Association of American Medical Colleges (AAMC)

On May 23 CMS issued a proposed rule asserting that Medicaid lacks the “statutory authority” to match payments for graduate medical education (GME) activities. Specifically, if this proposed “GME Rule” were implemented, states would not receive federal Medicaid matching payments for direct graduate medical education (DGME).

CMS estimated that eliminating the federal Medicaid match for DGME would reduce federal outlays by an estimated $1.78 billion over 5 years. Congress responded by imposing a one-year moratorium prohibiting (until May 25, 2008) implementation of the proposed GME rule, as well as implementation of the final rule on Medicaid cost limits/units of government (the “IGT Final Rule”). The proposed GME rule and the IGT final rule are among several regulatory changes issued by CMS in the past year. The other rules affect payments for outpatient care, school/community-based services, and rehabilitation.