TreeOfLife said:
am currently completing a transitional year internship. I have applied to and interviewed at both PGY2 and PGY1 (4yr) programs this year. Several people have mentioned, in passing, that a PGY1 (4yr) program would not be able to get funding for me in the PGY4th year because I will be entering the program, having completed an internship, and already at the PGY2 level. .....
I did some extensive research on this some time ago. I think the rules are still the same. I'm no longer sure of the exact dates of the changes, listed following, but I think the gist of what I'm about to say is correct.
In the mid '80s the Health Care Finance Administration now known as Centers for Medicare Services (HCFA -> CMS) changed how they paid hospitals for care from a straight fee for service discounted rate to a program called diagnosis related groups. The hospitals complained that the DRGs did not account for the cost of teaching residents. So, the funding for resident training expenses was set up to give the hospitals money out of two pots.
Pot 1 is called the Direct Medical Education funds or DMEA. This covers costs directly associated with resident salaries, malpractice insurance, vacations, benefits, or anything directly identified as a cost of having a resident at the program.
Pot 2 is called the Indirect Medical Education funds or IMEA. This covers the "indirect" costs. These costs are hospital costs that they incur that would not be spent, if there were no residency program at that hospital. These costs cover things like the time faculty spend preparing lectures, teaching rounds and shared office/call space that residents take up, increased costs of patient care by residents, but you can't point to a line in the budget and say this cost belongs to that resident.
This is a common way that government funds contractors. Generally, the DMEA costs are whatever the hospital pays to keep a resident on staff. The IMEA costs are a somewhat complex formula based on the size of the program, the number of medicare patient bed-days, the overall cost of running the hospital, and a dash of accounting magic understood only by those who have attained accounting sainthood.
These funds, at the time I looked into this in detail amounted to about $150k/resident per year, direct and indirect costs at a particular hospital.
Clearly hospitals who use residents to do work, like the idea of having the feds pay for residents. And, the more residents they have, the better off they are financially and having workers available to take care of patients. There was explosive growth of the number of residency positions in US hospitals, far in excess of available graduating medical students to fill them once hospitals understood this system. So, in the mid-1990s the government took out its giant funding pipe pipe wrench and made some adjustments.
The first adjustment was to set an overall cap on residents at the hospitals. Each hospital could only receive a funding for a certain number of residents based on the number of medicare inpatient-bed-days in that hospital. This capped the Indirect reimbursement portion.
The Direct portion was also capped but in a different way. HCFA/CMS capped the length of time it would pay for DMEA. It calculated the length based on the initial field of training. So, if you started out in a surgery program with 5 years of training, you got 5 years of DMEA funding available. If you later switched fields to family practice after a year of surgery, you were golden since you still had 4 years remaining DMEA funds. But, if you switched from FP (3 years) to a longer program like Surgery, at the PGY2 level, you would only get the PGY2 and PGY3 years of DMEA funding. The remaining years of the surgery residency would be on the hospital's ticket for direct expense.
Note that in this case, the hospital would countinue to receive the Indirect costs associated with this resident, so the hit isn't as bad as getting zero dollars, and at least in the primary care specialties, the hospital has reduced attending supervision requirements beyond the first six months of training. So this isn't all bad for the hospital, since residents do generate some revenue for the hospital and they are still far cheaper than hiring an attending physician or hospitalist.
Where it gets really tricky is when a resident does a program that requires a TY followed by a residency, in those residencies that require a TY. I really don't know how that works.
I also think, but am not certain that only LCME accreditted graduates will be eligible for the DMEA, but not the indirect expense reimbursement, so, subject to the patient cap, hospitals will continue to get IMEA reimbursement for this. This is where the popular rumor that FMGs do not get funding springs from. I think the indirects are still substantial even if the direct reimbursement isn't available, so it still is in the hospital's best interest to have their slots filled.
A recent interesting twist on this was to have hospitals who have unused cap spots be able to transfer them to another hospital. Maybe the hospitals will start buying and selling residents. Boy what a picture that brings to mind
🙄
Sigh...like most government programs...it's complicated.
