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Hospitals Can’t Get Money for Training Residents

ST. LOUIS (CN) - The U.S. government does not have to reimburse Medcenter One Health Systems and St. Alexius Medical Center for expenses related to training medical residents, the 8th Circuit ruled.

A three-judge panel found against the hospitals because the costs were not identified in a written agreement between them and the nonhospital sites where the training occurred. The decision reversed the District Court of North Dakota's ruling, which granted the hospitals summary judgment for the reimbursements.

"The hospitals have not pointed to any complying written agreement," Judge Duane Benton wrote for the court. "A letter from Associate Professor William S. Mann to the hospitals' chief executive officers states, 'Operating deficits will be covered by the hospitals, to the extent that they are incurred, consistent with agreed upon goals and sound practices.' However, the letter does not indicate that covering the operating deficits is 'compensation,' nor indicate how it is calculated."

The hospitals, located in Bismarck, N.D., had agreements with the University of North Dakota to rotate medical students through a jointly operated, nonhospital, family-practice facility.

The statute for the years 1999-01 reimburses a hospital when its residents care for patients in a nonhospital setting, but only if the hospital incurs all, or substantially all, of the costs of the training program in that setting. The rule requires an identification of those costs in a written agreement between the hospital and the nonhospital site.

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