Issue: Indirect Medical Education (IME)
Overview:
As mandated under current law, in October 2002, IME payments were cut 15 percent
(from a 6.5 percent to 5.5 percent level), bringing the total cuts from 1997
to 28.6 percent. IME payments are critical to the financial viability of teaching
hospitals. The nearly 30 percent IME payment reduction is one of the largest,
if not the largest, reduction (in percentage terms) that was mandated by the
Balanced Budget Act. The most recent reduction is coming at a time when teaching
hospitals are facing other payment reductions from the Medicare program, including
reductions in Medicare outlier payments as a result of a 65 percent increase
in the Medicare outlier threshold, changes to the calculations of the wage
index, and a less-than-inflation update. In addition, major teaching hospitals
are faring more poorly under the Medicare outpatient system than other hospital
groups. Teaching hospitals are also dealing with other daunting challenges,
including payment cuts in Medicaid programs, workforce shortages, increasing
emergency and stand-by preparedness, and the financing of cutting edge technologies.
In addition, the recent growth in the number of uninsured persons (charity
care) is placing additional financial pressures on many of the se institutions
because of their role as safety net providers. Recommendation: The Medicare
programs support for teaching hospitals through the IME adjustments
must be maintained if we are to avoid dismantling this important component
of the health care systema scenario that would be difficult, if not
impossible, to reverse in the future.
Current Action by NJCTH:
On the federal level, NJCTH has been working with the AAMC (Association of
American Medical Colleges and AHA (American Hospital Association) on the (IME)
funding issue.
For more information:
From
Sister Organizations:
American
Hospital Association Website