The Cost of Residency Training in Teaching Health Centers.

for primary care services from new private health insurance markets and Medicaid coverage expansions under the Affordable Care Act (ACA), Congress authorized the creation of the Teaching Health Center (THC) Graduate Medical Education (GME) program, a $230-million, 5-year initiative that began in 2011.1 The program was designed to increase the number of primary care physicians and dentists trained in community-based settings, on the basis of the welldocumented principle that doing so will build long-term clinical capacity in those communities.2 THCs establish GME programs near places where people live and work, following a model that emphasizes community-based training as part of the educational process. THC residents begin participating in clinical care at a modest intensity of service delivery, which increases over the course of the residency. Their clinical engagement is not only educational: it augments the delivery capacity of the clinic and its community. Medicaid populations, which face chronic clinician shortages, particularly benefit from THC programs. Funding limitations are the principal barrier for many community-based clinics that would like to start or expand GME programs. The principal support for U.S. GME comes from Medicare, in the form of payments to hospitals based on the numbers of residents, beds, and Medicare bed-days. Despite modifications in Medicare regulations, GME funding remains a hospital entitlement, and transferring funds to community-based organizations for residency training has proved difficult. THCs, whose characteristics differ from those of hospitals, require a costing rationale different from that of Medicare GME, which is based on direct and indirect payments to hospitals. The Health Resources and Services Administration (HRSA), which administers and funds the THC program, established an interim annual rate of $150,000 per resident — a figure that reflected expert opinion at the time — until actual costs could be determined. In 2015, Congress reauthorized the THC program at $60 million per year for 2 years, reducing the effective rate that THCs receive to $95,000 per resident per year. This lower payment level has caused some THCs to recruit fewer residents. Today, 59 THC programs are training 690 residents in six primary care specialties in 27 states The Cost of Residency Training in Teaching Health Centers