In July 2014, the Institute of Medicine (IOM) published a report strongly recommending that Congress reform the payment system for Graduate Medical Education over a period of ten years. These recommendations focus on five areas:

1. Strategic investment of public tax dollars, which maintains current Medicare GME support, establishes an aggregate amount from a base year (i.e. $15B spent in 2012), and phases out the current system of DME and IME payments.
2. Building governmental infrastructure to facilitate strategic investment through:
   1. GME Policy Council in the Office of the Secretary of the U.S. Department of Health and Human Services – Oversight of strategy, research and development, policy, collaboration with other organizations (i.e. licensure, accreditation, etc.), and annual reports to Congress;
   2. GME Center within the Centers for Medicare & Medicaid Services – operational aspects of GME funding and a Transformation Fund.
3. Establishment of a two-part Medicare GME fund (i.e. aggregate fund bifurcated):
   1. Operational fund to support those programs with currently approved and funded slots;
   2. Transformation fund to finance initiatives around innovation, which includes other GME program formats, performance measure development and testing, and alternative payment methods.
4. Modernization of the Medicare GME payment methodology through implementation of a national per resident amount (PRA), redirecting of funding streams directly to sponsors, and a performance-based payment system.
5. Continuation of Medicaid GME with recommendations for monitoring and oversight.

We at Partners in Medical Education, Inc., will be watching the legislative activities surrounding the IOM recommendations and will update you as 2015 progresses. However, there are actions your institution should be taking now to better understand how this might affect you. For a more in-depth look at “The IOM Report,” possible ramifications, and actions you can take now, the “The IOM Report” webinar is now available for purchase as an OnDemand webinar through our on-line store. If you need more in depth assistance, our consultants, as always, are ready to assist you.

Donna L. Lamb