TEACHING HOSPITALS: Fear MedPAC’s Revision Efforts
The Medicare Payment Advisory Commission (MedPAC) advised Congress last week to combine direct and indirect medical education reimbursements to teaching hospitals, alleging a single-payment method "better accounts for the higher costs of the enhanced patient care those hospitals provide to Medicare beneficiaries," Modern Healthcare reports. Currently, Medicare pays teaching hospitals separately for their direct costs of training physicians and their indirect costs of overseeing medical education, including overseeing the programs and treating complex cases. In FY 1998 "Medicare paid teaching hospitals $2.2 billion for the direct costs of teaching and $3.9 billion for the indirect costs." The report notes, "The distinction between direct and indirect costs is an accounting artifact that should not continue to guide Medicare's payments to teaching hospitals or other providers," adding that direct reimbursement should be considered part of patient care, not medical training. However, the Association of American Medical Colleges said the report "sends a very troubling message to Congress and our nation's teaching hospitals," as combining the payments may make it easier for them to come under the budget ax in the future (Hallam, 8/9 issue). AAMC stated, "The AAMC and other health care organizations are concerned about the adverse, long-term effect that fundamental changes to the calculation of the direct [graduate medical education] costs would have on teaching hospitals" (AAMC release, 8/9). Whether the policy change would result in decreased GME reimbursements overall remains unclear (Hallam, 8/9).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.