Strengthening the Safety Net Through Medicaid Graduate Medical Education (GME) Innovation

GME Case Study July 2025
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Project Summary

In 2019, Sellers Dorsey began working with a coalition of hospitals in a Southern state to design, develop, implement, and maintain a program to support academic medical centers and teaching hospitals through enhanced reimbursement of indirect costs of Graduate Medical Education (GME). By increasing Medicaid reimbursement, teaching hospitals are incentivized to take on additional Medicaid patients, increasing access to care and improving health outcomes.

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Program Focus

The goal of the program is to support academic medical centers’ and teaching hospitals’ workforce development, retention, and training efforts by reimbursing the indirect costs of medical training.

  • Through enhanced reimbursement, this program incentivizes expanded residency programs, increasing the supply of physicians in the state.
  • By increasing Medicaid reimbursement rates, the program has the indirect impact of expanding access to care for Medicaid recipients by incentivizing hospitals to treat more Medicaid patients.

Impacts

Strengthened its workforce to ensure continuity of care for patients.
This program supports internships, physicians providing medical education, and teaching hospitals with GME residents who are in training to become physicians.
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Residency programs can increase costs of care for teaching hospitals due to additional testing and medical training. This program helps support teaching hospitals and residents by reimbursing the increased costs of care.
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Over the first five years, this program has generated more than $1B in new federal funding for the state’s teaching hospitals.

This funding has lead to an increased number of residents and interns across all the participating hospitals.

Program Creation

After receiving legislative authorization during the 2021-2022 fiscal year, Sellers Dorsey continues to work with the coalition to:

  • Develop a program to meet the diverse needs of a broad hospital coalition
    • The program includes public and private, urban and rural, and large and small hospitals.
  • Maintain a program in a complex political and regulatory environment
  • Adapt the program to changing legislative requirements through model redevelopment.

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