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AAMC Sends Letter to MedPAC Regarding Recommendation on the IME Adjustment

April 23, 2021

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CONTACTS
Brad Cunningham, Sr. Regulatory Analyst, Graduate Medical Education

The AAMC sent a letter on April 21 to Michael Chernew, PhD, chair of the Medicare Payment Advisory Committee (MedPAC), in response to MedPAC’s approval April 2 for a recommendation that “Congress should require CMS to transition to empirically justified indirect medical education adjustments to both the inpatient and outpatient Medicare payments” [refer to Washington Highlights, April 2].The letter opposed changes to the current inpatient IME adjustment, but supported the creation of an outpatient IME payment.

Because the recommendation would hold total IME payments at their current level, the addition of an outpatient IME adjustment would require a reduction in the inpatient IME adjustment.  If Congress were to accept MedPAC’s recommendation, according to staff analyses there would be redistributive effects, including for teaching hospitals that also receive disproportionate share hospital payments; these hospitals would face the largest IME adjustment reductions.

The letter offered the AAMC’s support for the creation of an outpatient IME adjustment in recognition of teaching hospitals’ Medicare underpayments in the outpatient setting. The letter also expressed opposition to changes in the current inpatient IME adjustment, and stated that an outpatient IME adjustment should be created with additional money, not by reducing the inpatient IME.

More details on the proposal are expected in MedPAC’s June report.

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