Teaching hospitals last week joined the party of providers who have convinced some members of Congress that they need relief from the Medicare cuts spelled out in the Balanced Budget Act of 1997.
Sen. Daniel Patrick Moynihan (D-N.Y.), the ranking member of the powerful Senate Finance Committee, introduced three pieces of legislation designed to shield teaching hospitals from some of the cuts.
The first proposal, which has garnered support from 14 other senators, would freeze the current schedule of reductions at the level of the indirect portion of graduate medical education funding.
The payment adjuster used to determine indirect funding would stay at the 1999 level, returning about $3 billion to teaching hospital coffers over the next five years.
Medicare paid just under $4 billion in indirect medical education costs last year.
"We are delighted with this legislation," said Dick Knapp, executive vice president of the Association of American Medical Colleges, which represents 125 teaching hospitals. "We are endorsing it and encouraging our members to be very supportive."
New money would be needed to offset the lost savings to Medicare, Knapp said. It is not clear how Moynihan plans to fund the bill.
The second proposal aims to redirect more than $2.5 billion from Medicare managed-care payments to hospitals in disproportionate-share payments. The latter go to hospitals that care for a very large number of indigent patients. Last year Medicare paid $4.6 billion to the 1,900 hospitals that qualify for disproportionate-share money.
About 66% of all disproportionate share funding goes to teaching hospitals, Knapp said.
"Managed-care plans often do not contract with (disproportionate-share) hospitals, and when they do, the negotiated payment rates often do not include these (extra disproportionate-share) payments," Moynihan said in a written statement.
The third proposal would carve out more funds from Medicare managed-care rates to pay for the training of nurses and other health professionals. Medicare managed-care payments already include a carve-out for GME funding for physicians.
The bills face stiff competition from other special interest legislation, not to mention from the managed-care crowd, which is sure to oppose the carve-outs prescribed by Moynihan.
"We're going to press our case until the end of the year," Knapp said. "We have no idea how much money is available, but it's likely that it's limited, and there is some competition for various kinds of relief (from the 1997 budget law)."