Grassley Letter to HHS Requests GME Funding Oversight Details

October 28, 2019

Senate Finance Committee Chairman Chuck Grassley’s (R-IA) recent letter to the Secretary of the Department of Health and Human Services (HHS) requests detailed information on Federal funding for graduate medical education (GME) programs.

This is an attempt to understand how HHS spends GME funding and what oversight processes are in place to minimize waste, fraud, and abuse. The letter notes that hospitals receive benefits from residency programs—including “subsidized labor (including on-call coverage), the prestige of managing a residency program, increased donations, higher patient volumes, and the ability to negotiate higher prices from private payers”—and asks whether HHS has calculated the value of these benefits. The letter also requests details on how the various HHS agencies ensure consistency in GME policy and in the number of residency slots in rural states compared to other states.

GNYHA and our allies welcome this opportunity to address the Chairman’s concerns. Academic medical centers and other teaching hospitals in both urban and rural areas train residents as part of their mission to develop the future physician workforce and to care for their communities. A recent GNYHA analysis found that 62% of US teaching hospitals train residents above their Congressionally imposed caps (including 47% of rural teaching hospitals) without HHS support. For this reason, GNYHA continues to press Congress to provide resident-cap relief for urban and rural hospitals. Specifically, we are working on Capitol Hill to garner support for the Resident Physician Shortage Reduction Act of 2019 and the Opioid Workforce Act of 2019. The Resident Physician Shortage Reduction Act of 2019 would create 15,000 new Medicare-reimbursed residency slots over five years and has more than 150 cosponsors. The Opioid Workforce Act of 2019 would create 1,000 new slots in specialties related to substance use disorders and has passed the House Ways & Means Committee with bipartisan support.

GNYHA will brief the Senate Finance Committee majority staff on the various oversight and audit processes already in place to ensure that teaching hospitals are not overpaid. Teaching hospitals are subject to regular review of their Medicare GME funding through annual audits of submitted cost reports. Every teaching hospital receiving Medicare GME funding is also required to submit detailed resident-level information to Medicare Administrative Contractors (MACs) to ensure that all Medicare GME funding is justified. CMS and the MACs regularly review these processes to eliminate inadvertent overpayment.