[Congressional Record Volume 154, Number 43 (Thursday, March 13, 2008)]
[Senate]
[Pages S2157-S2159]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

       By Ms. STABENOW (for herself and Mr. Bunning):
  S. 2781. A bill to amend title XVIII of the Social Security Act to 
increase the per resident payment floor for direct graduate medical 
education payments under the Medicare program; to the Committee on 
Finance.
   Ms. STABENOW. Mr. President, I wish to discuss a critical 
infrastructure issue facing our Nation. As our population ages, we will 
need more health care professionals. We are already seeing shortages in 
critical areas such as nursing.
   The Council on Graduate Medical Education, COGME, has also strongly 
advised that we need to train more physicians. COGME recommends that 
the number of physicians entering residency programs increase by 3,000 
over the next 10 years to partially remedy an anticipated shortfall of 
85,000 physicians by 2020.
   Yet for many of my teaching hospitals, there is a problem in how 
they are reimbursed through the Medicare Program for training the next 
generation of doctors. Their ``graduate medical education'' 
reimbursement GME, is based on data collected over 30 years ago that no 
longer reflects current costs and increasing needs. Over 30 Michigan 
teaching hospitals lose more than $18 million a year as a result of 
Medicare's outdated policy. Insufficient funding makes it very 
difficult for hospitals to train a workforce sufficient to care for the 
growing Medicare population.
   Congress has recognized that this formula has caused unfairness in 
GME payments. In 1999, Congress set a minimum payment level at 70 
percent of the national average, and in 2000, Congress raised the 
minimum payment level again to 85 percent of the national average.
   The bill I am introducing today with my colleague, Senator Bunning, 
merely raises the  floor again to 100 percent of the national average 
over a 3-year period. Teaching hospitals could use the additional money 
to make up shortfalls or pay for additional residents to train.

   I am pleased to have the support of the American Osteopathic 
Association as well as many of Michigan's premier medical schools and 
academic medical centers.
   I look forward to working with my colleagues on ensuring that our 
Nation's teaching hospitals are the envy of the world and that we have 
the physician workforce we need for the future.
   Mr. President, I ask unanimous consent that letters of support be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

         Statewide campus system, Michigan State University 
           College of Osteopathic Medicine,
                                                   March 10, 2008.
     Hon. Debbie A. Stabenow,
     U.S. Senate, Hart Senate Office Building,
     Washington, DC.
       Dear Senator Stabenow: The Statewide Campus System at 
     Michigan State University is a consortium of 26 hospitals in 
     Michigan. Its primary purpose is to provide medical education 
     to nearly 1,300 interns, residents, and fellows within our 
     state. Support for the training of these physicians comes 
     primarily from federal financing through the Medicare 
     program. We are acutely aware how our training institutions 
     are disadvantaged by the current operations of the DGME 
     payment system. Many of our hospitals receive less than the 
     national average from Medicare that is used to offset medical 
     education. Public demands for increased patient safety and 
     competency assessment of procedural skills performed by 
     residents are unfunded mandates that we are now challenged to 
     provide.
       We are aware that Congress has addressed this issue in 
     piecemeal fashion in moving the reimbursement level from 70 
     percent to 85 percent of the locally adjusted national 
     average. Congress further recognized in the Medical 
     Modernization Act of 2003 by adding a provision that the 
     redistributed postdoctoral positions be reimbursed at 100 
     percent of the national average. The next logical step is to 
     level the playing field so that teaching institutions can be 
     compensated in accordance with their regionally adjusted 
     average and use the additional funds to expand our 
     educational commitments to residents.
       The Statewide Campus System is supportive of your efforts 
     to introduce legislation that would increase Medicare's 
     Direct Medical Educational payments at 100 percent for those 
     hospitals whose historical costs are less than the national 
     average. We welcome and endorse legislation that has the same 
     impact sponsored in the 109th Congress, S. 2289/H.R. 4371.
           Sincerely yours,
                                               Mark Cummings, PhD,
     Associate Dean, SCS.
                                  ____

                                            University of Michigan


                                                Health System,

                                                   March 11, 2008.
     Hon. Debbie A. Stabenow,
     U.S. Senate, Hart Senate Office Bldg.,
     Washington, DC.
       Dear Senator Stabenow: On behalf of Michigan's hospitals 
     disadvantaged under Medicare's Direct Graduate Medicare 
     Education payment system, we strongly endorse

[[Page S2158]]

     your legislation to address the longstanding inequities for 
     graduate medical education to be introduced on the Senate 
     floor on March 13, 2008.
       As you know, Medicare's formula for paying hospitals that 
     operate teaching programs is based on data from the early 
     1980s which are significantly below current costs and 
     increasing needs. Insufficient funding makes it very 
     difficult for hospitals to train a workforce sufficient to 
     care for the growing Medicare population.
       In our state, 34 teaching hospitals lose more than $18 
     million a year as a result of Medicare's out-dated policy. 
     More than 600 hospitals nationwide also receive less than the 
     national average payment from Medicare for the direct costs 
     of providing graduate medical education.
       Congress has addressed this problem over the past 7 years 
     in various incremental ways. In 2000, Congress included 
     provisions in the ``Medicare, Medicaid and SCHIP Benefit 
     Improvement and Protection Act'' (BIPA) to raise the floor 
     for direct graduate medical education payments from 70 
     percent of the locality adjusted national average to 85 
     percent. In the Medicare Modernization Act of 2003, Congress 
     again recognized the flaws in Medicare's payments to teaching 
     hospitals by including a provision requiring that any 
     resident positions redistributed to other hospitals be 
     reimbursed at 100 percent of the national average.
       The legislation would continue on this important path by 
     increasing Medicare's Direct Graduate Medical Education 
     (DGME) payments to hospitals to 100 percent of the national 
     average per resident for facilities whose historical costs 
     are less than the national average. In short, Medicare should 
     pay for the average cost of operating a training program so 
     no hospitals receive less than Medicare's fair share of the 
     costs of operating a medical education program. We appreciate 
     your leadership on behalf of the teaching hospitals, the 
     physicians we train, and the patients we serve.
           Sincerely,
                                                   Douglas Strong,
                                   Chief Executive Officer, UMHHC.
                                              American Osteopathic


                                                  Association,

                                    Washington, DC, March 4, 2008.
     Hon. Debbie Stabenow,
     U.S. Senate, Hart Senate Office Building,
     Washington, DC.
     Hon. Jim Bunning,
     U.S. Senate, Hart Senate Office Building,
     Washington, DC.
       Dear Senators Stabenow and Bunning: On behalf of the 61,000 
     osteopathic physicians represented by the American 
     Osteopathic Association (AOA), I am pleased to inform you of 
     our support for your legislation, which would amend title 
     XVIII of the Social Security Act to increase the per resident 
     payment floor for direct graduate medical education payments 
     under the Medicare program. We applaud your leadership and 
     strongly support your efforts.
       Numerous academic and advisory bodies, including the 
     Council on Graduate Medical Education (COGME), have issued 
     reports showing that there will be an inadequate number of 
     physicians to meet patient demands by the year 2020. This 
     shortage of physicians comes at a time when the Nation's 
     senior population and the number of Medicare beneficiaries is 
     growing at a rapid rate. While the precise number of 
     physicians needed is debatable, there is little doubt that 
     the Nation's graduate medical education system limits our 
     ability to meet the future physician workforce needs.
       Currently, one in five medical school students in the 
     United States is enrolled in a college of osteopathic 
     medicine. The Nation's colleges of osteopathic medicine 
     currently graduate 3,000 new osteopathic physicians annually. 
     This number will increase to approximately 3,500 in 2008 and 
     is projected to be greater than 4,500 by 2013.
       Please be assured that we are committed to educating and 
     training quality physicians that are capable of meeting the 
     health care needs of the nation. However, we must increase 
     the payment floor for direct graduate medical education 
     payments.
       Again, thank you for your leadership on this issue. The AOA 
     and our members stand ready to assist you in securing the 
     enactment of this important legislation. Please do not 
     hesitate to call upon the AOA for assistance as you move 
     forward on this issue.
           Sincerely,
                                              Peter B. Ajluni, DO,
     President.
                                  ____

     Hon. Debbie A. Stabenow,
     U.S. Senate, Hart Senate Office Bldg., Washington, DC.
     Hon. Jim Bunning,
     U.S. Senate, Hart Senate Office Bldg., Washington, DC.
       Senators Stabenow and Bunning: On behalf of the Coalition 
     for DGME Fairness, thank you very much for introducing direct 
     graduate medical education (DGME) legislation.
       We stand together in strong support of your legislation so 
     that we can continue to train a workforce sufficient to care 
     for the growing Medicare population. Medicare pays less than 
     its fair share for the costs of educating doctors in more 
     than 600 hospitals across the country.
       Your legislation would address the outdated methodology and 
     longstanding inequity by increasing the Direct Graduate 
     Medical Education (DGME) payment--for hospitals whose 
     historical costs are less than the national average--to 100 
     percent of the national average per resident amount. Medicare 
     pays hospitals for operating teaching programs based on costs 
     reported in the early 1980s. These payments bear little, if 
     any, relationship to the actual cost of operating training 
     programs in the 21st century.
       Twice before (1999 and 2001), Congress made incremental 
     improvements in DGME payments for these hospitals, 
     implementing a floor at 70 percent and then raising it to 85 
     percent of the national average. In the Medicare 
     Modernization Act of 2003, Congress again recognized the 
     flaws in Medicare's payments to teaching hospitals by 
     requiring that unused residency positions redistributed to 
     other hospitals be paid 100 percent of the national average. 
     This legislation would complete Congress's work to address 
     this inequity.
       On behalf of our physicians, hospitals, and the patients we 
     serve, we commit to work diligently with you to see this 
     legislation enacted. If you have any further questions or 
     need to get in touch with the coalition please contact Peggy 
     Tighe, Partner at Strategic Health Care at 202-266-2600 or at 
     [email protected].
           Sincerely,
                                      Coalition for DGME Fairness.
       Enclosure.

                                Alabama

       Huntsville Hospital; University of Alabama.


                                Arkansas

       Crittenden Memorial Hospital.


                               California

       Cedars-Sinai Medical Center; Loma Linda University Medical 
     Center; Pacific Hospital Long Beach; Stanford Hospital; UCLA 
     Medical Center; UC San Francisco Medical Center; University 
     of CA Davis Medical Center; UCSD Medical Center; UCI Medical 
     Center; UCLA Neuropsychiatric Hospital.


                              Connecticut

       Bridgeport Medical Center; Danbury Hospital; Hospital of 
     St. Raphael; Saint Francis Hospital & Medical Center; Yale 
     New Haven Hospital.


                          District of Columbia

       Georgetown University Hospital.


                                Florida

       Bayfront Medical Center; H. Lee Moffit Cancer Center; Tampa 
     General Hospital; Westchester General Hospital.


                                Illinois

       Memorial Medical Center; Mercy Hospital & Medical Center; 
     Northwestern Memorial Hospital; St. Johns Hospital.


                                Indiana

       Ball Memorial Hospital.


                                 Kansas

       University of Kansas Hospital.


                                Kentucky

       Jewish Hospital; St. Mary's Mercy Medical Center; 
     University of Louisville; University of Kentucky Hospital.


                             Massachusetts

       Mount Auburn Hospital; Tufts-New England Medical Center.


                                 Maine

       Maine Medical Center.


                               Michigan.

       Botsford General Hospital; Genesys Regional Medical Center; 
     Henry Ford Bi-County Hospital; Henry Ford Wyandotte; Ingham 
     Regional Medical Center; Mount Clemens General Hospital; POH 
     Medical Center; St. Joseph Mercy Hospital; University of 
     Michigan Health System.


                               Minnesota

       St. Mary's Medical Center.


                                Missouri

       Des Peres Hospital; Freeman Health; St. Luke's.


                             North Carolina

       Duke University Health System.


                              North Dakota

       Trinity Health.


                               New Jersey

       Monmouth Medical Center; Newark Beth Israel Medical Center; 
     Saint Barnabas Medical Center; UMDNJ--University Hospital; 
     Union Hospital.


                                  Ohio

       Cleveland Clinic Hospital; Clinton Memorial Hospital; 
     Doctors Hospital; Fairview Hospital; Hillcrest Hospital; 
     Forum Health Western Reserve; James Cancer Hospital; Medical 
     University of Ohio; Ohio State University Hospital; Riverside 
     Methodist; Southern Ohio Medical Center; South Pointe 
     Hospital; St. Elizabeth Health Center; St. Joseph Regional 
     Health Center; The University of Toledo; University 
     Hospitals.


                                Oklahoma

       Hillcrest Medical Center; Oklahoma State Univ. Medical 
     Center; St. Anthony Hospital.


                              Pennsylvania

       Lancaster General Hospital; Lehigh Valley Hospital; 
     Memorial Hospital; Millcreek Community Hospital; Robert 
     Parker Hospital.


                              Rhode Island

       Miriam Hospital; Rhode Island Hospital.


                                 Texas

       JPS Health Network; Memorial Hermann Hospital System; St. 
     Josephs, Ryan.


                                  Utah

       Univ. of Utah Hospitals and Clinics.

[[Page S2159]]

                               Wisconsin

       Gundersen Lutheran; Univ. of Wisconsin Hospitals & Clinics.

  Mr. BUNNING. Mr. President, I am proud to be introducing legislation 
today with Senator Stabenow that will benefit many of the teaching 
hospitals across the Nation, including 20 facilities in the 
Commonwealth of Kentucky.
  Teaching hospitals play a critical role in educating, inspiring, and 
preparing our young doctors to meet the challenges of their new 
profession. Although necessary, this training adds to the cost of 
patient care. That is why Medicare pays these hospitals for its share 
of cost of training new physicians through payments known as direct 
graduate medical education payments--or DGME payments.
  Unfortunately, there is some inequity in how DGME payments are 
calculated. The legislation we are introducing today takes steps to 
adequately reimburse all hospitals for the cost of training new 
physicians.
  Teaching hospitals initially reported their direct costs to the 
Department of Health and Human Services in the mid-1980s. These 
reported amounts are now the basis for which each teaching hospital is 
reimbursed.
  Unfortunately, there was a disparity in the types of costs each 
hospital reported, which has lead to large variations in payments 
between hospitals. Hospitals are also being reimbursed on data that is 
20 years old.
  To help rectify this problem, in 1999 Congress established a floor 
for calculating Medicare payments for DGME at 70 percent of the 
national average. In 2001, Congress raised the floor to 85 percent of 
the national average.
  The legislation Senator Stabenow and I are introducing today would 
bring all of Medicare's DGME hospitals up 100 percent of the national 
average over a 3-year period. This would affect about 600 hospitals 
across the Nation that are currently being reimbursed below the 
national average, including the 20 in Kentucky.
  I am glad we are introducing this legislation today and hope my 
colleagues can take a close look at it. Adequately paying our teaching 
hospitals is critically important, and this bill would benefit many 
hospitals across the country.
                                 ______