The president’s budget includes a $16.3 billion reduction in Medicare Indirect Medical Education (IME) payments, seen in previous budget requests from the administration, a new proposal to equalize Medicare rates for services provided in off-campus hospital outpatient departments (HOPD) and other provider settings totaling $29.5 billion in savings, and a reduction of Medicare bad debt reimbursement from 65 percent to 25 percent saving $31.1 billion over ten years.
Sen. Charles Schumer (D-N.Y) expressed his disagreement with the proposed cuts to graduate medical education (GME) stating, “I oppose the administration strongly and vehemently, and I can’t even understand your logic here.” Sen. Schumer then noted the administration’s recognition of the national physician shortage adding, “Your budget proposal recognizes we have a physician shortage, and we do if we’re going to insure more people, we need physicians. That’s one of the places where the ACA didn’t really do the job in terms of filling the gap of new physicians that we need and it sort of adds insult to injury to now cut the payment to teaching hospitals. They’re not going to teach as many medical students and make them become doctors if you’re going to cut this.”
Secretary Burwell said the administration is focusing on investing in additional workforce training programs, responding, “We are trying to make sure we balance the needs, and our proposal also targets funding and additional funding for those that go into primary care and specialties where we have shortages.”
Sen. Schumer rebutted, “I think you’re robbing Peter to pay Paul. I certainly believe in the programs you mention. They’ve been around for a while, they haven’t filled our need, and what we’ve proposed, a bunch of us, and it’s bipartisan support, is that we increase the number of slots and we allocate half of that increase to primary care and it seems to me a much better and tested way to go than relying on these new programs who have never filled the gap.”
Senate Finance Committee Chair Orrin Hatch (R-Utah), opened the hearing praising Secretary Burwell for her responsiveness since being confirmed last year and added, “I hope that we can work together in the coming months on both Affordable Care Act and entitlement issues to create solutions that work for all Americans. Finally, I just want to note that while there is much in the President's budget that I disagree with, there are areas where I think we can find common ground.”
In her opening testimony Secretary Burwell outlined the focus of the budget stating it “builds on savings and reforms in the ACA with additional measures to strengthen Medicare and Medicaid, and to continue the historic slow-down in health care cost growth. Medicare proposals in our Budget, for example, more closely align payments with the costs of providing care, encourage health care providers to deliver better care and better outcomes for their patients, improve access to care, and create incentives for beneficiaries to seek high-value services.”
During his remarks, Sen. Robert Menendez (D-N.J.) reviewed last year’s extension of the “Two-Midnights rule,” delay signed into law by the president as part of the sustainable growth rate (SGR) patch. He asked Secretary Burwell to inform the committee about what CMS has done for the hospital’s physicians and Medicare recovery contractors once the delay is lifted. Sec. Burwell said, “the issue of medical judgment which is one that has been raised with us in terms of the problems around that rule, that's something we'd like to have a conversation with.”
Sen. Rob Portman (R-Ohio) echoed his colleague’s concerns adding, “we got to come up with a common-sense way to address hospital inpatient and observation stays…so I hope you work with us on that.”