U.S. Senate and Graduate Medical Education (GME) Disproportionate Share Hospital (DSH) Letter to the National Bipartisan Commission on the Future of Medicare

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United States Senate
Washington, DC 20510

Dear Chairman Breaux:

As the Bipartisan Commission on the Future of Medicare considers recommendations to assure the long-term solvency and viability of Medicare, one of the most important issues involves Medicare's payments to teaching hospitals for services to Medicare beneficiaries. We understand that the Commission is considering proposals that would put Graduate Medical Education (GME) and Disproportionate Share (DSH) funding under Medicare in jeopardy. These proposals include removing Direct Medical Education funding and DSH funding from the Medicare Trust Fund while turning them into domestic discretionary accounts, and changing the formula for Indirect Medical Education funding.

We urge you to maintain Medicare's commitment to funding GME and DSH. Since two-third of DSH funding goes to teaching hospitals, the two programs are closely related.

Teaching hospitals play a vitally important role in the nation's health care delivery system. In addition to the mission of patient care that all hospitals fulfill, teaching hospitals serve as the pre-eminent setting for the clinical education of physicians and other health professionals. Teaching hospitals also provide the environment in which clinical research and health services research can flourish. Because they offer highly specialized health care, teaching hospitals provide care for the most severely ill patients in our society. Access to the highly sophisticated care that teaching hospitals provide is especially important to senior citizens, because of their often complicated health problems. In light of the extra costs associated with fulfilling these missions, teaching hospitals are particularly vulnerable to private payment reductions and managed care. Medicare GME and DSH payments are indispensable for the continuing financial health of the nation's teaching hospitals.

GME and DSH payments are directly related to Medicare services and therefore belong in the Medicare Trust Fund. They represent Medicare's fair share of the cost of caring for senior citizens in these hospitals. They are just as appropriate an expense under Medicare as the higher Medicare payments made to hospitals in areas with higher wage costs.

In order to remain the world leader in graduate medical education, we must continue to maintain Medicare's strong commitment to the nation's teaching hospitals. We oppose efforts to subject GME and DSH programs to an annual appropriations process which would force them to compete against other important federal priorities, which could result in a reduction in the federal commitment, and which would shift support that should properly be a Medicare responsibility to general revenues.

Many of us wrote to the Commission on August 9, 1998 to express our strong support for continued funding of teaching hospitals through Medicare. This letter is to reiterate our concerns and express the seriousness with which we view this issue. We urge you to recommend continuation of the current financing arrangement. As this letter and the earlier letter demonstrate, teaching hospitals have broad support in the Senate. Most states have major medical centers, and the vast majority of Americans recognize their importance. A drastic restructuring of the GME and DSH payments under Medicare would create an unnecessary controversy that could undermine any consensus the Commission achieves in other areas. We hope that you will join us in protecting Medicare's critical role in the funding of GME.

Thank you for your attention to this important matter.

Sincerely,

Members signing the Moynihan/Kennedy GME/DSH letter

1. Moynihan
2. Kennedy
3. Wellstone
4. Harry Reid
5. Wyden
6. Helms
7. Lautenberg
8. Gordon Smith
9. Jack Reed
10. Specter
11. Mikulski
12. Schumer
13. Sarbanes
14. Inouye
15. Levin
16. Bingaman
17. Edwards Torricelli
18. John Kerry
19. Ashcroft
20. Patty Murray
21. Cleland
22. Dodd
23. Leahy
24. Biden
25. Chafee
26. Feinstein
27. Dorgan
28. Durbin
29. Boxer
30. Snowe
31. Bond
32. Johnson
33. Lincoln
34. Akaka
35. Lieberman
36. Mack
37. Thurmond
38. Conrad
39. Baucus
40. Collins
41. Hollings
42. Bob Graham
43. McConnell
44. Jeffords
45. Landrieu
46. Gregg
47. Stevens
48. Byrd
49. Roberts
50. Slade Gorton
51. Murkowski
52. Tim Hutchinson
53. Bennett
54. Bayh