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AAMC Proposes Using Insurance Providers Fee to Expand GME Support

June 7, 2013—AAMC June 3 submitted comments to the Internal Revenue Service (IRS) on a proposed rule to implement Section 9010 of the Affordable Care Act (ACA, P.L. 111-148 and P.L. 111-152), which imposes an annual health insurance providers fee.  The comments encourage the IRS to carefully consider the long-term policy implications associated with reshaping the health insurance market, including a potential impact on funding for graduate medical education (GME). AAMC also commented on how educational institutions that provide students with access to health insurance should be treated under the rule.

The AAMC letter emphasizes the vital importance of protecting current Medicare support for GME at a level consistent with the program’s congressionally mandated obligation.  AAMC also encourages the agencies responsible for ACA implementation to consider how other payers might also contribute to the financing of GME. 

For example, the letter suggests that agencies could set aside a guaranteed level of funding from the proposed providers fee as an additional source for GME funding.   Alternatively, the amount issuers compensate for GME through negotiated hospital rates could be subtracted from their aggregate income, which is used to determine the providers fee.

The AAMC letter also agrees with the IRS that educational institutions providing students with access to health insurance should not be subject to the provider fee when student premiums are used to purchase health insurance from a separate unrelated issuer.  Additionally, AAMC agrees that if educational institutions periodically charge student administrative health fees to help cover the cost of student health clinical operations and care delivery, these arrangements do not constitute health insurance that would fall under the providers fee.  The AAMC letter encourages the IRS to include these clarifications in the final rule.


Christiane Mitchell
Senior Director Health Care Affairs
Telephone: 202-828-0461

Allison M. Cohen, J.D., LL.M.
Senior Policy and Regulatory Specialist
Telephone: 202-862-6085



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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806