On August 1, 2003, 13 Republican and 27 Democratic U.S. senators sent a letter to Senate Majority Leader Bill Frist (R-TN) to express support for repealing the Medicare reimbursement rate cut to teaching hospitals that took effect on October 1, 2002. The cut is costing New York teaching hospitals $140 million annually. The letter, which was spearheaded by Senators Kay Bailey Hutchison (R-TX) and Edward M. Kennedy (D-MA), stated that the senators would like to see the final Medicare prescription drug bill, which is currently being negotiated by House and Senate leaders, increase the indirect medical education (IME) adjustment to 6.5% and keep it at that level for the next 10 years. The letter was also signed by Senators Charles E. Schumer, Hillary Rodham Clinton, Frank Lautenberg, and Jon Corzine. This letter is similar to another one authored by Congressman Christopher Shays (R-CT), which garnered the support of 47 Republican signatories, including New York metropolitan area Congressmen Peter King, Vito Fossella, and Christopher Smith. The Shays letter was sent in September. Greater New York Hospital Association (GNYHA) has been working with teaching hospitals nationwide, as well as the Association of American Medical Colleges and the American Hospital Association, to repeal the IME cut, and is grateful to the New York and New Jersey members of Congress for their support.

Meanwhile, the House and Senate conference committee charged with ironing out the differences between the Medicare prescription drug bills passed by the House and Senate earlier this year has announced tentative agreement on several portions of the bill, including regulatory reform provisions (designed to make the Medicare program easier to understand for both beneficiaries and providers) and a Medicare prescription drug discount card. The regulatory reform section of the bill contains a number of provisions that are strongly supported by the provider community, including a prohibition on retroactive application of new regulations and policies, a mandatory waiting period of 30 days before a substantive policy change can take effect, a prohibition on sanctions if a provider follows written, erroneous guidance from the government or its fiscal intermediaries, and reform of the provider appeals process. The agreement also contains a provision to provide timely data to hospitals so they can accurately compute the disproportionate share hospital patient percentage. Conference committee members continue to work with the goal of completing Medicare prescription drug legislation in October.