PMAP Distribution Frequently Asked Questions - Minnesota Dept. of Health

PMAP Distribution Frequently Asked Questions

When will the next PMAP distribution take place?

Since receiving a federal waiver to allow us to distribute carved-out PMAP/PGAMC funds directly to clinical training sites in August, 2000, the Department of Health had been distributing PMAP/PGAMC funds twice a year. The first distribution of $4.4 million took place in June, 2001, and since that time the Department has distributed over $55 million to clinical training sites. The last stand-alone PMAP/PGAMC distribution, which contained roughly $19 million that had been removed from capitated payments between January 1 and June 30, 2003, took place in August, 2003. During the 2003 Legislative session, however, the Legislature made several changes to the MERC statute that impacted the PMAP distribution. As a result of these changes, beginning in CY2004, there will no longer be a stand-alone PMAP/PGAMC carveout distribution.

The 2003 Legislature reduced the amount of funds available for the PMAP/PGAMC distribution by redirecting PGAMC medical education dollars to the General Fund. Beginning in FY2004, the remaining PMAP carveout dollars will be combined with MERC funds to create a combined MERC/PMAP medical education fund that is governed by a single distribution formula and distributed annually. In other words, rather than receiving a MERC grant in June and PMAP grants in February and August, clinical training sites will now receive a single grant that combines the funds from both sources. The combined distribution is expected to be awarded in July or August each year.

How will carved out PMAP/PGAMC funds be distributed?

Prior to July 1, 2003, MERC legislation called for carved out PMAP/PGAMC funds to be distributed using a formula that equally weighted education volume and Medicaid volume. One-half of the carved out funds were distributed based on the same formula that governs the distribution of general MERC dollars; total costs for each training site were calculated using average clinical training costs per trainee multiplied by number of eligible trainees, then each site's percentage of total costs was calculated to determine the percentage of the Fund that site would receive. Distribution of the other half of the PMAP/PGAMC dollars was calculated using a process that calculates each training site's public program volume as a percentage of total public program volume:

((# eligible trainees * average costs/trainee for provider type) / total costs across all sites) * 50%


(public program revenue at site / grand total of public program revenue across sites) * 50%

In its January 2001 report to the Legislature, "Recommendations for a Modified PMAP/PGAMC Distribution Formula" (PDF: 113KB/32 pages), the Department of Health recommended a modification of the current distribution formula to increase the weight given to public program volume to 75% from its current level of 50%. This would have had the result of shifting some funds to training sites that see a higher number of public program patients. While the formula change was introduced in both the House and the Senate, no changes were ultimately made. As a result, PMAP/PGAMC funds continued to be distributed using the '50/50' formula.

Beginning in SFY2004, as described above, funds carved out of capitated PMAP rates will be combined with MERC funds to create a combined MERC/PMAP distribution. The distribution formula governing this combined pool will operate similarly to the previous PMAP formula, but the weight given to relative medical education volume will be 67% and the weight assigned to relative public program volume will be 33%.

How will the PMAP distribution formula work for a specific site?

To compute the public program volume factor of the PMAP formula, the Department of Health will sum the PMAP volume for every site that applied for the MERC Fund. The total PMAP/PGAMC/MA/GA revenue for an individual site will be divided by the total PMAP revenue for all sites to calculate that site's percentage of total PMAP volume. This percentage will be multiplied by 33% to get a weighted percentage because public program volume represents 33% of the combined MERC/PMAP formula (the other 67% of the distribution is determined by medical education). To determine the amount each teaching program within a given site will obtain, the ratio of adjusted clinical training costs within the program (the average cost for the provider type multiplied by the number of FTEs in the program) to the total adjusted clinical training costs for the training site (the sum of the adjusted clinical training costs for all programs using the site) will be computed. This ratio will be multiplied by the Fund dollars computed for this site. The result will be the Fund dollars for this program within this site. This process will determine the public program revenue component of the PMAP portion of the fund for each teaching program using each site, which will be added to the medical education component of the MERC/PMAP formula to determine the amount of the MERC/PMAP Fund each facility will receive.

How were the PMAP/PGAMC/MA/GA revenue estimates that are used in the PMAP distribution derived?

In the 1998-2000 MERC applications, sponsoring institutions were asked to provide information on total MA/GA/PMAP/PGAMC revenue received by each clinical training site at which trainees were placed; the plan was to use these estimates to calculate the distribution of carved out funds. After examining the data that was submitted through MERC applications, however, it became clear that these self-reported estimates were not sufficiently reliable for use in calculating the distribution. There was a great deal of variation in how sites reported their public program volume, with many sites reporting revenue for a larger affiliated site or network, reporting charges rather than net revenue or including MNCare enrollees in their estimates. Additionally, many smaller sites lacked either the staff time or the accounting systems required to calculate reliable estimates, resulting in a high percentage of sites with no reported public program volume. Using the self-reported estimates, these sites would have been ineligible for grants.

Due to these problems with the submitted public program volume data, MDH staff determined that a more equitable way of distributing carved out funds would be to use fee-for-service payment data and encounter data from the Department of Human Services to calculate an estimate of public program volume at each training site. MERC staff provide DHS with the Medicaid provider numbers supplied by MERC applicants for each clinical training site, and DHS returns a figure for each provider number that includes the actual payments made to each site by DHS for fee-for-service MA/GA clients and a proxy figure for PMAP/PGAMC clients based on reported encounters at each site and the amount that DHS 'would have paid' for each encounter had it been a FFS claim. Finally, MERC staff work with sponsoring institutions to reconcile large disparities and ensure that each site understands and approves of the methodology used by DHS.

In the future, as the Department of Human Services' encounter data system continues to expand and improve, MDH will no longer include fee-for-service MA/GA payments in the measure of each site's public program volume and will calculate the distribution based solely on relative PMAP/PGAMC volume at each training site. Until such a time as the Commissioner of Health determines that these data are complete enough to stand alone as a proxy for public program volume, however, fee-for-service payments will continue to be included in the calculation.

Is a training site with no public program revenue eligible for the PMAP distribution?

No. Training sites with no public program revenue are not eligible to receive PMAP funds. The distribution of PMAP/PGAMC medical education dollars is based on a simple additive formula that equally weighs clinical training costs and public program revenue. A training site that has no public program revenue, however, is by statute ineligible for the PMAP carve out. A training site with no public program revenue will receive a grant from the MERC Fund, but will not receive a grant from the PMAP medical education dollars.

Updated Tuesday, November 16, 2010 at 12:25PM