Legislation to Maximize GME Funding Heard in House and Senate Committees

April 11, 2024

A bill that would restructure the funding stream for the Minnesota graduate medical education (GME) system to help ensure steady funding for the state’s physicians-in-training was heard in the House Health Finance and Policy Committee on April 9. 

Minnesota’s current GME funding program, the Medical Education and Research Costs (MERC), receives about $59 million per year in funding, including a portion paid through state and federally funded Medicaid reimbursement. However, in the 2023 legislative session, the MERC program was reformulated to change reimbursement to a Medicaid inpatient fee-for-service rate. This did not increase funding for teaching hospitals and proponents argue it risks potential funding reductions in the future.  

HF 5020 (Liebling, DFL – Rochester) aims to remedy this funding gap by directing the commissioner of human services to determine and pay annual medical assistance (MA) supplemental payments to Minnesota’s teaching hospitals, for direct and indirect physician GME reimbursement. This new funding system is similar to the way Medicare pays a direct and indirect GME supplemental payment to teaching hospitals. The bill is funded through a surcharge on teaching hospitals, which is matched by federal Medicaid funds and paid back to the teaching hospitals. 

The aim of the bill is to increase Medicaid rates for teaching hospitals and maximize matching federal funds used to train Minnesota physicians. It is being championed by Metro Minnesota Council on Graduate Medical Education (MMGME) and is supported by the MMA. 

The bill was laid over for possible inclusion in a future omnibus bill. The senate companion, SF 4946 (Wiklund, DFL – Bloomington) was also laid over for future inclusion in an omnibus bill.