Senator
Moynihan Reintroduces Medical Education Trust Fund
Legislation
Sen. Daniel Patrick Moynihan (D-NY) Jan. 19 reintroduced S. 210,
legislation to establish a Medical Education Trust fund to support
medical schools and teachings hospitals. Sen. Moynihan introduced
similar legislation in 1997. Recognizing that all sectors of the health
care system should share the responsibility to fund graduate medical
education, the bill requires Medicare, Medicaid, and the private sector
to contribute to a trust fund to support medical education.
Calling medical schools and teaching hospitals "national treasures,"
Sen. Moynihan said that "the fiscal pressures of a competitive health
market are increasingly closing off traditional implicit revenues
sources that have supported medical schools, graduate medical education
and research." The legislation provides "explicit and direct funding" to
medical and teaching hospitals by requiring Medicare, Medicaid, and
private payers-- through a 1.5 percent assessment of all health
insurance premiums--to pay into the fund. The 1.5 percent tax on health
insurance premiums would raise an estimated $5 billion a year. With
Medicare and Medicaid's contribution, $8 billion and $4 billion
respectively, the trust fund would provide average annual payments of
$17 billion.
Within the trust fund, five accounts would be created: the Medical
School Account; the Medicare Teaching Hospital Direct Account; the
Medicare Teaching Hospital Indirect Account; the Non-Medicare Teaching
Hospital Indirect Account; and the Non-Medicare Teaching Hospital Direct
Account. The Medical School Account would be funded from the other four
accounts at a specified level-- $200 million in FY 2000; $300 billion in
FY 2001; $400 billion in FY 2002; $500 million in FY 2003 and $600
million in FY 2004. Medical schools would apply to the account for money
to help assist in "maintaining and developing quality educational
programs." Funding would be allocated based on an interim payment
designed by the Secretary of Health and Human Services.
Teaching hospitals would also apply to the Secretary of Health and
Human Services for funds related to direct and indirect costs of
graduate medical education. Payments to teaching hospitals from the
Medicare accounts would be based on Medicare's current formula for
direct and indirect graduate medical education payments. Payments to
teaching hospitals from the Non-Medicare accounts would use Medicare's
same formula for determining direct and indirect graduate medical
education payments, but would substitute the hospitals' Medicare volume
with the hospital's non-Medicare volume.
The bill also establishes a Medical Education Advisory Commission to
study and report to Congress on operations of the Medical Education
Trust Fund; alternative and additional sources of medical education
funding; alternative methodologies for financing graduate medical
education; the role of medical schools in graduate medical education;
and policies designed to expand eligibility for graduate medical
education payments to children's hospitals that operate graduate medical
education programs.
In a letter to Sen. Moynihan, AAMC President Jordan Cohen, M.D.,
congratulated the senator for his "continued and unwavering support for
American's medical schools and teaching hospitals." Dr. Cohen said that
the conceptual framework of the legislation is "in substantial accord
with the Association's policies and positions calling for the
development of share responsibility funds to support the costs of
undergraduate and graduate medical education." As the legislation has
the formal support of the AAMC,
AAMC members are encourage to write to their senators requesting
their cosponsorship of S. 210.
Information: Lynne L. Davis,
AAMC Office of Governmental Relations, 202-828-0526.