Health Professions

Children’s Hospitals Graduate Medical Education Payment Program

Authorizing Legislation- Section 340E of the Public Health Service Act.

FY 2008 Authorization..............................................................................................$330,000,000*
*Reauthorized by Public Law 109-307 on October 6, 2006.

Statement of the Budget Request - The FY 2008 Budget of $110,018,000 is a decrease of $186,982,000 below the FY 2007 Continuing Resolution (CR).

Program Description - The purpose of the Children’s Hospitals Graduate Medical Education Payment Program (CHGME Payment Program), is to support graduate medical education (GME) training in freestanding children’s teaching hospitals. Payments are made to these hospitals to enhance their financial viability, and to help them maintain GME programs. Payments are determined based on published formulas and methodologies that incorporate the number of residents in training, volume of patient care (number of discharges), hospital capacity (number of available beds), and severity of illness of the children treated at these hospitals (case mix index), and teaching intensity as measured by the ratio of interns and residents to available beds.

The CHGME Payment Program supports the broad teaching mission of freestanding children’s teaching hospitals, which includes conducting biomedical research, training health professionals, providing rare and highly specialized clinical services and innovating clinical care, and providing care to the poor and the underserved. Teaching hospitals have higher costs than other hospitals because of the special services they provide.

In FY 2005, the CHGME Payment Program supported 61 freestanding children’s hospitals and the training of 5,103 medical residents on and off-site. This is a slight increase from the actual numbers reported for the previous year of 4,892. The increase represents interns and residents training on-site. The financial support for the training of medical residents is based on a three-year rolling average of weighted and unweighted full-time equivalent (FTE) residents, number of discharges, number of available beds, and a case mix index.

On average, freestanding acute care children’s hospitals report devoting nearly half of their patient care to children who are assisted by public insurance (Medicaid, Medicare, CHIP) and uninsured patients. In addition, these hospitals are regional and national referral centers for very sick children, often serving as the only source of care for many critical pediatric services.

The CHGME Payment Program has a web site, (http://bhpr.hrsa.gov/childrenshospitalgme/),
where it publishes information about the program, application materials, time lines, upcoming events, and other communications. Hospitals download the application materials from the web site and complete the application electronically. All electronic communications between the hospitals and program staff are conducted through CHGME Payment Program electronic media. The program has also included on its web site the latest published performance results. The program plans to enhance and integrate its current use of information technology in its application, reporting, and financial systems to increase productivity and efficiencies for
FY 2006 and beyond.

Rationale for the Budget Request - The FY 2008 Budget of $110,018,000 is a decrease of $186,982,000 below the FY 2007 CR. The CHGME Payment Program estimates that the FY 2008 budget will provide support to 60 freestanding children’s hospitals.

Funding levels for the CHGME Payment Program during the last five years reflect this effort and are as follows:

Outputs

Performance Analysis - The program constantly strives to improve its performance. As of
FY 2006, 100 percent of program payments were made on time. The program verifies 100 percent of full time equivalent (FTE) resident counts and caps. The program has also developed and completed the two pilot studies assessing the reported number of available beds, and the reported number of discharges, and case-mix indexes. These last three measures are used in the determination of indirect medical education (IME) payments and there is no statutory requirement to audit these measures. This program was reviewed by OMB during the FY 2005 budget cycle using the Program Assessment Rating Tool (PART) and was given a rating of Adequate. Based on PART recommendations the program completed pilot studies and has developed several recommendations for consideration.