Medicaid's role in financing graduate medical education

Medicaid is the second-largest explicit payer of graduate medical education (GME). All but five states pay for GME ($2.4 billion in 1998). As states rapidly move their Medicaid populations to managed care, Medicaid support for GME is subject to change. Just sixteen states and the District of Columbia carve out Medicaid GME payments from capitated rates to managed care plans and rechannel them to teaching programs. Concurrently, managed care has motivated several states to distribute Medicaid GME funds in ways more explicitly accountable to the public. Ten states require that GME payments be directly linked to state policy goals intended to vary the distribution of or limit the health care workforce.