Most hospitals train more physicians residents than Medicare funds, leaving many providers to either offset the expense themselves or deal with fewer physicians in their workforce, according to a new report by the Congressional watchdog.
Approximately 70% of hospitals in 2018 that offered graduate medical education programs trained more physician residents than what Medicare paid, according to a Government Accountability Office report. Only 20% of hospitals were under the amount funded.
Medicare is the single largest source for physician residency programs, paying $15 billion in 2018. But many contend the limits Medicare places on how many physician residency "slots" it will pay for teaching hospitals to have are based on outdated formulas that limit efforts to increase the number of physicians.
Medicare provides teaching hospitals with two types of payments for both direct graduate medical education costs, such as resident salaries, as well as indirect costs to cover the higher costs associated with treating a disproportionate share of sicker patients who tend to visit those facilities.
The report found a total of 18% of residents trained in 2018 were not funded by Medicare, which meant the costs were supplemented by other funding sources for resident training that include Medicaid, the Veterans Affairs Department and commercial insurers.