MERC:MEDICAL EDUCATION & RESEARCH COSTS

MINNESOTA’S CLINICAL TRAINING SUPPORT PROGRAM

Mark Schoenbaum

Minnesota Department of Health

August 25, 2014

Original MERC Principles• Medical education benefits society at large, not just direct

health care stakeholders.• The cost of medical education should not be borne by

only a few hospitals or medical centers, but fairly allocated across the health care system.

1995 MERC Task Force

• Teaching institutions should be responsive to evolving workforce needs related to specialty, profession and skill mix;

• Health workforce should support cost, access and quality goals;

• Public policy incentives should be developed to promote training of generalists, resolve maldistributions, and influence gender/diversity mix.

MERC Formula Timeline

• MERC 1998-2003: 100% Cost per FTE

• PMAP 2001-2003: 50% Cost per FTE 50% MA volume

• 2004-2007: 67% cost per FTE, 33% MA volume10% discretionary fund

• 2007-2013: 100% MA volume20% bonus for high volume

• 2014 - on: 100% MA volume10% bonus, ends in 2016

• Roughly $600M distributed since 1998

MERC – Where the funding comes from each year

FY2015 Base Budget - $79.99 million

M

Medicaid Managed Care Carve out

$49.6 M (62 %)

Transfers $21.7 M (27%)

Federal Match - $3.8 M (4%)

Cigarette Tax$3.9 M (5%)

HCAF $1 M (1%)

MERC Fund – Where the funding goes each yearFY2015 Base Budget - $79.9 million

M

General Distribution

Formula$57.13 M

(72 %)

HCMC Clinical Ed $1.1 M(1%)

Dental Innovations $1.1 M (1%)

U of M - $19.56 M (25%)

Administration - $.149M (<1%)

Fam. Medicine Residencies $1 M (1%)

MERC Funds outside the formula• Public program funds from DHS:

• $2,157,000 to the University of Minnesota Board of Regents for the purposes in sections 137.38 to 137.40;

• $1,035,360 to Hennepin County Medical Center for clinical medical education;

• $17,400,000 to University of Minnesota for purposes of medical education;

• $1,121,640 to clinical education dental innovation grants

• Health Care Access Fund:• $1,000,000 to family medicine residency programs outside

the 7-county metro area focused on training of family medicine physicians to serve non-metro communities.  

MERC Formula Funds – 2014 base

MERC Formula 2014 - present

• Training site must be a Medicaid provider• Funds divided based on relative Medicaid volume among

all applicants

• Outlier limiters:

• Site must have at least .1 trainee FTE

• No sites shall receive a grant per FTE trainee that is in excess of

the 95th percentile grant per FTE across all sites

• No site can receive more than its reported expenditures

• Bonus to largest sites phased out

• 20% through FY 13, 10% in FY 14 & 15, 0% thereafter

MERC Eligibility

• Accredited clinical education programs for:

• Site must be funded in part by patient care revenues and be a Medicaid site

Physicians Pharmacists

Dentists Chiropractors

Advanced Practice RNs Physician Assistants

Psychologists Dental therapists and advanced dental therapists

Clinical social workers Community paramedics

Community health workers

Use of MERC Funds

• Funds flow from MDH –> Sponsoring Institution –> Training Site

• Funds must be spent on clinical training

• Sites must report their expenses

2014 MERC Distribution• 369 distinct sites received MERC funds• 83.9% of funding to hospitals• 10.9% to physician clinics• 2.5% to Pharmacies• 1.1% to Federally Qualified Health Centers• 0.1% to Dental Clinics• 71.1% of grant to Hennepin/Ramsey counties

2014 MERC DistributionTop 20 Grant Recipients

Clinical Training Facility Location MHCP Provider Type FTEs Grant

HENNEPIN COUNTY MEDICAL CENTER MINNEAPOLIS HOSPITAL 403.0 $11,123,229

UMMC FAIRVIEW MINNEAPOLIS HOSPITAL 466.6 $4,811,309

REGIONS HOSPITAL ST PAUL HOSPITAL 176.0 $4,394,591

CHILDRENS HEALTH CARE MINNEAPOLIS MINNEAPOLIS HOSPITAL 46.2 $3,155,302

ABBOTT NORTHWESTERN HOSPITAL MINNEAPOLIS HOSPITAL 78.4 $2,208,541

NORTH MEMORIAL HEALTH CARE ROBBINSDALE HOSPITAL 40.0 $2,077,248

MAYO CLINIC HOSPITAL ROCHESTER ROCHESTER HOSPITAL 450.3 $2,001,856

ST CLOUD HOSPITAL ST CLOUD HOSPITAL 13.5 $1,999,411

CHILDRENS HOSPITALS & CLINICS OF MN ST PAUL HOSPITAL 51.4 $1,741,437

UNITED HOSPITAL INC ST PAUL HOSPITAL 16.4 $1,728,344

HEALTHEAST ST JOSEPHS HOSPITAL ST PAUL HOSPITAL 25.7 $1,114,428

HEALTHEAST ST JOHNS HOSPITAL MAPLEWOOD HOSPITAL 7.8 $993,652

GILLETTE CHILDRENS SPEC HOSP ST PAUL HOSPITAL 15.9 $961,707

ESSENTIA HLTH ST MARYS MEDICAL CNTR DULUTH HOSPITAL 28.9 $958,830

PARK NICOLLET METHODIST HOSP ST LOUIS PARK HOSPITAL 30.7 $891,551

MAYO CLINIC ROCHESTER PHYSICIAN 434.5 $798,072

MERCY HOSPITAL COON RAPIDS HOSPITAL 6.8 $666,858

PARK NICOLLET CLINICS ST LOUIS PARK PHYSICIAN 8.8 $542,276

FAIRVIEW SOUTHDALE HOSPITAL MINNEAPOLIS HOSPITAL 5.4 $540,271

MAYO CLINIC HOSPITAL ROCHESTER ROCHESTER HOSPITAL 172.8 $486,139

2014 MERC DistributionGrant Ranges

Grant % Number of Sites FTEs$1,000,000 to $5,000,000 2% 11 1,767

$500,000 to $999,999 1% 8 539$100,000 to $499,999 5% 32 314

$50,000 to $99,999 6% 37 83$20,000 to $49,999 15% 96 290$10,000 to $19,999 12% 72 70

$5,000 to $9,999 13% 83 56$1,000 to $4,999 5% 30 3

Distinct Total 369* 3,221

The table below shows the number of sites and FTEs within specific grant ranges. Facilities receiving a grant less than $5,000 qualified only for cigarette tax funds.

* 252 additional applicants qualified for a grant under $1,000 and received no funds

Contact InformationMark Schoenbaum

mark.schoenbaum@state.mn.us , 651-201-3859