America's Health Care Providers
and Patient Groups Supporting BBA Relief for Teaching Hospitals
November 3, 1999
The Honorable Trent Lott
Majority Leader
United States Senate
S-208 Capitol
Washington, D.C. 20510
Dear Mr. Leader:
We, the undersigned organizations, write to request your
support for providing relief from the Balanced Budget Act
of 1997 (BBA) to teaching hospitals. Specifically, we ask
you to accept provisions included in BBA relief legislation
adopted by the Senate Finance Committee which freeze the reductions
in special payments to teaching hospitals - the Medicare Indirect
Medical Education (IME) payment.
As you know, the BBA contains some of the most significant
changes for teaching hospitals since the beginning of Medicare.
Chief among the BBA's changes include a 29% reduction in Medicare
IME payments over four years. A payment specific to teaching
hospitals, the IME adjustment carries a "medical education"
label reimbursing teaching hospitals for the higher costs
associated with physician training, but its purpose is much
broader:
This adjustment is provided in light of doubts...about the
ability of the DRG case classification system to account fully
for factors such as severity of illness of patients requiring
the specialized services and treatment programs provided by
teaching institutions and the additional costs associated
with the teaching of residents.…The adjustment for indirect
medical education costs is only a proxy to account for a number
of factors which may legitimately increase costs in teaching
hospitals (House Ways and Means Committee Rept, No. 98-25,
March 4, 1983 and Senate Finance Committee Rept, No. 98-23,
March 11, 1983).
We are concerned that the BBA's reductions to Medicare's
IME and other general hospital payments, combined with current
market place phenomena, are causing an immediate financial
crisis at many teaching hospitals across the country. Hospital
financial performance margin analyses have concluded that
the BBA may reduce teaching hospitals' total margins to zero
or below. Many teaching hospitals have already reduced their
work forces due to their dire financial circumstances; others
are in the process of planning to reduce personnel. What's
more, teaching hospitals in every region of the nation are
now considering scaling back such key community services as
poison control centers, hospital services for the uninsured,
clinical research activities and education and training for
medical students and residents.
Left unchecked, the BBA's Medicare cuts to teaching hospitals
could force some of the nation's teaching hospitals to reduce
the scope of their special and unique community services.
As teaching hospitals have the additional roles of providing
clinical education for all types of health professionals,
an environment in which clinical research can flourish, and
highly specialized patient care, the BBA's payment reductions
could prevent teaching hospitals from being able to support
these missions, perhaps preventing the sickest from being
cared for and the newest and most advanced services and equipment
from being brought to the bedside.
The Senate IME provisions in "Medicare, Medicaid, and
S-CHIP Adjustment Act of 1999" would go a long way in
ameliorating some of the BBA's disproportionate cuts to teaching
hospitals and is an important first step. We thank you for
your leadership to refine the BBA and look forward to working
with you to ensure that America's teaching hospitals will
be able to continue to carry out their unique societal roles
to train our nation's future health care professionals, sustain
the environment essential for research advances and cutting
edge care, maintain key standby and special services, and
provide care for the uninsured.
We appreciate the opportunity to provide our views as you
deliberate on this complex and important issue.
Sincerely,
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American Academy of Facial Plastic and Reconstructive
Surgery American Academy of Family Physicians
American Academy of Otolaryngology-Head and Neck Surgery,
Inc.
American Academy of Ophthalmology
American Academy of Pediatrics
American Association of Colleges of Osteopathic Medicine
American Association of Colleges of Podiatric Medicine
American Association of Dental Schools
American Association of Neurological Surgeons
American Association of Orthopaedic Surgeons
American College of Cardiology
American College of Emergency Physicians
American College of Obstetricians and Gynecologists
American College of Osteopathic Surgeons
American College of Physicians- American Society of
Internal Medicine
American College of Surgeons
American Geriatrics Society
American Hospital Association
American Medical Group Association
American Osteopathic Healthcare Association
American Pediatric Society
American Psychiatric Association
American Society for Gastrointestinal Endoscopy
American Society of Anesthesiologists
American Society of Hematology
American Society of Nephrology
American Society of Transplantation
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American Urogynecologic Society
Association of Academic Health Centers
Association of American Medical Colleges
Association of American Universities
Association of Departments of Family Medicine
Association of Family Practice Residency Directors
Association of Hospital Medical Education
Association of Medical School Pediatric Department Chairs
Association of Osteopathic Directors and Medical Educators
Association of Professors of Medicine
Association of Program Directors in Surgery
Association of Subspecialty Professors
College of American Pathologists
Congress of Neurological Surgeons
Federation of American Health Systems
Medical Group Management Association
National Association of Children's Hospitals
National Association of Public Hospitals and Health
Systems
National Health Council
Premier
Society of Critical Care Medicine
Society of Gynecologic Oncologists
Society of Maternal-Fetal Medicine
Society for Pediatric Research
Society of Teachers of Family Medicine
VHA Inc.
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