On February 12, 2018, the Trump administration released its Fiscal Year (FY) 2019 budget request. Published on an annual basis, presidential budget requests do not set the federal budget, but rather are "messaging" documents that generally play three roles in shaping federal policy:

  1. Articulating the President's recommendations for overall fiscal policy (how much the federal government should be taxing and spending);
  2. Laying out the President's relative priorities for various federal programs (how much should be spent on health care, education, defense and agriculture, for example); and
  3. Sending signals to Congress regarding recommended spending and tax policy changes.

Unlike President Trump's FY 2018 budget request, which was released to Congress in May 2017 and did not mention graduate medical education (GME), this year's request specifically calls for significant structural changes to GME funding and associated cuts to funding for residency programs and health professions training programs. Specifically, the FY 2019 budget request proposes to "consolidate[] GME spending in Medicare, Medicaid, and the Children's Hospital GME Payment Program into a new mandatory GME capped grant program" that would distribute funding "to hospitals that are committed to building a strong medical workforce." Funding would be "targeted to address medically underserved communities and health professional shortages." The President's proposal continues:

The Budget also proposes to eliminate $451 million in other health professions and training programs, which lack evidence that they significantly improve the Nation's health workforce. The Budget continues to fund high value health workforce activities, such as the National Health Service Corps, that provide scholarships and loan repayment in exchange for service in areas of the United States where there is a shortage of health professionals.

All in all, the President's proposed changes, if implemented by Congress, would result in a $48 billion cut to GME payments, as well as elimination of the Title VII health professions programs, Title VIII nursing workforce development programs, and the Public Service Loan Forgiveness programs.

But as noted, the President's budget is merely a proposal—an opportunity for Mr. Trump to signal Congress as to what its fiscal priorities should be. For any of these proposals to take effect, Congress must act legislatively. Given the broad impact of the proposed changes, we do not see widespread support in Congress at this time.

The Dentons team listed here will continue to track congressional action regarding these and any other proposed federal GME funding changes.

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