Medicaid GME: AAIM’s Signature Issue for the Start of 2008

This column in prior editions of Academic Internal Medicine Insight frequently commented on many of the challenges facing the internal medicine community, including reductions in federal funding for medical education and research, lagging interest in careers in internal medicine, and the divisive forces approaching the community. For the near future, I hope to use this column differently by providing readers resources you can use to help address these challenges. To signify the importance of your work and that of the Alliance for Academic Internal Medicine in acting on these issues, I have chosen to label the content of this column Signature Issues, in reference both to the signature you can apply at the bottom of correspondence to legislators and regulators about these topics as well as to signify how notable it will be for you and AAIM to make a difference in these areas. Additional information and resources about the topics covered in this column will be available on the AAIM website at www.im.org/signature.

Federal and state funding for graduate medical education through the Medicaid program totals over $3.1 billion annually according to an analysis conducted by the Association of American Medical Colleges. Federal GME support through Medicaid is a bellwether for the larger pool of funding the Medicare program provides for GME (over $6 billion annually in direct and indirect payments). As such, I believe it is important to marshal our efforts in support of Medicaid GME dollars as an indicator of the opposition the community can rally against Medicare GME cuts the might be proposed in the future.

In its fiscal year 2008 budget, the Bush Administration proposed eliminating federal Medicaid matching funds for GME expenses states incur because paying for GME is outside of Medicaid’s primary purpose, which is to provide medical care to low-income populations. Despite the administration’s claims, however, the federal government (in a Federal Register notice) acknowledges it allowed States to include hospital GME activities as a component of the cost of Medicaid services, and congressional intent expressed at the inception of the Medicare GME program clearly anticipated eventual GME funding from all health care insurers.

The February 2008 budget proposal was met, luckily, by congressional critics, who passed a moratorium on the proposed change to the Medicaid regulation in May 2007. The one-year moratorium expires in May 2008, however, and observers expect the Bush Administration will likely push through the cut unless further congressional action is taken. Luckily, a bipartisan group of senators and representatives have sponsored bills to extend the moratorium on cutting Medicaid GME for an additional year. At this point, it is important to continue pushing for passage of S 2460 or HR 3533 given the slow pace at which Congress usually works in an election year. You can find contact information for your congressional representatives online at www.house.gov and www.senate.gov.

In contacting your representatives in Congress, it’s important to know your facts. Here are some to keep in mind as you make your case:

1. The Association of American Medical Colleges commissioned a report on the amount of Medicaid GME funding per state. New York tops out the list with roughly $1.2 billion in Medicaid GME support.
2. Depending on who you ask, it costs at least $83,000 per year to train a resident when taking into consideration resident salaries and fringe benefits as well as the associated educational costs. If New York were to lose Medicaid matching funds for GME expenses, the nation would possibly lose 14,000 residents.
3. States are not well positioned financially to make up for the loss of federal Medicaid matching funds, with over 22 states already projecting significant financial deficits for one or both of the next two years. These deficits may also prompt states to reduce their own spending on GME if the federal matching funds are not available.
4. Thirty state governors, including California’s Arnold Schwarzenegger (R) and New York’s Elliot Spitzer (D), wrote congressional leaders in December 2007 to encourage them to halt the administration’s proposals related to Medicaid.
5. Medicaid spending, generally speaking, is one mechanism for boosting the economy. In testimony January 23, 2008, Congressional Budget Office Director Peter Orszag stated, Additional federal aid to states that are facing fiscal pressures or are already in recession would probably stimulate the economy.

In a final step, as important as contacting your members of Congress, it is also important to develop and educate allies who can help amplify the call for an extended moratorium. State and local hospital and medical associations are natural groups to recruit to the cause. And you never know who else might be interested the Brooklyn Chamber of Commerce listed opposing Medicaid GME cuts as its number one advocacy issue in 2007.

As always, please feel free to contact any of the AAIM policy staff (Nicole V. Baptista [nbaptista@im.org], Jessica L. O’Hara [johara@im.org], or me [cclayton@im.org]) if we can be of any assistance in your advocacy efforts.

Sincerely,

Charles P. Clayton
Interim Executive Vice President and Vice President for Policy