By a vote of 9-6, the Medicare Payment Advisory Commission (MedPAC) turned down a draft recommendation to cut Medicare indirect medical education (IME) payments to teaching hospitals by 51%, or $2.5 billion a year. As a result, the recommendation will not be included in MedPAC's 2003 Report to Congress. GNYHA had argued strenuously against the draft recommendation because the total margin of major teaching hospitals, 1.5%, is the lowest of any group of hospitals, and the proposed cut would wipe out that meager margin and make it negative. IME payments cover the additional costs associated with teaching programs as well as losses that teaching hospitals incur from providing services that can be characterized as social goods, such as charity care, clinical research, emergency and trauma care, and preparedness for nuclear, biological, and chemical terrorist events.

Those voting "aye" on the draft recommendation to cut IME were MedPAC Chairman Glenn Hackbarth, independent consultant; MedPAC Vice Chairman Robert Reischauer, Ph.D., The Urban Institute; Autry (Pete) DeBusk, DeRoyal; David Durenberger, National Institute of Health Policy; Joseph Newhouse, Ph.D., Harvard University; and Alice Rosenblatt, WellPoint Health Networks. Those voting "nay" were Sheila Burke, Smithsonian Institution; Nancy-Ann Deparle, JPMorgan Partners; Allen Feezor, California Public Employees Retirement System; Ralph Muller, Stockap & Associates; Alan Nelson, M.D., American College of Physicians, American Society of Internal Medicine; Carol Raphael, Visiting Nurse Service of New York; John Rowe, M.D., Aetna, Inc.; David Smith, AFL-CIO; and Ray Stowers, D.O., Oklahoma State University, College of Osteopathic Medicine. Abstaining were Mary Wakefield, Center for Rural Health, University of North Dakota; and Nicholas Wolter, M.D., Deaconess Billings Clinic.