exPCM

Membership Revoked
Removed
10+ Year Member
Apr 12, 2006
919
4
0
California
Status
Attending Physician
Washington, D.C., March 5, 2010—AAMC (Association of American Medical Colleges) President and CEO Darrell G. Kirch, M.D., issued the following statement today commending the Internal Revenue Service (IRS) for its decision to refund Federal Insurance Contributions Act (FICA) taxes to teaching hospitals and medical residents who filed claims for services prior to April 1, 2005:
"The AAMC is pleased that, after years of litigation on this issue, the IRS has exempted residents from paying FICA taxes for time spent in their residency programs prior to April 2005, when new IRS regulations were put into place. The return of these funds will no doubt be welcomed by new physicians, as well as by U.S. teaching hospitals with pending claims before the IRS.
"The AAMC has always strongly believed that residents are students and that their relationship with U.S. teaching hospitals is educational. That is why we recently filed an amicus brief in support of the University of Minnesota and Mayo Foundation's request to the U.S. Supreme Court to hear the case Mayo Foundation for Medical Education and Research and the Regents of the University of Minnesota v. United States. This case challenges an IRS regulation that categorically subjected all residents' stipends to FICA taxes beginning on April 1, 2005. The lawsuit claims that the IRS's inflexible approach is counter to the governing statute, which exempts 'students' from FICA taxes and contemplates that student status be determined by the facts and circumstances of each institution.

"We hope that the Court will agree to hear this important case and provide the opportunity to demonstrate that residents are first and foremost learners, honing their professional skills so they can advance patient care."
http://www.aamc.org/newsroom/pressrel/2010/100305.htm
 

medsRus

10+ Year Member
Feb 18, 2008
697
3
0
Status
This is big news. We should all collectively show support for this measure.
 

bullpup777

10+ Year Member
May 1, 2008
74
0
0
Status
Resident [Any Field]
So does this mean I will get a refund of taxes paid in 1998-2000 when I was first a resident?
 

Roofie

Removed
Feb 10, 2010
44
2
0
Status
Non-Student
I hope the AAMC loses this case. They continue to classify resident as students and in doing so allow programs to have almost complete impunity to abuse residents.

As students, residents were forced to work 120 hours a week. It took several generations to cut those hours down to 80. As employees, residents would be entitled to more protective work hours.

As students, residents will continue to lie on their work hour logs.

As students, residents will continue to work for depressed wages.

As students, residents are subjected to a promotions regime that allows programs almost complete discretion, a process many on this board have complained as colored by office politics. The expectation damages from this discretion are in the low billions of dollars per year if you multiply the summary non-renewals/left for personal reasons/terminations x 30yrs (average career span of a physician) x average annual earnings. In comparison, the FICA taxes at stake are miniscule. The AAMC has stood by and has done nothing for those residents on that issue. But it has fought the IRS tooth and nail for taxes that benefited a few hospitals. The refunds these residents may get are chump change compared to the true costs to their liberty interests. If anything, the AAMC has demonstrated where its true loyalties lie.

As students, residents continue to be subjected to questionable anti-competitive practices that more than likely will face constitutional challenges in the coming years. The AAMC and NRMP took advantage of an ailing senator (Ted Kennedy) in sneaking a practically undebated rider that exempted the Match from Sherman Antitrust protections through an omnibus bill. See Ex-PCM's prior post about the match.

The high-priced attorneys for AAMC have framed this debate as a matter of resident education. I hope the Court sees through this hogwash. This fight is not about the residents but about hospitals shirking their tax obligations.

If the Supreme Court holds that residents are students, it will delay reform of this system by another generation. I hope you guys realize how hazardous this case can be to the interest of residents.
 
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exPCM

Membership Revoked
Removed
10+ Year Member
Apr 12, 2006
919
4
0
California
Status
Attending Physician
If I run a hospital and I can get residents classified as students then I don't have to pay the 7.65% employer portion of the FICA tax. If residents are students then they may not participate in some programs like employee profit sharing, employee dental plan, etc. Way for hospitals to save big dollars.

The National Labor Relations Board (NLRB) ruled in 1999 that, since residents work long hours, make medical decisions and earn salaries and benefits, they are employees. The ruling, which responded to a petition filed in 1997 by residents at Boston Medical Center, granted collective bargaining rights to more than 90,000 interns, residents and fellows who work in private hospitals nationwide. "Interns, residents and fellows ... while they may be students learning their chosen medical craft, are also 'employees' protected under the National Labor Relations Act," ruled the board.
The hospitals fought against this ruling tooth and nail and it looks like they are not giving up the fight.
 
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