New Mexico Uses Medicaid Funding to Bolster Primary Care

September 01, 2015 03:00 pm Michael Laff

In response to a critical shortage of primary care physicians, New Mexico has become the first state( to use Medicaid waivers in tandem with federally qualified health centers (FQHCs) to create more primary care residency positions. The move represents a novel solution to the dual problems of federal graduate medical education (GME) funding restrictions and teaching hospitals' focus on subspecialties that, taken together, limit the number of family medicine residency positions available.

Resident Erin Corriveau, M.D., (center) discusses patient care with colleagues at the University of New Mexico Health Sciences Center. New Mexico is using a Medicaid waiver to expand the number of primary care residency slots and improve access to care in rural areas of the state.

A provision in the Social Security Act created the Section 1115 Medicaid waiver program(, which allows states to use Medicaid funding to expand coverage to low-income patients or expand access in areas that are not adequately served through existing programs.

The New Mexico legislature used a Section 1115 waiver in 2014 to help the state's four family medicine residencies join together as the New Mexico Primary Care Training Consortium.( The program provides increased Medicaid funding per patient visit for FQHCs that successfully apply for an expanded scope of service with the intent of creating or expanding an existing primary care residency program or establishing resident rotation sites.

The FQHCs receive approximately $150,000 annually for each new residency position. The first group of residents to be funded through the initiative will begin in fall 2016.

"The biggest innovations (in GME funding) are coming at the state level because what they do locally does not depend on national funding, where gridlock reigns," said Arthur Kaufman, M.D., vice chancellor for community health and distinguished professor of family medicine at the University of New Mexico Health Sciences Center.

Story highlights
  • New Mexico is the first state to use Medicaid waivers together with federally qualified health centers to expand primary care residencies, according to one health policy expert.
  • The state also is planning to fund 10 additional primary care residency slots in four areas that have a demonstrated need.
  • Seventy percent of family medicine residents in New Mexico who train in a rural area go on to practice in a rural setting.

"Every state can do this," he said.

New Mexico also is planning to use a Medicaid waiver to fund 10 additional primary care residency slots in four areas with a demonstrated need. New Mexico has 96 recognized shortage areas, and 32 of the state's 33 counties have been identified as having a primary care shortage. A study conducted by New Mexico's Legislative Finance Committee estimated that the state has a deficit of more than 200 primary care health professionals today.

"There's a disconnect between the ratios of different specialty residents we're training and the ratios our communities actually need," Kaufman told AAFP News.

The new residency positions will be located in what Kaufman calls "large smaller" towns that have a community hospital. Some residents will begin their training in Albuquerque and then spend their second and third years in an underserved area such as Farmington or Shiprock, two adjoining communities in which a high percentage of Native Americans reside.

Kaufman said exposing residents to rural rotations and extended training outside metropolitan areas is crucial to addressing the primary care workforce shortage in those areas.

"In the current GME system, the driver is often the needs and capacity of the teaching hospital's specialty services," Kaufman said. "We're not just saying we need more primary care doctors. We're also basing it on an analysis of state needs. That is absolutely critical."

New Mexico's demographic profile as a "minority majority" state -- the population is 45 percent Hispanic, 10 percent Native American and 2 percent African-American -- makes it important to recruit physicians who fit in with the surrounding community. Physicians who themselves are members of ethnic minorities are five times as likely to see patients of the same ethnicity compared with Caucasian physicians.

To encourage graduates to remain in New Mexico and practice in underserved communities, the state legislature provided financial support to expand the University of New Mexico School of Medicine class from 75 to 103 -- specifically, by adding 28 students in a BA/MD program. These students are recruited from high schools in underserved communities. Approximately two-thirds are from underrepresented ethnic minorities, and two-thirds are from rural communities. The entire class composition now reflects the state's demographic profile.

Still, to keep medical school graduates in New Mexico and ensure they go into family medicine or primary care, the state needs enough residency slots to accommodate them. Kaufman cited research from the Robert Graham Center( for Policy Studies in Family Medicine and Primary Care that indicated 56 percent of medical residents practice within 100 miles of their training site once they complete their residency.

Rates of return are expected to be even higher from the FQHC training programs funded through the waiver. In New Mexico, 70 percent of family medicine residents who train in a rural area go on to practice in a rural setting.

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