Graduate Medical Education Financing in the US Department of Veterans Affairs
Background: The US Department of Veterans Affairs (VA) partners with 250 sponsors of graduate medical education (GME), annually providing $850 million for 11,000 full-time equivalent resident positions that support veteran patient care and provide educational opportunities for trainees from affiliated academic programs. Knowledge of VA GME financing is vital to maintain these partnerships.
Observations: In response to increased scrutiny from several federal oversight bodies, the VA revised its GME reimbursement policy and procedures, including implementing new resident tracking and auditing mechanisms. This article describes the VA GME reimbursement policies and procedures and, to facilitate understanding, compares GME financing policies of the VA and Centers for Medicare and Medicaid Services. Similarities include counting full-time equivalent positions for reimbursable resident activities (eg, patient care and didactics) and ensuring reimbursement is limited to 1 payment per resident. Differences include funding of resident salaries and benefits, indirect funding to support education, and the calculations to determine reimbursement.
Conclusions: The VA continues to refine its GME financing policies and procedures to maintain compliance with laws and regulations, and to provide accurate reimbursement to academic affiliates. This endeavor is essential to support the vital GME partnerships between the VA and its affiliate institutions.
ESTABLISHING GME PARTNERSHIPS
An affiliation agreement establishes the administrative and legal requirements for educational relationships with academic affiliates and includes standards for conducting HPE, responsibilities for accreditation standards, program leadership, faculty, resources, supervision, academic policies, and procedures. The VA uses standardized affiliation agreement templates that have been vetted with accrediting bodies and the VA Office of General Counsel.
A disbursement agreement authorizes the VA to reimburse affiliates for resident salary and benefits for VA clinical and educational activities. The disbursement agreement details the fiscal arrangements (eg, payment in advance vs arrears, salary, and benefit rates, leave) for the reimbursement payments. Veterans Health Administration (VHA) Directive 1400.05 provides the policy and procedures for calculating reimbursement for HPT educational activities.26
The VA facility designated education officer (DEO) oversees all HPE programs and coordinates the affiliation and disbursement agreement processes.27 The DEO, affiliate DIO, residency program director, and VA residency site director determine the physician resident FTE positions assigned to a VA facility based on educational objectives and availability of educational resources at the VA facility, such as patient care opportunities, faculty supervisors, space, and equipment. The VA facility requests for resident FTE positions are submitted to the OAA by the facility DEO.
Once GME FTE positions are approved by the OAA, VA facilities work with their academic affiliate to submit the physician resident salary and benefit rate. Affiliate DIOs attest to the accuracy of the salary rate schedule and the local DEO submits the budget request to the OAA. Upon approval, the funds are transferred to the VA facility each fiscal year, which begins October 1. DEOs report quarterly to the OAA both budget needs and excesses based on variations in the approved FTEs due to additional VA rotations, physician resident attrition, or reassignment.
Resident Position Allocation
VA GME financing provides flexibility through periodic needs assessments and expansion initiatives. In August and December, DEOs collaborate with an academic affiliate to submit reports to the OAA confirming their projected GME needs for the next academic year. Additional positions requests are reviewed by the OAA; funding depends on budget and the educational justification. The OAA periodically issues GME expansion requests for proposal, which typically arise from legislation to address specific VA workforce needs. The VA facility DEO and affiliate GME leaders collaborate to apply for additional positions. For example, a VA GME expansion under the Veterans Access, Choice, and Accountability Act of 2014 added 1500 GME positions in 8 years for critically needed specialties and in rural and underserved areas.5 The Maintaining Internal Systems and Strengthening Outside Networks (MISSION) Act of 2018 authorized a pilot program for VA to fund residents at non-VA facilities with priority for Indian Health Services, Tribes and Tribal Organizations, Federally Qualified Health Centers, and US Department of Defense facilities to provide access to veterans in underserved areas.6
The VA GME financing system has flexibility to meet local needs for additional resident positions and to address broader VA workforce gaps through targeted expansion. Generally, CMS does not fund positions to address workforce needs, place residents in specific geographic areas, or require the training of certain types of residents.4 However, the Consolidated Appropriations Act of 2021 has provided the opportunity to address rural workforce needs.28
