April 13, 2001
Senator Reed Introduces Medical Education Trust Fund Legislation
Sen. Jack Reed (D-R.I.) April 6 introduced S. 743, legislation to establish a Medical Education Trust fund to support medical schools and teachings hospitals. The bill is modeled after legislation introduced by Sen. Daniel Patrick Moynihan in 1999. 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. Reed said that these institutions "deserve explicit and dedicated funding to guarantee that the United States continues to lead the world in the quality of its medical education and its health care delivery system."
The legislation requires Medicare, Medicaid, and private payers -- through a 1.5 percent assessment of all health insurance premiums -- to pay into the fund. 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 2002; $300 billion in FY 2003; $400 billion in FY 2004; $500 million in FY 2005 and $600 million in FY 2006. 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. Reed, AAMC President Jordan Cohen, M.D., thanked the Senator for his "willingness to take up issues of importance to academic medicine." Dr. Cohen said that the conceptual framework of the legislation is "in agreement with the Association's policies and positions calling for the development of shared 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 encouraged to write to their senators requesting their cosponsorship of S. 743.
Information: Lynne L. Davis, AAMC Office of Governmental Relations, 202-828-0526.
