• House Lawmakers Urge Obama Administration to Cancel IME Payment Cuts
  • June 24, 2009 | Author: J. Harold Richards
  • Law Firm: King & Spalding LLP - Washington Office
  • On May 22, 2009, a majority of House lawmakers sent a letter to President Obama, urging him to cancel proposed payment cuts to hospitals’ indirect medical education (IME) payments. In 2008, CMS promulgated a rule that permanently phased out, over a two year period in 2009 and 2010, the IME adjustment paid to teaching hospitals for their capital expenditures. Congress eliminated the fiscal year 2009 cuts in the American Recovery and Reinvestment Act (Pub. L. No. 111-5), but that law did not include any language preventing CMS from eliminating the capital IME adjustment in fiscal year 2010. In its recently-issued proposed rule, CMS states that it plans to move forward with the elimination of the capital IME adjustment in 2010. See 74 Fed. Reg. 24200-01 (May 22, 2009).

    The letter, which was signed by 220 House members, states that “eliminating the IME adjustment to the capital PPS would result in nearly $375 million in aggregate annual losses and threaten the viability of teaching hospitals, which serve a high volume of Medicare beneficiaries and provide critical services unavailable elsewhere in communities across he country.”

    The letter further notes that “teaching hospitals have inherently higher capital costs than do non-teaching hospitals,” due to the need for classroom space, extra equipment to train medical residents, basic physical plant requirements, and more sophisticated physical plant needs such as advanced electrical, heating and cooling systems needed to support this technology. In addition, the letter notes that “the capital IME adjustment recognizes that teaching hospitals must meet the demand of treating sicker patients, as well as meet the financial demands of operating emergency and trauma care, providing highly specialized services, and treating uninsured patients.”