AAFP, Family Medicine Educators Lash Out at CMS Proposal

Federal administrators have inappropriately rushed to issue a proposed rule that has no legal foundation, has been explicitly prohibited for one year in recent legislation and -- if implemented -- would severely damage medical education and the health care safety net.

That was the message sent in a letter and 21-page legal analysis (PDF file: 24 pages / 418 KB. More about PDFs.) to Leslie Norwalk, J.D., acting administrator of CMS, by the Academy and its colleagues in the Academic Family Medicine Advocacy Alliance, or AFMAA.

"We can expect a massive disruption in physician training programs … and a breakdown of our already fragile safety net of care for un- and underinsured people," the June 22 letter to CMS says.

CMS should withdraw the proposed rule, which -- in "a transparently poor legal argument to attempt cost-shifting or cost-savings" -- would prevent federal financial participation in Medicaid funding for graduate medical education, or GME. If implemented, the rule would cost teaching hospitals $1.78 billion in funds used to defray the cost of medical education, says the letter.

The legal analysis concludes that, "CMS does not have discretion" under Medicaid law "to refuse to federally match state expenditures for medical education as part of their medical assistance programs." Such an action would require an amendment to Title XIX of the Social Security Act, which implemented Medicaid 40 years ago, according to the analysis.

"CMS' so-called 'clarification' of the law is nothing of the sort," the analysis says. "Rather, the proposed rule represents an abrupt reversal of CMS' own decades-old recognition of GME as a covered cost of providing hospital services and patient care under Title XIX, and amounts to an invalid disavowal of federal coverage that could be legitimized only if Congress itself were to amend Title XIX to eliminate coverage of GME."

CMS on May 23 had issued a proposed rule that "clarified" Title XIX. That clarification contended that GME costs "are not expenditures for medical assistance that are federally reimbursable under the Medicaid program."

On May 25, President Bush signed into law a bill that funded the war in Iraq and contained language that, for one year, prohibited CMS from issuing or implementing any rule that restricts GME under the Medicaid program.

"We do not understand CMS' rush to publish this proposal when the agency was well aware that Congress was in the process of acting to prevent such an administrative action," the AFMAA letter to Norwalk says. "As the agency is well aware, the President was just days away from signing into law a bill that included a one-year moratorium" on issuing or implementing the proposed rule.

Implementing the rule would impose a policy that goes against both federal and state goals of ensuring safety net access to health care and preventing a looming physician shortage.

On June 25, the CDC's National Center for Health Statistics reported that from 2005 to 2006, another 2 million Americans joined the ranks of the uninsured; 43.6 million people, 14.8 percent of all Americans, had no health insurance during that period, the report said. As a result, more people depend on safety net services for their health care. Meanwhile, the cost of providing care to those patients rises as residency programs retool to meet health information technology demands and incorporate new methods for improving the quality of care.

"In addition, we point out what CMS seems to have forgotten -- that residents themselves provide a tremendous amount of direct patient care to Medicaid recipients," the letter says. "Ignoring this critical patient care role ignores the impact this rule would have on access to care for Medicaid recipients if funding for training of a large number of providers in teaching hospitals is eliminated. We cannot see how a policy that would diminish the stability of the production of physicians and care for the underserved in this country at this time would be to the benefit of the nation."

Moreover, several studies point to a looming physician shortage, particularly in primary care, as the number of Medicare-eligible patients grows. State Medicaid plans provide GME funding to meet specific physician workforce goals that will encourage training in primary care specialties and in underserved communities, increase the supply of health professionals who serve Medicaid patients, and improve the geographic distribution of the health care workforce, the letter says.