in order to provide a minimum level of services.
Physician assistants will likewise need to increase by one to two
percent. Data for advanced practice nurses are not conclusive.
5. Due to the changing models of care delivery,
an increase in demand of five percent of the number of advanced
practice nurses and physician assistants over the next ten years
is likely.
6. Over the next twenty years, Utah will be even
more dependent upon the recruitment of clinicians, especially physicians
from outside of the State, to meet Utah's future healthcare requirements.
7. To avoid being excessively dependent upon out-of-State
recruitment, Utah's current clinician training programs must, at
a minimum, be maintained at current production capacity.
Section III. Actions to Achieve Workforce Requirements
1. Institute a clinical environment that fosters
the development and evolution of integrated workforce models.
2. To meet projected workforce requirements, Utah
is going to need to expand its physician, advanced practice nurse,
and physician assistant clinical training capacity commensurate
with population growth.
3. Utah will need to utilize multiple Utah hospitals
and ambulatory sites that have the capacity to expand healthcare
clinical training.
4. Create an interState compact for intermountain
States to combine resources in order to train clinicians in certain
specialties and subspecialties for which single State demand is
not sufficient to accommodate the cost of supplying such specialty
training by one State alone.
5. Explore options for a reallocation of Federally
supported residency slots to more nearly match Federal residency
training support to the geographic workforce requirements.
6. Policy recommendations and decisions should
be data driven. This will require the collection of quality information
elements, analysis completed using sound methods and procedures,
maintaining existing quality data resources, and continually updating
the data to keep them chronologically current.
Appendix
III.
Centers for Medicare and Medicaid Services
Special Terms and Conditions
Utah Graduate Medical Education Demonstration
Preamble. The Utah Graduate Medical Education
Demonstration aims to reallocate residency positions in the State
according to health professions work force planning. The Office
of Management and Budget approved waivers of Medicare law for the
project on March 26, 2002. The approval follows upon a cooperative
agreement dated February 18, 2000, which authorized the development
of an application for the project and request for waivers. The terms
and conditions that were approved at that time still hold.
This set of terms and conditions contains the
requirements for the project in its implementation, operational,
and close-out phases. In the demonstration, the fiscal intermediaries
will subtract direct and indirect medical education payments from
each hospital's Medicare payments and pay these amounts to the State
of Utah Medical Education Council. The terms and conditions govern
the payment of Medicare graduate medical education dollars to the
Medical Education Council, the reallocation of residents in the
State, and the close-out of the project. Standard terms and conditions
that accompany all CMS grants and demonstrations are also Stated.
1. The Utah Graduate Medical Education demonstration
will be conducted from July 1, 2002 through June 30, 2007. Both
CMS and the Utah Medical Education Council have the option to terminate
the project, as described below.
The State of Utah Medical Education Council will
implement an agreement with each participating hospital or hospital
system. These contracts will specify the length of time (a minimum
of one year) for which Medicare direct and indirect medical education
funds that would otherwise be paid to the hospital(s) will be paid
to the Council. The effective date and the length of time must be
identical for each hospital or hospital system. Each contract must
be executed at least two months prior to the effective date. Once
a contract is effective, the hospital will not be allowed to request
payment of direct or indirect medical education funds from CMS.
These agreements between the Medical Education
Council and the hospitals will be subject to CMS's approval. CMS
will have the right to determine each year, prior to the implementation
of these contracts, whether it chooses to continue the demonstration.
Similarly, the Medical Education Council will be able to end the
demonstration following a contract year. Either CMS or the Medical
Education Council must provide notice to terminate the project at
least six months prior to the implementation of the next demonstration
year.
2. These agreements between the Medical Education
Council and the hospitals shall specify methodologies according
to which the Medical Education Council will pay hospitals and other
providers for the direct and indirect costs of their training programs.
The methodologies must be agreed upon by all participating hospitals
in consultation with the officials responsible for residency and
other types of training at the hospitals, and they must be approved
by CMS before the demonstration is implemented.
3. Within 60 days of the date of agreement on
the terms and conditions of the demonstration, the State of Utah
Medical Education Council will submit to CMS for its approval a
complete operational plan for the demonstration. This plan shall
outline all proposed residency programs and positions under the
demonstration, including rotations and the length of time for each
residency program, and the payer source. As part of the plan, the
Council shall provide a detailed description for concluding the
demonstration. The plan will outline payer sources for any residency
programs that will extend past June 30, 2007, the demonstration's
concluding date. The plan will include a discussion of how the awardee
will implement any management and staffing needs for the demonstration.
4. The operational plan will be subject to review
and approval by CMS before implementation of the demonstration.
The demonstration operational plan will show that all residency
positions financed through Medicare funds are for the types of residency
training that are currently approved for Medicare funding.
5. The awardee agrees to fully cooperate in the
coordination of demonstration activities with the Medicare fiscal
intermediary and carrier, and to promptly resolve any issues or
questions as identified by the CMS project officer. The Medical
Education Council will keep all documents pertaining to residency
training at hospitals and other sites. In the case of the withdrawal
of a teaching hospital from the project, the Council will forward
these documents to the fiscal intermediary for its use and record
keeping. The Council will develop other necessary contingency plans
in the case of termination of a demonstration. These plans will
be contained in the operational plan of the demonstration.
6. For all participating hospitals, Medicare Northwest
will conduct settlement of cost reports for one year to determine
base year values of factors that will in part determine Medicare
GME payments under the demonstration. This year will be the most
recent year for which settled cost reports are available, to be
agreed upon by the fiscal intermediary, the Medical Education Council,
and CMS.
7. The Medical Education Council will receive
annually a total payment equal to the sum of the amounts determined
for direct graduate medical education (DGME) according to the demonstration
methodology. According to this methodology, a count of weighted
residents is determined from the base year cost report. This value
is to be multiplied by the hospital-specific per resident amount
updated to the respective year by inflation, and the respective
year's Medicare patient load. (In calculating amounts for DGME,
the weighted number of residents will be fixed at the level of the
base year noted in #6, whereas the respective year's value for Medicare
patient load, as calculated from the current year's cost report
will be used.)
8. The Medical Education Council will receive
an annual payment for operating indirect medical education equal
to the sum of the IME payments for each participating hospital.
Under the demonstration, operating IME payments for each hospital
will be calculated using the formula specified by then current legislation.
The calculation will use the appropriate multiplier, as specified
by then current legislation and then current DRG payments as reported
to the fiscal intermediary, but will fix the intern-and-resident-to-bed
ratio according to the base year.
9. Annual capital IME payments will be made according
to the formula specified by current law, but holding the capital
indirect medical education adjustment factor constant to the factor
defined for the base year. The number of residents, the average
daily census, and, thus the capital IME adjustment factor, will
be held constant at these base year values.
The following table summarizes the components
that will be fixed for the demonstration, and those that will be
allowed to vary and be calculated for each respective year.
|
FIXED AT BASE YEAR |
VARIABLE AT CURRENT YEAR VALUE |
SPECIFIED BY LEGISLATION |
Direct GME |
|
|
|
# Weighted Residents |
X
|
|
|
Per Resident Amount |
|
X*
|
|
Medicare Patient Load |
|
X
|
|
Indirect GME (Operating) |
|
|
|
IRB Ratio |
X
|
|
|
DRG Payments |
|
X
|
|
Multiplier |
|
|
X
|
Indirect IME (Capital) |
|
|
|
# Residents |
X
|
|
|
Average Daily Census |
|
X
|
|
10. The demonstration payment methodology for
the operating year will change to any modification to the formulas
for calculating Medicare direct and indirect medical education payments,
so that payment to the Medical Education Council will remain budget
neutral.
11. Payment for residency programs started after
the base year will be made according to the payment methodologies
Stated in #7, #8, and #9, since the resident counts for these programs
are not included in that of the base year.
12. Participating hospitals training residents
in "rural track" or "integrated rural track"
programs, started after the base year, will have Medicare payment
for these residents and eligibility determined by CFR 413.86.
13. Medicare direct and indirect graduate medical
education payments will be made to the Medical Education Council
through interim payments by the fiscal intermediary. The amount
and frequency of these payments will be specified by the fiscal
intermediary in accordance with the State's financial system and
subject to CMS approval. The total annual amount of these payments
will equal the amount calculated for direct and indirect GME payments
under #7, #8, and #9.
14. For each hospital, the fiscal intermediary
will subtract an appropriate amount of money from each interim payment
over the year, so that the total amount deducted will equal the
direct and indirect medical education payments calculated in #7,
#8, and #9. If necessary, the fiscal intermediary will conduct a
year-end settlement for differences that arise between the total
of interim payments and DGME and IME as calculated, according to
the methodology State in #7, #8, and #9.
15. The fiscal intermediary will calculate GME
payment to the Medical Education Council on the basis of hospital
cost reports, covering specified year long intervals. Because teaching
hospitals participating in the demonstration have different end
dates to their cost report years, the Council will negotiate with
participating hospitals to assure that the schedule of payment from
the Council to the hospitals is acceptable to them given the different
cost report periods. These agreements shall be included in the contracts
between the Council and the teaching hospitals, and approved by
CMS.
16. The Medicare monies received by the UMEC are
to reimburse the hospitals for the costs incurred for Graduate Medical
Education. As such these funds are outside of the scope of the Federal
Single Audit Act and the Federal Cash Management Improvement Act.
Once the reimbursement is received by the UMEC any interest earned
would accrue to the hospitals.
17. At the end of the demonstration, payments
for graduate medical education in the State will be governed by
then current Federal law.
18. Medicare funds paid through the demonstration
will not be allowed to be counted for Medicaid Federal matching.
19. Medicare Northwest and Mutual of Omaha,
the fiscal intermediary, will handle separate from the overall system
the changes necessary to send DGME and IME funds directly to the
Medical Education Council.
20. CMS and the Medicare fiscal intermediary will
determine answers to issues that may be raised by the Medical Education
Council in determining the base year amounts to be paid from cost
reports. However, once base year values for resident count are determined,
the fiscal intermediary will have the right to refuse requests for
re-openings.
21. A task force consisting of representatives
of CMS, the Medical Education Council, and the fiscal intermediary
will develop by December 1, 2002 a process to mediate disputes that
might arise about payment of Medicare GME funds to the Council.
Payment and administrative rules for the demonstration are subject
to clarification by the CMS project officer, which must be in writing.
22. The Medical Education Council has presented
a time line of steps leading to the National Residency Match in
January 2003. The Council will inform CMS of a general strategy
of its allocation among the various specialties by July 2002 and
its decision on allocations by September 2002. Each future year
of the demonstration will be approved under the condition that the
Medical Education Council provides information on its allocations,
and the allocations are approved.
23. The Medical Education Council may revise its
resident allocation decisions prior to the respective year's National
Residency Match. These revisions must be submitted to CMS to assure
continued compliance with Federal laws and regulations.
24. The State Medical Education Council will track
rotations among the participating hospitals. The Medical Education
Council will provide to CMS all data on Medicare patient days, resident
counts, and the allocation of funds to each hospital. These data
must be provided as soon as possible in the process for determining
residency allocations.
25. If there is a Medicare + Choice plan established
in Utah during the period of the demonstration project, a committee
consisting of the representatives of CMS, the Medical Education
Council, and the fiscal intermediary will determine how to include
Medicare + Choice DGME and IME payments in the demonstration project.
Appendix
IV
Utah Graduate Medical Education
Demonstration Waivers
The following are specific waivers for
the demonstration:
- Section 1886(h)(3)(A) of the Social Security
Act, and corresponding 42 CFR 413.86, which provide that Medicare
direct graduate medical education payments are made to hospitals.
Under the demonstration, direct graduate medical education payments
will be made to the State of Utah Medical Education Council instead
of to the hospitals.
- Section 1886(h)(3)(A) of the Social Security
Act, and corresponding 42 CFR 413.86. The demonstration will change
the methodology by which direct graduate medical education payment
is calculated to one that establishes an annual amount from most
recently settled cost reports of participating teaching hospitals,
to be updated by the CPI-U inflation factor.
- Section 1886(d)(5)(B) of the Social Security
Act, and corresponding 42 CFR 412.105, pertaining to the requirements
that indirect medical education payments be made to hospitals.
Under the demonstration, IME payments will be made to the State
of Utah Medical Education Council, instead of to hospitals.
- Section 1886(d)(5)(B)(I) of the Social Security
Act, and corresponding 42 CFR 412.105, that specifies the formula
by which indirect medical education payments be changed. IME payments
will be calculated using the formula specified by then current
legislation, including DRG payments and intern-and -resident-to-bed
ratio as specified by most recent settled cost reports.
- Section 1886(h)(4)(F) and corresponding 42
CFR 413.86 of the Social Security Act places a limit on the number
of FTE residents that a hospital can count for cost reporting
purposes for direct graduate medical education. This limit is
the number of FTEs on the hospital's latest cost report prior
to December 31, 1996. Section 1886(d)(5)(B)(v) establishes the
same limit for indirect medical education. Under the demonstration,
the number of residents per hospital will not be limited by this
number. The total Medicare direct and indirect graduate medical
education payment will be limited to an annual amount. Under the
terms and conditions of the waiver, CMS will review the Council's
resident allocations to assure that the amount of training is
not reduced.
- 42 CFR 413.64, which States that retroactive
payment to the hospital must be made as soon as possible by the
fiscal intermediary. Any reconciliation payment from the fiscal
intermediary that would compensate Utah teaching hospitals for
underpayment would ordinarily be made directly to the participating
hospitals. Because the teaching hospitals participating in the
demonstration have different end dates for the cost report year,
this regulation will be waived. The intermediary will wait for
the end of all cost report periods in a given calendar year, and
determine the settlement with the hospitals.
Notes
1. An introduction to the basics
and issues in graduate medical education funding is Graduate
Medical Education and Public Policy: A Primer, a publication
of the Bureau of Health Professions, HRSA, DHHS . December
2000. Rockville, MD.
2. The Summer 2000 issue of The
Journal of Rural Health is devoted to rural-based graduate medical
education.
3. Projections of clinical workforce
requirements and findings of the UMEC surveys of Utah's present
clinical workforce are compiled in the UMEC report, Utah's Clinical
Healthcare Workforce: Achieving Balance Through 2020, dated
December 2000. The executive summary of the report is Appendix II
of this report. The full UMEC report can be viewed at www.utahmec.org.
4. See Appendix II, Section III.
5. Eye on Health, October
1, 2004. Newsletter of the Rural Wisconsin Health Cooperative.
6. The number of needed APNs
and PAs is also expected to increase due to population aging, however,
specific numbers are difficult to quantify from current provider
based data.
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