Schumer: Medicare Rule That Would Have Drastically Reduced Funding For Education And Training Of Physicians In New York Will Not Be Implemented

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Schumer: Medicare Rule That Would Have Drastically Reduced Funding For Education And Training Of Physicians In New York Will Not Be Implemented

Schumer Successfully Led Effort to Reverse Payment Policy Implemented By Last Administration That Would Have Cut-in-Half Medicare Payments To Teaching Hospitals, Costing Upstate New York Hospitals Millions; Schumer Already Secured One Year Delay

Rule Would have Gone Into Effect In October; Reversal Was Top Priority for Hospitals Across Upstate New York - Would Have Made It Much More Difficult to Train New Doctors

New Report Details Savings to Individual Hospitals Across Upstate New York - 31 Hospitals In Capital Region, Southern Tier, Western New York, Rochester-Finger Lakes, Central New York, Hudson Valley and North Country Faced Cuts

With cash strapped Upstate New York teaching hospitals struggling to prevent mass layoffs and serve rising numbers of patients, U.S. Senator Charles E. Schumer today announced that he successfully lead a bipartisan effort with over 50 Senators to reverse a regulation that would have cut Medicare capital payments in half to teaching hospitals in Upstate New York and across the country. Reversing the payment policy, which was scheduled to go into effect on October 1, 2009, will save hospitals across Upstate New York more than $9 million over the next fiscal year. The proposed policy would have cut Medicare capital indirect medical education (IME) by 50 percent. These payments provide additional support for teaching hospitals that have higher capital costs than non-teaching hospitals. Schumer said that stopping this policy before it starts will help New York because it will ensure that hospitals continue to receive essential capital dollars to train the next generation of doctors and nurses in Upstate New York. A provision authored by Schumer was included in the American Recovery and Reinvestment Act and delayed implementation of this policy change for one year. Without that provision in the law, the regulation would have retroactively gone into effect on October 1st, 2008. The administration has now announced that the cut will not be implemented. The official notification was released late Friday night and the Rule will be published in the August 27, 2009 Federal Register.

Schumer said supporting teacher's hospitals is vital for New York State. Not only is there a persistent shortage of certain types of physicians across the state, but as our nation works to increase the number of insured citizens, an increasing number of doctors will be necessary. Schumer said cutting funding for doctors' education at this stage is not only unhelpful, it is counterproductive. New York's teaching hospitals train more than 16,000 medical and surgical residents every year-fully 17% of all physicians trained in the United States. No other place in the world trains more doctors in more specialties, and three out of every four doctors practicing in New York also trained here.

The regulation reversal has widespread support, with over half of the nation's Senators signing on to Schumer's letter. Senator Pat Roberts (R-KS) joined Schumer in leading the fight against the proposed Medicare hospital capital IME payment change. Schumer authored a letter to the administration that was signed by 50 Senators objecting to the rule change, and personally called the Secretary of Health and Human Services, Kathleen Sibelius.

"Teaching hospitals are vital in New York, not only because of the tremendously talented physicians they produce or the high level of care they provide patients, but also because of the good-paying, high-quality jobs these little economic engines create in our communities. These cuts would have been a punch in the gut to hospitals in Upstate New York, at a time of particular financial difficulty. Preventing cuts in these payments before they start is a major victory for New York, and will allow New York State to stay at the cutting edge of medical education." Schumer said.

In 2008, the Centers for Medicare and Medicaid Services (CMS) finalized a proposal in the Inpatient Hospital Prospective Payment System Rule that eliminated the Medicare capital indirect medical education (IME) adjustment in the inpatient hospital setting over a two year period beginning October 1, 2008. In February of 2009, a Schumer-authored provision included in the American Reinvestment and Recovery Act pushed back the implementation date of this rule to October 1st 2009, and required the federal government to reimburse teaching hospitals for lost revenues for the months the rule had been in effect (October 2008 - February 2009). Full elimination of Medicare capital IME payments would have meant a cut of $58 million a year for New York hospitals.

Teaching hospitals, because of their mission of training physicians, have higher capital costs than nonteaching hospitals. For example, teaching hospitals must have extra technical equipment and sophisticated classroom space available to train doctors and other health professionals. As in the other payment systems for hospitals, the capital IME adjustment recognizes that teaching hospitals must meet the demands of treating sicker patients, as well as meeting the financial demands of operating emergency and trauma care, providing highly specialized services, and treating a significant proportion of uninsured patients. This new payment policy, which is scheduled to go into effect on October 1st 2009, eliminates the funding to support the capital costs of teaching and undermines the critical missions that teaching hospitals fulfill within their communities.

Schumer, a member of the Senate Finance committee that has jurisdiction over Medicare, was able to secure a provision as part of the economic stimulus package that reversed the rule and not only retroactively paid back any lost payments during the four months the rule was in place, but also reinstates the payments going forward for one year. Chairman Charles Rangel authored the identical provision in the House of Representatives. Schumer then successfully lead the charge to prevent the regulation from being implemented this October.

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