Medicare provides funding for graduate medical education (GME) through direct and indirect payments totaling around $9.5 billion annually. These payments help cover the costs of training resident physicians and addressing the higher treatment costs of complex patients at teaching hospitals. However, Medicare GME funding has been capped since 1997, forcing cuts to residency programs and slots. Proposed further cuts to funding could reduce access to healthcare by decreasing the number of physicians trained and reducing services at teaching hospitals.

1. MEDICARE GME FUNDING CUTS INFO SHEET
Background
Medicare was created in 1965 as a health insurance program for the nation’s elderly. It also
covers several groups of people, generally thought of as long-term disabled.
As part of this legislation, the Direct Graduate Medical Education payment system was created
to compensate teaching hospitals for Medicare’s share of the costs directly related to training
residents (salaries for residents, teaching faculty, admin staff). Currently, this is ~$3 billion/year.
In 1983, Congress added Indirect Graduate Medical Education payment to help teaching
hospitals defray the cost of caring for the most complex patients as the DRG case system failed
to account for the severity of illness of patients requiring the specialized treatment provided by
teaching institutions and the additional costs of teaching residents. Currently, ~$6.5 billion/year.
Medicare GME funding has been effectively capped since 1997 (forcing teaching institutions to
cut residency slots, programs, or find alternate methods of financing).
Intro Script
-Call 1-866-727-4894. Ask for the office of your legislator.
-Probably leaving a message. Leave name, address, phone number/email address (optional).
-Remember: RESPECTFUL!! FACTS!! LOCAL/PERSONAL ANECDOTE!! THANK THEM!!
“As a psychiatric physician and a constituent, I wanted to urge Senator/Congressman _____ to
oppose suggested cuts for Graduate Medical Education in the ongoing deficit reduction talks.
As a resident in the largest academic medical center in Western Pennsylvania, I know these cuts
could result in fewer residents trained to be PA physicians, decreased services to some of the
sickest patients in PA, and ultimately, increased costs and health care problems down the line.
Training additional physicians to address PA’s current and future medical workforce shortage
must be a priority; cuts in funding will reduce access to essential healthcare services in
communities across PA. Please oppose these suggested cuts to the physician workforce.”
Talking Points
-This will result in the loss of residency slots in established residency programs and the elimination
of residency programs in smaller programs across the country (especially in rural areas!). Even a
SMALL (~2-3%) cut means residency slots lost!
-We’re going to need MORE physicians, not LESS! We’re looking at a shortage of 6,000 to
8,000/year over the next 20 years to avoid a crisis in access to health care.
-These cuts would cut funding from the very hospitals at the front line of providing care for the
nation’s most complex and challenging patient populations (Trauma ICUs, Burn centers).
-We understand the need to curb the national debt, but this is cutting core investment spending
that will cost more in the long run.
-Teaching hospitals are huge economic engines. Cutting this funding results in lost jobs, local
economic decline. PA has a large number of teaching hospitals!