A significant breakthrough: Psychology finally gains share of GME funds

By John Thomas, Associate Editor
November 1, 1998



Language contained in the last two federal budgets represents major breakthroughs in recognizing psychology as a full-fledged partner in the treatment of hospitalized patients for the first time.

The key to winning that recognition is contained in both the Balanced Budget Act of 1997 and the $500 billion budget deal enacted Oct. 20 to fund many of this fiscal year’s programs — access to millions of dollars in Graduate Medical Education (GME) money through Medicare.

The meaning of GME funding is that psychology and physician assistant graduate training funds in an estimated sum of $10 million were made available by Congress for the first year.

The 1997 language urged the Health Care Financing Administration (HCFA) to develop plans to include psychology interns and post-doctorates in hospitals for GME funding.

Separately, new language in the current budget adopted provides that HCFA underwrite through GME a three-year demonstration project to determine the efficacy and value of psychology in the hospital treatment of chronically ill patients. While no dollar figure is written in the bill, it is expected such a three-year demonstration study would cost around $5 million.

While the University of Florida at Gainesville was specifically mentioned in the legislation as an example of a facility that would qualify as a potential site for such a demonstration project, the selection of a hospital “will be open to the competitive process,” said Mike Hall, the university’s federal representative.

Robert Frank, Ph.D., dean of the University of Florida’s College of Health Professions, who has been associated with the effort to include psychology in GME funding since he served as a Congressional Science fellow in the office of Sen. Jeff Bingaman (D-NM), said he looks at future negotiations with HCFA “in a very positive way.”

Marilyn Richmond, J.D., assistant executive director for government relations for the practice directorate at the American Psychological Association (APA), said she believes “HCFA wants to add psychology to Graduate Medical Education programs” as provided for in the 1997 legislation. “HCFA is moving in the right direction,” she added.

To help HCFA move forward on implementing the 1997 language, APA will submit an inch-thick report this month that details some of the questions the agency asked for previously.

Richmond said those questions involved items such as curricula and supervision in the 375 teaching hospitals where psychologists are being trained.

The Congressional directive to HCFA in the 1997 budget lumped together psychology and physician assistant training money. It called for spending no more than $10 million, and sources said that psychology and physician assistants would split the pot evenly.

“It’s not a whole lot of money when you consider the billions of dollars HCFA spends on graduate medical education, but it represents a beginning and definitely a breakthrough in recognizing the importance of psychology in the treatment of hospitalized patients,” said James Bray, Ph.D., a professor of psychology at Baylor University Medical Center in Houston.

It is Bray’s relationship with Rep. Bill Archer (R-TX), chairman of the House Ways and Means Committee, that first led to congressional discussion over GME funding for psychology as part of the Balanced Budget Act of 1997.

Medicare spent $6.8 billion on GME in fiscal year 1997, an increase over the $4 billion spent in 1990. Of 1997 GME spending, $2.2 billion was on “direct” medical education funding on resident salaries and education-related overhead. The remaining $4.6 billion involved “indirect” medical education payments to compensate teaching hospitals for steeper costs, which result from factors like higher patient illness severity.

The University of Florida’s Frank gave a large amount of credit in getting the 1997 language in the Balanced Budget Act to Reps. Ted Strickland, Ph.D., (D-OH) and John Dingle (D-MI). Both, he said, were unwavering in their support of GME funding for psychology and wrote to HCFA to implement the 1997 legislation.

Frank also said that the Florida congressional delegation urged HCFA’s quick action on the legislation with House Ways and Means Committee members Rep. Karen Thurman, a Democrat, and Clay Shaw, a Republican, instrumental in keeping the GME issue alive, Frank said.

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