Federal Support from the Graduate Medical Education Program of Medicare (GME) – A Critical Initiative for Optometry
Optometry has been included in the federal Medicare program since 1987 and receives, as other physicians, payment for Medicare services. Over the past 20 years, optometrists have become a significant health care resource for the elderly and disabled. In 1988 optometry provided $81 million in diagnostic and treatment eye care services to Medicare beneficiaries. Medicare services provided by optometrists have grown to nearly $900 million for the current fiscal year.
However, optometry is excluded from the Graduate Medical Education (GME) program, the educational support component of Medicare. In the late 1960’s, when the GME program was developed, optometrists were not recognized by Medicare as health care providers. GME was created to ensure sufficient workforce development (supply) of health care professionals to meet the needs of Medicare beneficiaries by partially offsetting the hospital costs of clinical training. The Medicare program spends over $8 billion annually for GME, but optometry is not eligible for these funds, since only programs in disciplines specifically mentioned in the law qualify. Although not originally included in GME, podiatry was added in 1972 by amendment to the law.
Since the 1970’s with the introduction of pharmaceuticals and advanced clinical procedures optometry has been in a state of transformation. Optometric clinical education likewise has evolved in response to the expanded patient management and treatment responsibilities of optometric practice far beyond the traditional role of the profession to prescribe eyeglasses and contact lenses for the correction of refractive error, significantly increasing clinical training requirements and training costs. With the aging of the United States (US) population and the projections for rising numbers of Medicare eligible beneficiaries, optometric teaching facilities will be providing significantly greater care to Medicare beneficiaries. More than ever, there is a need for federal support for optometric clinical training.
GME payments are made to support clinical training of physicians, dentists, podiatrists, nurses and certain allied health professionals, because clinical training is inherently inefficient when compared with the provision of care in non- teaching sites. Since optometry does not receive GME payments, the financial burden for the inherent inefficiencies in optometric clinical training, along with costs associated with increased training requirements, is placed upon the optometry student as a cost of education in the form of higher tuition and resulting in higher educational debt. Many optometry students incur debt in excess of $100,000. This increased financial burden measured against the income potential of optometrists threatens the supply of optometrists entering the profession. Inclusion of optometry in GME would provide much needed financial resources to optometric teaching facilities to partially offset the cost of these inefficiencies and costs of increased clinical requirements.
Also at stake is the ability of schools and colleges of optometry to find appropriate venues for the provision of clinical training. While medicine and other professions enjoy relationships with hospitals that receive GME funds for the placement of their trainees, this is not the case with schools and colleges of optometry and their clinical affiliates. The inherent inefficiencies and loss of productivity associated with training optometry students limits the number and diversity of training sites.
The anticipated increase in demand for optometric services by the aging US population requires an assessment of workforce sufficiency, and the increasing training requirements costs. It is time for Medicare to reassess its policy pertaining to financing optometric clinical education.
Background on the Graduate Medical Education Program (GME)
Currently, Medicare supports two types of GME programs providing clinical training for health professionals. The largest program is for physician, dental and podiatric residency training. Annual direct and indirect payments to teaching hospitals total $8.1 billion. Direct payments are made for trainee stipends, teaching faculty salaries and program overhead costs. Indirect payments are for higher patient severity, additional tests and productivity reductions and are a percentage add-on to the Diagnostic Related Group (DRG) rate that reflects the intensity of care required for an inpatient hospital stay.
The second and much smaller program supports nursing and allied health professionals training and payments are based on hospital cost reports. This program makes annual payments totaling $225 million to eligible facilities that are operating these programs.
Optometry’s current clinical training model is not consistent with GME eligibility criteria and current Federal law does not include optometric trainees in either GME program. All clinical training for optometry students must take place in the four year curriculum and not in post graduate residency programs, since the student must be prepared to enter practice immediately upon graduation. Optometry does not qualify for either program as optometric clinical training is not conducted primarily in residencies, nor is optometric student clinical training hospital based, as required in both the Residency Training and Allied Health components of GME.
There are two options regarding inclusion in the Medicare GME program. The first option would be to seek support for 3rd and 4th year optometry students within the current clinical training model regardless of the fact that they are not “residents” and training does not, for the most part, take place in hospitals as defined in Medicare law. The Medicare regulations are written for the teaching hospital and its medical residency training model and translating the regulation language to the current optometric clinical training model is difficult.
The second option would be to seek inclusion in the current regulations for GME Residency Training by changing the structure of optometric education. (see also: Development of A New Clinical Training Model) This option would require enactment of legislation to formally recognize post graduate training programs in optometry and to recognize that optometric training for the most part occurs in out patient facilities. To achieve the most financial support, optometry schools and colleges would need to award the Doctor of Optometry degree after three years so that the 4th year of training would be in a post-graduate residency. It would not be to optometry’s best interest to simply include the current optometry residents in the program for it would result in only a small financial benefit to optometric clinical education as there would be only a small number of non-federal residency programs eligible for GME payments. Current optometry residents, however, could then be re-designated as post graduate trainees/residents, PG 2 and PG 3 and also qualify for Medicare GME payments. Another important benefit of this option is that residents are eligible to bill for Medicare services while students are not. (see also: Optometry Students, Medicare Regulations and Third Party Plans)
There are numerous issues associated with the significant change to the optometric curriculum that the second option requires. However, the financial benefit of inclusion in an $8 billion program would have a much greater and lasting impact on optometric clinical education costs.
The aggregate annual expenditure on clinical education for the 17 schools/colleges is over $100,000,000. The average number of Medicare visits as a percentage of total clinic visits is 14% with a range of 4% to 34%. Optometry students are also placed in a variety of externship sites and the associated costs and Medicare revenues generated accrue to the externship site. These costs and revenues are not included in the above figures. It is difficult to estimate the amount of Medicare revenue that is generated at all externship sites. However, given that optometrists provide nearly $900 million annually in Medicare services, the revenue generated at these sites is likely significant.
Although the benefits of inclusion in the GME program vary among the schools/colleges, the aggregate infusion of GME funding for providing the current level of Medicare services would have a significant impact on the cost of optometric clinical education and the burden of these costs to optometry students. This policy change in GME would ensure a sufficient supply of optometrists to meet the demand for rising number of Medicare eligible beneficiaries and reduce the cost of optometric clinical training.
It is anticipated that Medicare services provided will increase from the current average of 14% to 25% over the next 5-7 years, given the predicted growth of the Medicare eligible population, and GME support for optometric clinical education would anticipate and address future demand for eye care services.
In summary, the inclusion of optometry in GME addresses: the need for workforce development (supply), the growth of population demand for eye care services and increasing clinical training costs, and is consistent with current financing policies of Medicare which are intended to anticipate and address these issues.