Law Street Media

Teaching Hospitals File Suit Over Resident Limits

A hospital viewed from the exterior.

large modern building with blue letter H sign for hospital

On Sunday a case was filed in District of Columbia District Court by a group of teachinghospitals against Xavier Becerra as Secretary of Health and Human Services. The case is regarding the limitations placed on teaching hospitals as to the number of residents that a hospital can claim during a fiscal year and still receive Direct Graduate Medical Education Payments (DGME).

The plaintiff hospitals include Northwestern Memorial Hospital, University of Michigan Hospitals and Health Centers, the Milton S. Hershey Medical Center, UH Cleveland Medical Center, and UH Richmond Heights Hospitals.

Due to the highly experiential nature of medical expertise, training for physicians cannot be completed solely in a class room environment. Residency programs are established for ensuring that physicians obtain necessary hands on training in a highly monitored environment under the supervision of experienced practitioners. Medicare subsidizes this intensive environment by providing DGME payments based on the total number of full time equivalent residents that are within the program up to a designated cap, the complaint explained. This cap was set in 1996 and has not been adjusted.

The plaintiffs, however, are suing due to a new restriction which only permits the hospitals to count a resident physician as a full-time employee if that resident is within a time period known as an “initial residency period” or IRP. If a resident remains at the hospital beyond that time period, the plaintiffs are only compensated at half the normal rate, even though the presence of that resident counts at full rate toward the hospital’s maximum cap.

The plaintiffs argue that this weighting runs contrary to the plain language of the Medicare Statute at 42 U.S.C. § 1395ww(h)(4)(F)(i), and that the decision is arbitrary and capricious. The plaintiffs are represented by Powers Pyles Sutter & Verville, PC.

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