Health Care Workforce: Views on Expanding Medicare Graduate Medical Education Funding to Nurse Practitioners and Physician Assistants

An adequate, well-trained health care provider workforce is essential to ensure Americans have access to quality health care services. However, studies have shown the United States faces a shortage of physicians, making it increasingly difficult for people to access needed health care. Experts have identified ways to address this shortage, such as through strategies that increase the number of other types of non-physician providers, including NPs and PAs. For example, members of Congress and others have questioned whether expanding the scope of the Medicare GME program to include NPs and PAs could help mitigate the effects of a physician shortage.

A Senate Committee on Appropriations report included a provision for GAO to examine the potential of making GME payments under the Medicare program for NPs and PAs. This report describes: (1) stakeholder views on the potential benefits and challenges of expanding the Medicare GME program to include NP and PA graduate training; and (2) available information on the estimated costs of NP and PA graduate training.

GAO reviewed literature and interviewed officials from nine professional associations with knowledge of NP, PA, and physician graduate training; and agency officials. Based on these interviews, GAO identified sources of information on estimated costs and reviewed those sources.

The federal government funds many education programs for health care providers, but the vast majority of this funding—more than $10.3 billion in 2015—supports physician residency training through the Department of Health and Human Services's (HHS) Medicare graduate medical education (GME) program. This program does not fund graduate training for nurse practitioners (NP) and physician assistants (PA) who deliver many of the same services as physicians, such as diagnosing patients and performing certain procedures. Instead, a smaller portion of federal funding—approximately $136 million in fiscal year 2019—is available to train them. Stakeholders GAO interviewed said that one benefit of expanding Medicare GME is that Medicare GME funding would provide more stable funding for NP and PA training, compared to existing programs. Stakeholders said one challenge of such an expansion is that clinical training requirements for NPs and PAs are different than physicians; therefore, any change to Medicare GME to include NPs and PAs would need to consider how to allocate GME funding in light of these differences.

GAO identified two estimates of costs for completing an NP or PA graduate school program; while the estimates provide some information about these costs, they are limited and incomplete. The Centers for Medicare & Medicaid Services' (CMS) evaluation of its Graduate Nurse Education Demonstration estimated the total costs over the 2012-2018 demonstration period to be about $47,000 per NP student. While clinical and classroom training are required for NP students, CMS's demonstration only provided funding for clinical training, as specified by statute, and the estimate is not generalizable beyond the participating schools. The Physician Assistant Education Association estimated the total costs to be about $45,000 per PA student. The estimate is based on self-reported data from a 2018 survey of member PA programs and excludes in-kind contributions for clinical training. GAO received technical comments on this report from HHS and the professional associations interviewed and incorporated them as appropriate.

An adequate, well-trained health care provider workforce is essential to  ensure Americans have access to quality health care services. However,  studies have shown that the United States faces a shortage of physicians,  making it increasingly difficult for people, particularly those in rural areas,  to access needed health care. Experts have identified ways to help  mitigate this physician shortage, such as by increasing the number of  certain types of non-physician providers, including nurse practitioners  (NP) and physician assistants (PA). NPs and PAs complete graduate- level education and are trained to deliver many of the same types of  services as physicians, such as diagnosing patients, prescribing  medication, and performing certain procedures, but the extent to which NPs and PAs are permitted to provide care independently from physician  supervision varies by state.

We previously reported that, while a number of factors affect the supply  and distribution of physicians, the cost of graduate medical education  (GME)—commonly known as residency training—is a significant  determinant. The federal government—largely through the Department  of Health and Human Services (HHS)—funds numerous education and  training programs for health care professionals, but the vast majority of  this funding supports physician residency training through Medicare’s  GME program. The Medicare GME program, which is administered by the  Centers for Medicare & Medicaid Services (CMS), does not fund graduate  training for NPs and PAs; instead, a smaller portion of federal funding is  available to train these health professionals, primarily through grants and  other financial assistance from the Health Resources and Services  Administration (HRSA). Members of Congress and others have  questioned whether expanding the scope of the Medicare GME program  to also include NPs and PAs could help mitigate the effects of a physician  shortage.

A report accompanying the Departments of Labor, Health and Human  Services, and Education, and Related Agencies Appropriation Bill, 2018,  included a provision for us to examine the potential of making GME  payments under the Medicare program for NPs and PAs and to identify  the costs involved in training NPs and PAs. In this report, we describe  1.  stakeholder views on the potential benefits and challenges of  expanding the Medicare GME program to include NP and PA  graduate training, and  2.  available information on the estimated costs of NP and PA graduate  training.

To describe stakeholder views on the potential benefits and challenges of  expanding the Medicare GME program to include NP and PA graduate  training, we interviewed officials at nine stakeholder organizations— professional associations with knowledge about graduate training for  NPs, PAs, and physicians. (See table 1.) We identified these  stakeholders through referrals from other stakeholders we had  interviewed—an iterative process known as snowball sampling. We also  interviewed agency officials from CMS and HRSA.

In addition, we reviewed the statutes and regulations related to the  funding of Medicare GME training and conducted a literature review. To  identify relevant studies, we searched multiple reference databases and  reviewed abstracts of studies to select potentially relevant studies for full  review. Of the 36 studies that were potentially relevant, we identified two  that discussed the policy implications of expanding the Medicare GME  program to include NP and PA graduate training.

To describe available information on the estimated costs of NP and PA  graduate training, we reviewed two cost estimates: one for NP training  reported in CMS’s evaluation of the Graduate Nurse Education  Demonstration, which funded graduate nurse education from 2012  through 2018, and one based on data from a published 2018 member  survey from the Physician Assistant Education Association. We identified  these estimates through our interviews with NP and PA stakeholder  organizations as well as with CMS and HRSA officials. We described  these cost estimates as they were reported by the sources, and we  identified some limitations that are applicable for determining the total  cost of NP or PA graduate training. However, we did not independently  verify the accuracy of the information or evaluate the methodology used  by these sources to calculate the cost estimates. Based on our interviews  with officials from CMS and the Physician Assistant Education  Association, we found the estimates to be sufficiently reliable for the  purposes of our reporting objectives. We also conducted a literature  review of studies that estimated the costs of NP and PA graduate training,  but we did not identify any relevant studies.

We conducted this performance audit from February 2019 to December  2019 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.

According to HRSA, the current demand for physicians in the United  States will likely continue, with a projected shortage of 23,640 primary  care physicians by 2025. While increasing physician supply is one way  to reduce physician shortages, some experts have also suggested  increasing the number of non-physician providers. For example, HRSA  predicted that, with health care delivery changes that would allow for NPs  and PAs to deliver a greater proportion of services than they do now, the  projected shortage of 23,640 primary physicians in 2025 could be  mitigated. According to the Bureau of Labor Statistics, in 2018, there were  756,800 physicians, over 189,100 NPs, and 118,800 PAs practicing in the  United States.

Graduate Training for Physicians, NPs, and PAs

Physicians. Physician GME, also known as residency, provides the  clinical training required for a physician to be eligible for licensure and  board certification to practice medicine independently in the United  States. Specifically, after completing medical school and receiving a  medical degree, physicians enter a multi-year residency training program  during which they complete their formal education as a physician,  primarily in teaching hospitals. Completion of a residency can take from 3  to 7 years after graduation from medical school, depending on the  specialty or subspecialty chosen by the physician. In some cases,  physicians may choose to pursue additional training—referred to as  fellowships—to become a subspecialist, such as a cardiologist.

NPs and PAs. Since the first NP and PA training programs in the United  States were founded in 1965, these professions and their educational  requirements have evolved to allow them to furnish more care that was  traditionally provided by physicians, such as diagnosing patients,  prescribing medication, and performing certain procedures. The extent to  which they can provide care independently from physician supervision  varies by state.

There are multiple pathways for students to become NPs. In general,  after completion of a bachelor’s degree, a nurse may become an NP once  he or she achieves a master’s or doctoral degree in nursing. Full-time  master’s programs are generally 18 to 24 months and doctoral programs  are generally 3 to 5 years. Both programs include classroom and clinical  work. In addition, NP students may have varying amounts of hands-on  nursing experience before entering an NP program. NP programs  generally include the following focus areas: family practice, women’s  health, acute care, adult/geriatric health, child health, neonatal health,  and mental health. NPs are trained according to a nursing care model,  which emphasizes providing comprehensive care for patients that  encompasses their physical and other needs.

After completion of a bachelor’s degree, students become PAs once they  earn a master’s degree in physician assistant studies. The average full- time PA program takes about 27 months to complete, which includes  classroom education followed by clinical work conducted through  rotations in internal medicine, family medicine, surgery, pediatrics,  obstetrics and gynecology, emergency medicine, and behavioral  medicine. In addition, PA students have varying amounts of hands-on  work experience in health care before entering a PA program. PAs are  trained to approach patient care according to a medical model focused on  assessing, diagnosing, and treating disease.

Both NP and PA students are required to complete clinical work as part of  their graduate programs by providing care to patients under the  supervision of a preceptor—an experienced and licensed health care  provider who provides instruction and supervision to the student during  their clinical rotations. Upon graduation and after passing a national  certification exam and obtaining a license in the state in which they  choose to work, both NPs and PAs can begin practicing. NPs and PAs  may also complete an optional post-graduate residency training program,  but unlike physicians, they are not required to do so in order to obtain a  state license to practice. Figure 1 shows an example of education and  training paths for physicians, NPs, and PAs.

Federal Funding for Physician, NP, and PA Training

Physicians. The vast majority of federal funding for physician GME  training is distributed by HHS through CMS’s Medicare GME program. In  our 2018 report on GME funding, we found that Medicare GME payments  for physicians totaled more than $10.3 billion in 2015. CMS pays for a  hospital’s costs associated with GME training through two mechanisms— direct graduate medical education and indirect medical education  payments—both of which are formula-based payments set by statute.  Direct payments are for costs that include, for example, residents’  salaries and benefits, compensation for faculty who supervise the  residents, and overhead costs. Indirect payments are for costs including  higher patient care costs that teaching sites are thought to incur as a  result of training residents, such as increased diagnostic testing and  procedures performed. Payments to hospitals may also include funds for  training in nonhospital settings. Other sources of federal GME funding  for physicians include the Medicaid program, which is jointly administered  by CMS and the states, programs administered by HRSA, and other  federal agencies outside of HHS.

NPs and PAs. HHS funding is available to train NPs and PAs, primarily  through HRSA grants authorized under titles VII and VIII of the Public  Health Service Act. Specifically, according to HRSA officials, funding for  programs that included NP and PA training totaled approximately $136.2  million in fiscal year 2019. (See table 2 for a description of these  programs.)

In recent years, CMS also provided funding for graduate training for  advanced practice registered nurses, including NPs, from fiscal years  2012 through 2018 as part of the Graduate Nurse Education  Demonstration. The Graduate Nurse Education Demonstration was  established by the Patient Protection and Affordable Care Act to  determine whether payments for clinical training provided to hospitals  would increase the number of advanced practice registered nurses,  including NPs, and whether these payments would affect the number of  advanced practice registered nurses by specialty.

Stakeholders Identified Benefits and Challenges of Expanding the Medicare GME Program to Include NP and PA Graduate Training

Officials from the stakeholder organizations we interviewed identified the  potential benefits and challenges of expanding the Medicare GME  program to include NP and PA graduate training.

Benefits of Expanding the Medicare GME Program

Predictability and stability of Medicare GME program funding.

According to officials from five of the nine stakeholder organizations  we interviewed—three NP and two PA organizations—a benefit of  expanding the Medicare GME program is that it may create more  predictability and stability for training funding for NPs and PAs. This  would be beneficial by allowing NP and PA programs to do better  long-range planning such as planning for the number of NP and PA  students that can be admitted. Officials from two of these stakeholder  organizations noted that a benefit of the Medicare GME program for  physicians is that funding is historically more stable than the funding  available to NPs and PAs through HRSA. Specifically, Medicare GME  funding is mandatory, while funding for NP and PA training programs  administered by HRSA is discretionary. During the annual  appropriations process, Congress may choose to appropriate the  amount requested by HRSA, to increase or decrease those levels, or  to not appropriate any funds. For example, Congress appropriated  $28.5 million in fiscal year 2018 for HRSA’s Nurse Faculty Loan  Program, but then decreased this appropriation to $13.5 million in  fiscal year 2019.

Potential opportunity to pay preceptors. Officials from four of the  nine stakeholder organizations—two NP and two PA organizations— noted that one benefit of expanding the Medicare GME program to  include NP and PA graduate training is that funding could be used to  pay preceptors as an incentive to supervise students. CMS and others  have also reported that schools of nursing have faced significant  challenges increasing enrollments, in part due to difficulty finding  preceptors willing to supervise students. Similarly, officials from two  PA organizations we interviewed noted that some programs may  choose not to fill their available enrollment slots because they are  concerned about finding enough preceptors to allow all their students  to graduate. Officials from four of the stakeholder organizations we  interviewed noted that supervising students can take time away from  the preceptor’s productivity in seeing patients, and that some  practices and health care systems do not allow their health care  providers to serve as preceptors. Specifically, officials from two  stakeholder organizations we interviewed said that, historically, these  preceptors have volunteered as a way of “giving back” to their  profession and have not been paid for their time. However, due to  difficulties finding a sufficient number of volunteer preceptors, some  graduate programs have begun reimbursing preceptors for their time  in order to encourage their participation. CMS’s Graduate Nurse  Education Demonstration also included funding for preceptors.

Differences in training requirements. Officials from six of the nine  stakeholder organizations—two NP, two PA, and two physician  organizations—raised concerns about challenges that could occur  because NP and PA clinical training requirements do not align with  the current structure of the Medicare GME program. For example,  officials from some of these organizations noted that the Medicare  GME program is structured to fund physician residency training, which  is required in order for physicians to practice, but NPs and PAs are  not required to complete a residency after completing a graduate  program in order to practice. Specifically, CMS makes GME  payments to hospitals according to formulas outlined in statute based,  in part, on the number of physician residency positions. Therefore,  officials from some of these stakeholder organizations said that any  change to Medicare GME to include NPs and PAs would need to  consider how to allocate GME funding for NP and PA programs in  light of these differences in training requirements between physicians,  NPs, and PAs.

Potential limitations on Medicare funding for physician training.

Officials from seven of the nine stakeholder organizations we  interviewed—four NP, one PA, and two physician organizations— expressed concern that expanding the Medicare GME program to  increase the number of NPs and PAs without increasing overall  funding may negatively impact the funding available for physician  training. For example, officials from one stakeholder organization said  that reallocating available Medicare GME dollars could be problematic  and potentially diminish needed resources for others. An official from  one of these stakeholder organizations said that there is currently not  enough funding to provide residency training for all qualified  physicians, and adding NPs and PAs to the existing pool of  underfunded residency candidates would worsen the funding  shortage. Officials from another stakeholder organization echoed this  concern by noting that expanding the Medicare GME program could  force NPs to compete with physician residents for patients and space.

Available Estimates of NP and PA Training Costs Were Limited and Incomplete

Through our review of the literature and our interviews with officials from  stakeholder organizations, CMS, and HRSA, we identified two estimates  of NP or PA graduate training costs. CMS’s evaluation of its Graduate  Nurse Education Demonstration estimated the total cost of graduate  clinical NP training to be about $47,000 per student, based on the funds  paid to the demonstration sites from fiscal year 2012 through fiscal year  2018, and the Physician Assistant Education Association estimated the  total cost of graduate PA training to be about $45,000 per student, based  on the results of its 2018 survey. While these two estimates provide some  information about the costs of training NPs and PAs, they provide limited  and incomplete information on these costs.

CMS Graduate Nurse Education Demonstration. CMS estimated  NP graduate training costs totaling $47,172 per graduate according to  its evaluation of the Graduate Nurse Education Demonstration, in  which CMS funded graduate clinical training for advanced practice  registered nurses—a category that includes NPs—over 6 years.  This estimate represents the cost to CMS (defined as the total funds  paid to the demonstration sites during the duration of the  demonstration) for the clinical training of each graduating student.  Part of the cost covered by the demonstration includes the costs of  clinical preceptors. Congress appropriated a total of $200 million for  the demonstration, which operated from fiscal years 2012 through  2018. The demonstration funded clinical training at five hospitals,  which partnered with 19 schools of nursing, and multiple community- based care settings.

The cost estimate underreports the total cost of NP graduate training  because, while both clinical and classroom training are required for  NP students to graduate, CMS’s demonstration only provided funding  for clinical training, as specified by the Patient Protection and  Affordable Care Act. Specifically, CMS does not include the costs  associated with classroom training, certification, and licensure of  advanced practice registered nursing students. In addition, the  demonstration targeted advanced practice registered nurses, which is  a broader category that includes NPs in addition to other types of  specialty nurses such as certified nurse-midwives and certified  registered nurse anesthetists. However, according to CMS, the vast  majority of advanced practice registered nursing students enroll in NP  programs. CMS’s evaluation also noted that the cost estimates are  not generalizable because they are only based on information from  the schools that participated in the demonstration. (See table 3.)

Physician Assistant Education Association survey data. The  Physician Assistant Education Association, whose members are  graduate PA programs, estimated PA graduate training costs totaling  $45,309 per student—an estimate based on the results of a published  annual survey of its members in 2018. This represents the average  cost to the member PA programs for training a student in a 27-month  PA graduate program, based on expense data reported by programs  from the 2017-2018 fiscal year.

The Physician Assistant Education Association’s data are self- reported by PA graduate programs. In addition, these data likely  underreport the total costs of graduate PA training because they  exclude in-kind contributions from clinical sites. These contributions,  such as the donated time from volunteer preceptors, are necessary  for clinical training. Officials estimated that paying for costs supported  by these in-kind contributions—which the Physician Assistant  Education Association estimated to be about $11,300 per student— would likely add an additional 25 percent to the total estimated cost to  train PAs. (See table 4.)

We provided a draft of this report to HHS for review and comment. The  department provided technical comments, which we incorporated as  appropriate.

We also provided relevant draft portions of this report to the nine  professional associations that we interviewed and they provided technical  comments, which we incorporated as appropriate.

We are sending copies of this report to the appropriate Congressional  committees, the Secretary of Health and Human Services, and other  interested parties. In addition, the report is available at no charge on the  GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-7114 or cosgrovej@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix I.

Appendix I: GAO Contact and Staff Acknowledgments

James Cosgrove, (202) 512-7114 or cosgrovej@gao.gov.

In addition to the contact named above, Kelly DeMots (Assistant  Director), Teresa Tam and Sarah-Lynn McGrath (Analysts-in-Charge),  and Margaret Fisher made key contributions to this report. Also  contributing were Leia Dickerson, Diona Martyn, Caitlin Scoville, Ethiene  Salgado-Rodriguez, and Jennifer Whitworth.

Studies point to a physician shortage in the U.S., making it harder for people to get needed health care. Training more nurse practitioners and physician assistants could help people get care.

Most federal funding to educate health care providers funds physician residencies through Medicare's graduate medical education program. Could that program be expanded to include nurse practitioners and physician assistants?

According to stakeholders, there could be benefits and challenges. For example, the program would provide reliable funding from year to year. But stakeholders were also concerned about diverting resources from physician residencies.