Urban lawmakers concerned with hospital payment proposal

Urban lawmakers — particularly those from New York and New Jersey — are raising concerns about a new proposal to link teaching hospitals' Medicare payments with medical education standards. The 17-member Medicare Payment Advisory Commission (MedPAC) in their June report to Congress unanimously endorsed a proposal to make $3.5 billion in annual funds contingent on hospitals meeting new educational standards that would be developed over the next three years, but lawmakers balked at the proposal during an Energy and Commerce health subcommittee hearing Wednesday.

"I have concerns and questions that need to be answered," panel chairman Frank Pallone Jr. (D-N.J.) said in prepared remarks. "For example, what would the impact of your recommendations on [Graduate Medical Education] be on the teaching hospitals that rely heavily on these funds? Can hospitals that operate on very slim margins or in the red, like those in my state of New Jersey, continue to operate and provide the same level of services if they begin to lose GME funding?"

Rep. Anthony Weiner (D-N.Y.) put it more bluntly, accusing MedPAC of "bias" against teaching hospitals. He said the new report reinforces the notion that the group of healthcare experts suffers from "tone-deafness on some of these issues."

"You don't get it when it comes to teaching hospitals," he said.

MedPAC Chairman Glenn Hackbarth, the sole witness at Wednesday's hearing, pushed back by saying the commission's goal is to promote new educational standards, not cut payments to hospitals. He said teaching hospitals fall short in terms of teaching students how to coordinate care and get the best quality outcomes for patients, and that new standards need to be developed.

"Our hope is that we get new standards that are satisfactory to the secretary [of Health and Human Services] and then people meet them and we pay out all the money," Hackbarth told The Hill. "This really isn't trying to pry dollars out of them, it's trying to influence the shape of Graduate Medical Education."

A number of program directors in internal medicine and other educators, he added, think using Medicare payments to hold teaching hospitals accountable for their students' educational performance is the most sure way to get those results.

"There's always resistance to change," he said, "and [these educators] see Medicare as the catalyst for moving in the direction they know GME needs to go."

He added that the funding proposal would only kick in three years from now, at which point teaching hospitals would already be benefitting from provisions in the healthcare reform law.

"We're saying three years from now," he said. "The other thing that happens three years from now is moving toward universal coverage, so teaching hospitals [that say they currently lose money on treating the uninsured] will be getting a big influx of dollars through health reform at that three-year window."