Tucked away at the bottom of Congress’s Iraq war supplemental spending bill is an amendment that has the potential to prevent Kansas hospitals from losing between $17 million and $30 million in federal funding.

While hospital administrators are appreciative of the amendment, they’re doubtful the provision will become law – President Bush has vowed to veto the entire bill because it contains a timetable for withdrawing troops from Iraq.

A proposal being developed by the Centers for Medicare and Medicaid services would cut federal funding for graduate medical education. The administration has argued that Medicaid is not an appropriate vehicle for funding medical education. The cuts would save the administration an estimated $1.7 billion nationwide but could prove costly to hospitals that say they already lose money for providing educational opportunities for Kansas medical residents.

The three hospitals in Kansas that receive medical education funding from Medicaid include Kansas University Hospital in Kansas City, Kan., and Wesley Medical Center and Via Christi Regional Medical Center, both in Wichita. KU Hospital could lose about $10 million in funds if the proposal goes through, while the combined effect would be about $7 million for the hospitals in Wichita, said Megan Ingmire, a spokeswoman for the Kansas Health Policy Authority, which oversees Medicaid in Kansas.

“Medicaid GME is a federal match program,” Ingmire said. “State funds compose 40 percent and federal funds 60 percent of GME payments to those hospitals.”

KU’s stance

At KU Hospital, payments to residents provided by the KU School of Medicine are at the center of a dispute over a proposed affiliation with St. Luke’s Hospital in Kansas City, Mo. The medical school says it should be paid more for the residents, while KU Hospital says an affiliation with St. Luke’s, a competitor, dilutes the KU brand.

Dennis McCulloch, KU Hospital spokesman, said it’s hard to determine what sort of effect the cuts might have because the hospital negotiates a specific rate for Medicaid services with the state of Kansas and in so doing doesn’t get a specific line item for medical education funding. He added that total exposure to the hospital, however, could top $20 million, according to internal estimates.

“Certainly, a significant reduction would have to be figured into the rate we’re negotiating with the med school,” McCulloch said.

Lobbying efforts

McCulloch said KU Hospital has been working with the Association of American Medical Colleges to educate congressional leaders on how costly this proposal could be.

The AAMC has sent several letters to members of Congress, imploring that they support the proposed amendment to prevent cuts to medical education.

In an April 23 letter to the majority and minority leaders, the AAMC urged them to support legislation that would “halt development of the proposal to eliminate graduate medical education funding in order to protect safety net hospitals.”

McCulloch said the Kansas congressional delegation, both Democrat and Republican, has been very supportive of the hospital’s position.

Effects in Wichita

In Wichita, Via Christi already loses nearly $6 million per year on its program to educate medical residents, said hospital chief financial officer Mike Wegner. The hospitals in Wichita also need to add at least $6.5 million worth of new faculty and facilities in order to maintain accreditation, Wegner said.

Kansas House members recently added $6.6 million to the budget to pay for those needs.

“The doctors we train (in Wichita) are a lot of the doctors who stay in Kansas,” Wegner said. “These cuts would have substantial impact on our ability to operate this program.”

Wegner also said he thought Medicaid was “absolutely an appropriate vehicle” for funding graduate medical education.

Penny Vogelsang, chief operating officer of the KU School of Medicine in Wichita’s graduate medical education program, said a loss in any funding could have a tremendous effect on the school’s ability to educate its 270 residents.

Reaction

U.S. Rep. Dennis Moore, a Democrat whose district includes KU Hospital, said funding for graduate medical education is a crucial part of improving access to health care for all Americans that must not be curtailed.

U.S. Rep. Todd Tiahrt, a Republican whose district includes the two Wichita hospitals, is opposed to the administration proposal, according to a spokesman.

“The congressman opposes this effort not only because of the impact it would have on hospitals in Wichita, but also the impact it would have on KU Medical Center,” spokesman Chuck Knapp said.

Representatives from the Centers for Medicare and Medicaid Services, which would implement the rule change, did not reply to several requests for comment for this article.