The Health‑Related Institutions Formula Advisory Committee voted to approve recommendations that would phase inflationary increases across four major formulas and raise the graduate medical education (GME) rate to address unfunded outpatient training costs.

Committee chair Kristen Mace opened the virtual meeting and asked the Charge 1 working group lead, Maureen Hill, to present the team’s recommendations. Hill said the work group proposes a standardized inflationary adjustment across the I&O (IN-O), infrastructure and research enhancement formulas based on the average medical Consumer Price Index since 2019 — “slightly under 3%” — to be phased in over three biennia. She said the group “did recommend increasing the GME formula rate by 20% above [the] standardized inflationary adjustment” to reflect the time residents spend in outpatient settings and the associated unfunded costs, particularly in rural areas.

Melita Berger, who walked members through spreadsheet projections, told the committee the full targeted inflation scenario would exceed $4.0 billion statewide (about $790 million above current funding). Under the three‑biennium plan the committee reviewed, Berger said the committee would implement a staged increase that produces roughly a $445 million increase for the 2028–29 biennium over the 2026–27 base; the worksheet also separated enrollment growth and inflationary growth components.

Members questioned formula linkages, including how a dental clinic education increase tied to the I&O adjustment and statutory language in the General Appropriations Act (GAA) that can cap some institution‑level amounts. The committee also heard sustained discussion about potential federal changes to indirect cost (F&A) recovery, with members urging a “hold‑harmless” approach so research funding does not decline if federal policy reduces indirect cost recoveries. Members favored drafting a hold‑harmless bullet for the report and returning in January with more precise estimates once additional federal and Legislative Budget Board (LBB) data are available.

Thomas moved to approve the Charge 1 recommendation with the understanding the committee would review the draft report before finalization; Jenny Gomez Leon seconded. The motion passed by voice vote.

The committee directed staff to include the hold‑harmless language as a placeholder in the January draft report, refine numbers as federal guidance and institutional data arrive, and circulate the draft to members for review ahead of the January meeting.