House bill calls for biggest increase in GME slots in decades

The House's version of President Joe Biden's domestic policy package includes something hospitals have been pushing for for decades: thousands more residency slots paid for by Medicare.

If enacted, this would be the biggest expansion of the Graduate Medical Education program in decades and a win for hospital groups that are projecting looming doctor shortages sparked by an aging population and retiring physicians.

The question is whether the 4,000 new slots will stay in after the bill moves to the Senate, where Democrats must make tough choices about priorities in order to secure the approval of the more moderate members of their caucus.

"COVID really exacerbated the workforce issues, particularly on the physician side, but then it just became the entire healthcare world," said Jon Cooper, senior vice president of government affairs, communications and public policy for the Greater New York Hospital Association. "That created the situation where both the House and the Senate wanted to go forward and do something bigger."

The House has not yet voted on the $1.75 trillion dollar domestic policy package—that Biden and congressional Democrats dubbed the Build Back Better Act—and it's unclear when it will.

House Speaker Nancy Pelosi (D-Calif.) was hoping to hold a vote Friday but a handful of moderate Democrats demanded an analysis from the nonpartisan Congressional Budget Office before moving forward.

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The House bill is expected to be relatively similar to whatever the Senate will eventually consider. Democratic leaders in both chambers worked closely together to craft an agreement that could pass.

The GME provisions have powerful backers from both parties in the Senate, including Majority Leader Chuck Schumer (D-N.Y.) and Budget Committee Chair Bernie Sanders (I-Vt.), and are not considered to be controversial.

Still, the bill includes less than the 14,000 new GME slots provider groups sought to alleviate a worsening physician shortage that the Association of American Medical Colleges projects will reach 40,000 by 2034.

"We realize that clearly not everyone got everything they wanted," said Leonard Marquez, senior director of government relations and legislative advocacy at AAMC. "Ultimately, where they landed will go a long way in helping improve patient access to care and help diversify the workforce."

New Medicare-financed residency slots have been a priority for hospitals for decades since Congress, worried about wasteful spending and creating a physician surplus, essentially froze new slots in 1997.

While the AAMC and other groups have been pushing for a GME expansion for several years, COVID-19 spurred lawmakers to take action.

As part of a COVID-19 relief bill enacted in December, Congress and President Donald Trump broke the decades-long freeze and added 1,000 new Medicare GME slots. This law specified what percentages of these slots would go to rural and underserved areas, new medical schools and hospitals training over their Medicare caps. The Centers for Medicare and Medicaid Services has not yet finalized a rule implementing this part of the law.

The pending House bill prescribes how the slots would be broken down along similar lines, but also prioritizes primary care and psychiatry, thrilling provider groups who have sought those changes to the GME program. For the first two distribution cycles, 25% of the new slots must be awarded for primary care residencies and 15% must be awarded for psychiatry residencies.

The legislation also would set aside 10% of new slots for hospitals in states with the lowest ratios of medical residents to population. That could benefit rural states like Alaska, Idaho Montana and Wyoming, which have among the lowest number of medical residents per 100,000 people, according to the Niskanen Center, a think tank.

"This is, in recent history, the first time that Congress has been that prescriptive," said John Aguilar, manager of legislative affairs for the American Academy of Family Physicians. "The fact that now Congress is finally looking at federal GME and saying 'How can we actually align it with workforce needs?'—that's a huge win in and of itself because oftentimes it was just, 'How can we get more GME slots?,'" he said.

The federal government spent $15 billion on Medicare GME payments in 2018, according to a recent report from the Government Accountability Office.

Some experts have argued that concerns about a physician shortage are overblown and the bigger issue is the geographic disparities in where doctors work. While about 20% of the population lives in rural areas, only about 10% of physicians practice there.

The highest density of GME slots and funding is in the Northeast, creating a geographic maldistibution of physicians, who are mostly likely to practice near where they are trained.

Rural areas in particular struggle to recruit and retain physicians from outside their home regions.

The domestic policy package would also create a new "Pathway to Practice" program that funds 1,000 annual medical scholarships for students from underserved, rural or health professional shortage areas starting in 2023. Recipients must practice for at least one year per scholarship year in those areas.