National Bipartisan Commission on the Future of Medicare
Current Status as of August 27, 1999
Missing its March 1 reporting deadline, the National Bipartisan
Commission on the Future of Medicare voted March 16 on a premium-based
Medicare reform plan which includes changes to the way Graduate Medical
Education (GME) is financed. The plan, offered by Sen. John Breaux (D-La.)
and Rep. Bill Thomas (R-Calif.) received 10 of the super-majority 11 votes
(out of 17) needed for the commission to make recommendations to President
Clinton and the Congress. The commission has since disbanded without a
report issued to the Congress and President Clinton. However, both Sen.
Breaux and Rep. Thomas have indicated that they intend to use the
commission document as a basis for introducing Medicare reform
legislation.
Summary
The Breaux-Thomas proposal includes moving Medicare to a premium-based
support model; modernizing Medicare FFS; reforming Medigap; reforming GME;
expanding the benefits package to include a modest outpatient prescription
drug package; raising the eligibility age from 65 to 67; and extending
beyond FY 2002 provider payment reductions mandated by the Balanced Budget
Act (BBA) of 1997.
Under a premium-based support model, private plans would submit their
plan and premiums for approval to a Medicare Board in order to compete
with one another and with traditional Medicare fee-for-service. The
Breaux/ Thomas plan specifically states that submitted premiums from the
government-run FFS or private plans would not include calculations of "all
non-insurance functions and special payments now in Medicare."
The Breaux/Thomas plan offers the following statements as to how
special payments like GME and DSH would be financed:
- "Congress should examine all non-insurance functions, special
payments and subsidies to determine whether they should be funded
through the Trust fund [newly combined A and B Medicare trust fund] or
from another source."
- "Payments for Direct Medical Education (DME) would be financed and
distributed independent of a Medicare premium support system. Since the
Part A and Part B trust funds would be combined and the traditionally
separate funding sources of payroll taxes and general revenues would be
blurred, Congress should provide a separate mechanism for continued
funding through either a mandatory entitlement or multi-year
discretionary appropriation program."
- "On the other hand, Indirect Medical Education (IME) presents a
unique problem since it is difficult to identify the actual statistical
difference in costs between teaching and non-teaching hospitals.
Therefore, for now Congress should continue to fund IME from the Trust
Fund as an adjustment to hospital payments premium-based comprehensive
reform proposal includes important changes to the financing of GME."
The Breaux-Thomas proposal does not specifically mention DSH; however,
the accompanying staff cost estimate of the Breaux-Thomas proposal
suggests funding DSH and IME outside of the Medicare program.
Although the Breaux/Thomas plan did not receive enough votes for formal
recommendations to the President and Congress, both Breaux and Thomas have
indicated that they will prepare legislation. Overall, the full commission
met eleven times. In addition, the commission's three task forces and
study group on GME met throughout the year. The study group on GME,
chaired by Sen. Bill Frist, (R-Tenn.), met five times-- Aug. 11, Sept. 14,
22, 29 and Oct. 6, 1998.
Congress created the Bipartisan Commission in the Balanced Budget Act
of 1997. It was charged with reviewing and analyzing the long-term
financial condition of the Medicare program and will "make recommendations
regarding the financing of GME, including consideration of alternative
broad-based sources of funding for such education and funding for
institutions, not currently eligible for such GME support, that conduct
approved graduate medical residency program, such as children's
hospitals." (Sect. 4021 (b)(8).
The commission consisted of 17 members and two chairmen who were
appointed by the President, the Senate Majority Leader and the Speaker of
the House, with input from the minority leadership. The commission is
divided into three task forces and a study group on GME, chaired by Sen.
Frist.
Congressional Action
In response to an early commission proposal to move GME and DSH from
Medicare to the appropriations process, a number of Senators and Members
of Congress wrote to the commission to express their concern. On Feb. 12,
Sens. Daniel Patrick Moynihan (D-N.Y.), Edward (D-Mass.), and 53 other
Senators sent a letter on GME and DSH payments to commission. On Feb. 22,
Reps. Edward Markey (D-Mass.), Peter King (R-N.Y.), Richard Neal
(D-Mass.), Jack Quinn (R-N.Y.) and 128 other Members of Congress sent a
similar GME and DSH letter. The letters urge the commission to maintain
Medicare's commitment to funding GME and DSH and "oppose efforts to
subject GME and DSH to an annual appropriations process."
AAMC Action
The AAMC has a special interest in the commission's work because of its
potential impact on current GME policies and is attending all commission
meetings. The AAMC is working actively to educate all commissioners and
commission staff about the importance of Medicare's contribution to GME.
On September 15, AAMC President Jordan Cohen, M.D. testified before the
commission's GME study group on the importance of retaining the
entitlement nature of Medicare GME financing instead of an appropriations
process. Dr. Cohen also addressed three other GME-related issues that the
commission has been debating: whether an entitlement structure should be
limited or unlimited; what methods exist for improving accountability by
teaching institutions and oversight by the federal government; and whether
federal funding should "follow the resident," such as in some form of a
voucher system.
The AAMC closely monitored the year-long work of the now disbanded
National Bipartisan Commission on the Future of Medicare. The AAMC has a
special interest in the commission's work because of its potential impact
on current GME policies. All commission and task force meetings were
attended by the AAMC. In addition, the AAMC worked actively to educate all
commissioners and commission staff about the importance of Medicare's
contribution to GME.
On September 15, 1998, AAMC President Jordan Cohen, M.D. testified
before the commission's GME study group on the importance of retaining the
entitlement nature of Medicare GME financing instead of an appropriations
process. Dr. Cohen also addressed three other GME-related issues that the
commission has been debating: whether an entitlement structure should be
limited or unlimited; what methods exist for improving accountability by
teaching institutions and oversight by the federal government; and whether
federal funding should "follow the resident," such as in some form of a
voucher system.
On Feb. 19, the AAMC, along with over 60 health care providers, sent a
letter to members of the commission on GME. The letter expresses its
opposition to removing direct graduate medical education payments from
Medicare to the appropriations process.
Contacts
For more information contact Paul
Bonta or Lynne L. Davis, AAMC
Office of Government Relations, 202-828-0526. | 
