Before leaving for August recess, the House Ways and Means Committee released bill language that would, if passed, turn Medicare indirect medical education (IME) payments into a fixed pool rather than the current system of per-case add-on payments. Under the current system, IME payments are made based on a hospital's intern and resident-to-bed (IRB) ratio and are added to each Medicare inpatient discharge.

Under the "Medicare IME Pool Act of 2015," which would go into effect in 2019, IME payments would be paid from a fixed pool - one that would increase only for inflation and the addition of funding for new teaching hospitals. Rather than payments based on a hospital's IRB ratio, payments would instead be based on resident FTE counts.

Potential Implications if the Bill Passes?

  • A "fixed pool" of IME funding becomes an easier target for Congressional cuts.
  • Hospitals with high Medicare volumes, complex patients, and more specialty trainees could see significant decreases to current IME funding.
  • Hospitals with low Medicare volumes, unfavorable IRB ratios, and more primary program trainees could see IME funding increases.