U.S. House of Representatives Graduate Medical Education (GME) and Disporportionate Share Hospitals (DSH) Letter to the National Bipartisan Commission on the Future of Medicare

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Congress of the United States

House of Representatives

Washington, DC 20515

Dear Commissioner:

As the Bipartisan Commission on the Future of Medicare considers recommendations to assure the long-term solvency and viability of the Medicare program, 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 (the most substantial part of GME) funding and DSH funding from the Medicare Trust Fund while turning them into domestic discretionary accounts, and changing the formula for Indirect Medical Education (a smaller part of GME) funding.

We urge you to maintain current Medicare policy on funding of GME and DSH. Since two-thirds 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 preeminent 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 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 federal commitment and which would shift support that should properly be a Medicare responsibility to general revenues.

We urge you to recommend continuation of the current financing arrangement. As this letter demonstrates, teaching hospitals have broad support in the House. 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 and DSH.

Thank you for your attention to this important matter.

Sincerely,

List of Members in order of signature: