to its teaching hospital or medical school. Puerto Rico also indicated no Medicaid GME support (Henderson, 2000).

Henderson estimated total state Medicaid expenditures on GME in 1998 at $2.3 to $2.4 billion.

In a summary prepared earlier this year, Henderson singled out four states—Georgia, Michigan, Tennessee, and Utah—as particularly noteworthy relative to their linking Medicaid payments to state workforce goals, and two states—Minnesota and New York—for being especially creative in pooling Medicaid and other payment sources:

  • Georgia’s Medicaid program began paying a lump sum to the Medical College of Georgia in 2000 to support core clinical training activities in the state’s five AHECs. Through an intergovernmental transfer (IGT), the sum—part of an appropriated budget for the AHEC program—was used to draw down additional federal Medicaid matching funds for clinical training of physician residents needed by the state’s medically underserved regions. Currently the total value of this “new money” is $1.45 million.

  • Michigan established three Medicaid GME pools in 1997 in order “to bring physician education more in line with its specific public policy goals to train appropriate numbers of primary care providers, enhance training in rural areas, and support education in ways of particular importance in the treatment of the Medicaid-eligible population.” For the first 3 years, there were a historic cost pool to reimburse each hospital based on what it had received in 1995; a primary care pool to encourage the training of young physicians in primary care fields (general practice, family practice, preventive medicine, obstetrics, and geriatrics) based on a hospital’s residents in primary care and its share of Medicaid patients; and an Innovations in Health Professions Education Grant Fund.

The innovations fund, financed with GME dollars that formerly were included in capitation payments to managed care organizations, was designed to foster innovations in health professions education. Funds are available only to consortia consisting of at least a hospital, a university, and a managed care plan. Examples of initiatives funded include curriculum changes to add exposure to managed care, development of evidence-based-medicine teaching experiences, and interdisciplinary efforts among different health professions.

The state started using a new Medicaid GME formula that considered characteristics of the state’s Medicaid population. It also began to require hospital participation in a managed care plan in order to receive GME funds. In addition, it opened the program to third- and fourth-year dental students to increase the participation of dentists in Medicaid and agreed to

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