This report is submitted for information only and is an update on the status of AMA-RFS key issues.

w In the Balanced Budget Act of 1997, Congress created two governmental bodies to address Medicare reform and funding for graduate medical education. In March, the National Bipartisan Commission on the Future of Medicare disbanded without being able to forward its recommendations to Congress. The Medicare Payment Advisory Commission (MedPAC) issued its recommendations in August. MedPAC’s recommendations call for a new way of thinking about GME funding. They argue that the federal government, through Medicare, should pay for patient care, not for training residents. To calculate payments, MedPAC recommends eliminating the current method of financing direct costs such as resident and faculty salaries and benefits. Instead, they suggest increasing the payments related to the costs of treating patients. They will issue guidelines on calculating payments in March 2000.

Funding for teaching hospitals has recently become more prominent. Several studies have shown that the Balanced Budget Act is straining the budgets at teaching hospitals and one study predicts that at least 100 teaching hospitals will be operating at a loss by 2002. Several members of the Senate have proposed changes that would provide additional funding to teaching hospitals; at this time, these proposals appear to have widespread support.

Because of these recent discussions and a resolution from the RFS asking the AMA to re-examine the physician workforce issue, the AMA Council on Medical Education convened an open hearing on GME funding and the physician workforce in March. The RFS testified at that hearing. A summary of our testimony, an overview of GME funding and details on recent developments can be found in RFS Governing Council Report G (A-99).

w Medicare GME Demonstration Project: In February 1997, the Health Care Financing Administration (HCFA) announced a demonstration project in New York State to subsidize hospitals throughout the state to reduce the number of resident positions. Under the plan, hospitals must cut the number of residents by 25 percent over 6 years, or by 20 percent while improving primary care training. During the first year, hospitals will get the same amount of money for residency training as they are getting now. By the second year, reimbursement drops to 95% of the amount based on 1997 numbers and by the seventh year, the hospitals will only be reimbursed for the number of residents they are training at that time. At the start of the project in 1997, nearly two-thirds of New York’s 68 teaching hospitals signed up. As of March 1999, only 23 hospitals remained in the project. While hospitals have dropped out for various reasons, in general, they have found that the cost of replacing the service component of residency training is not close to being offset by increased efficiency and the expected transition payments. Some hospitals have been unable to work within the project’s design. For example, if a hospital decided it needed seven years to make a 25% reduction, the hospital would not be able to remain in the project. HCFA’s plans to expand the project nationwide have been postponed due to the Year 2000 computer problem. The Governing Council and staff will continue to monitor developments in this project.

w J-1 Visa Program: In July, the U.S. Information Agency, which administers the J-1 visa program, which helps international medical graduates (IMGs) come to the US to pursue graduate medical education, issued a statement clarifying the rules of the program. The most controversial provisions are: 1) J-1 recipients can not moonlight. In addition, AMA legal counsel has advised us that H-1B visa holders cannot moonlight outside their sponsoring institution; 2) J-1 recipients cannot participate in the J-1 program beyond the number of years for initial board certification, making it difficult to do an additional chief year. These provisions do not represent a change in policy--they are a clarification of existing policy. The RFS Governing Council is working with the IMG Section to determine what, if any, action is appropriate in this situation.

w State Licensing of Residents: The Federation of State Medical Boards (FSMB) recently made several legislative and regulatory recommendations regarding the licensing and registration of resident physicians. The FSMB is concerned that current state licensure requirements can allow a problem resident, such as one who has been dismissed from a residency program, to re-enter or continue residency training. The AMA and the AMA-RFS Governing Council have many concerns about the FSMB recommendations. The AMA Council on Medical Education (CME) convened an open hearing on the subject in February 1999.

Some of the FSMB’s recommendations are:

• Requiring all residents to acquire a Resident Physician Permit (RPP) through the state licensing board. Full licensure status could not be achieved until the resident had worked for three years under an RPP. The RPP would be renewed annually, contingent upon the receipt of a satisfactory report from the program director.
• An RPP would only be issued to a resident who has passed both steps 1 and 2 of the US Medical Licensure Examination (USMLE).
• The RPP would only be valid for medical practice at the training program, not at any institution.
• The RPP application would require an application fee, as well as a yearly renewal fee.

In addition, the FSMB recommends that the residency program document that the applicant is a graduate of an accredited medical school, has passed steps 1 and 2 of the USMLE, and verify a satisfactory "background investigation" certified by the dean of the applicant’s medical school. If the resident is an international medical graduate, certification by the Educational Commission for Foreign Medical Graduates within the past several years must be documented. Program directors will also have to complete an annual "group report" listing:

• Disciplinary actions taken against any resident.
• Restrictions on advancement based on behavioral or performance inadequacies.
• Dismissal of any residents from the program and reasons why those residents were dismissed.
• Resignation of any residents from the program and reasons why those residents resigned.
• Referrals of any residents to substance abuse programs (unless the resident voluntarily submits).
• Whether any resident has left program for "any length of time in excess of two weeks" and a list of reasons why.
• A list of residents who have been recommended for advancement.

At the open hearing, the AMA-RFS and several other groups representing students, residents, and teaching physicians testified against many of the FSMB recommendations. The CME formed three working groups, which met after the open hearing to focus on specific issues and to discuss recommendations. Two residents from the AMA, Charles Rainey, MD, JD, RFS Past Chair and Robert Phillips, MD, past resident representative to CME, served on these working groups. CME summarized the testimony and presented its recommendations in CME Report 8 (A-99), Alternatives to the Federation of State Medical Boards Recommendations on Licensure. The final language that the AMA HOD adopted is included in AMA-RFS Report K (I-99). The recommendations have been sent to state licensing boards and medical societies. We urge all residents to work with their state medical societies and the AMA to prevent the FSMB recommendations from becoming state law or regulation.

w ACGME Outcomes Assessment: Last year, the Accreditation Council for Graduate Medical Education (ACGME) launched a three-year project to study ways to better incorporate educational outcomes assessment into the residency review process. The goal of the project is to develop accreditation procedures that take into account whether a program’s residents develop into competent patient care professionals. Traditionally, accreditation reviews have focused on process and structure variables, such as availability of facilities and equipment, number of faculty, conferences held, and rotations offered. This project will look into changing the reviews to put more emphasis on outcomes. Among the general competencies that the ACGME is examining are knowledge, skills, and attitudes pertaining to medical informatics, professionalism, evidence-based decision making, medical ethics, interpersonal communication, teamwork, continuous quality improvement, and practice management in diverse health systems and settings.

At its February meeting, the ACGME endorsed six general competency areas: patient care, clinical science, practice-based learning and improvement, interpersonal skills and communication, professionalism, and systems-based practice. To develop the competencies, the ACGME solicited input from various groups, including content experts, medical educators, residents, health system administrators, physician associates, and societal and patient spokespersons. The Residency Review Committees (RRCs) and the Institutional Review Committee are responsible for including the competencies in their requirements. A specific timeframe for implementation has not been set. For a more detailed description of the project, see JAMA Resident Forum, May 13, 1998.

w Resident Work Hours: At A-98, the RFS Assembly referred a resolution to the Governing Council asking the AMA to "support the elimination of any RRC guidelines that discourage alternatives to traditional night call such as night float." The resolution was referred because it was not clear that such guidelines existed.

To address this question, the RFS Governing Council conducted a survey of RRCs, asking if any program requirements, guidelines or interpretations exist regarding night scheduling. 24 RRCs said that they had no language regarding night scheduling. The RRC for Family Practice mentioned that they require programs that use a night float system to indicate that they do so. The program requirements for Pediatrics state "Night float rotations must not occur so frequently in the program as to interfere with the educational experience for the residents." The BOT is preparing a report on this issue for the 1999 Interim Meeting; we will review that report when it is issued.

w Anonymous Surveys: In June 1998, the ACGME adopted language that requires all programs to conduct annual anonymous written evaluations by residents of the faculty and their program experiences. The design and implementation of the surveys will be determined by each individual RRC. The RRCs for Pathology and Internal Medicine have developed a survey that may be used as models for other RRCs.

This accomplishment was the result of direct action by the RFS and the Governing Council. At the 1995 Annual Meeting, the RFS asked the Governing Council to re-emphasize and re-study the issues of work hours, workload, and supervision and report to the Assembly on what actions might be taken to further resident interests in these areas. The Governing Council responded at the 1995 Interim Meeting with two reports, which the RFS adopted. Report G outlined the Governing Council’s approach of using disclosure for the enforcement of work hour limitations. Report J called for the AMA to support annual mandatory anonymous surveys of all residents by all RRCs. In September 1996, the ACGME and its RRC Council endorsed the use of anonymous resident surveys in the process of reviewing residency programs.

w Resident Contracts: The RFS worked with the AMA to create language for model resident contracts. This model contract includes specific language regarding the closure of hospital training programs and procedures for the relocation of their residents and their funding. For a full copy of AMA’s model contract language, contact the AMA Department of Resident and Fellow Services (DRFS) at (312) 464-4751 or e-mail natalie_goolsby-eberhart@ama-assn.org.

w Collective Negotiations and Housestaff Organizations: The RFS is working aggressively to increase resident representation within teaching hospitals. We believe that the best way to achieve this goal is by encouraging residents to form housestaff organizations that can work to resolve resident concerns. For the past few years, the AMA-RFS has urged the AMA to form a national labor organization for eligible physicians and residents. The AMA HOD discussed this at a few meetings and has consistently supported the formation of a labor organization. The RFS and AMA actions on this are detailed in AMA-RFS Report F (I-99).

NLRB Decision: The issue of collective bargaining by residents gained greater prominence in 1998, when the National Labor Relations Board (NLRB) began considering a case initiated by residents at the Boston Medical Center that asked the NLRB to recognize all residents as employees for purposes of collective bargaining. The AMA filed an amicus brief in conjunction with the Massachusetts Medical Society.

ACGME Response: As a consequence of the events surrounding collective negotiations, the ACGME and other medical education groups have taken actions to improve working conditions for residents. In 1998, the ACGME made several changes to their Institutional Requirements. These include:

• Requiring a resident voting member on the institution’s Graduate Medical Education Committee.
• Changing several guidelines to requirements.
• Requiring anonymous written evaluations of faculty and educational experiences.
• Requiring the institution to create an educational environment in which issues can be raised and resolved without fear of intimidation or retaliation. This includes:

1. An organizational system for communication on all issues pertaining to residents and their educational programs.
2. Procedures to address concerns of individual residents in a safe, confidential manner.
3. Establishment and implementation of institutional policies and procedures for discipline.
4. Establishment and implementation of institutional policies and procedures for adjudication of resident complaints and grievances, which could seriously reflect a resident’s career.

The AMA has attempted to amend the language in the Institutional Requirements so that they would require institutions to find a way to resolve resident concerns. We have not yet been able to amend the language but will continue to try to make this language change.

w Residents on RRCs: Because of a great deal of work done by the RFS Governing Council, every RRC, except Thoracic Surgery, includes a resident member. The method of resident selection varies, including the degree of resident input into the selection process. All residents on RRCs can participate in policy discussions and most can participate in program review. About half of the residents can vote on program review. This represents impressive progress since the RFS first asked ACGME to include a resident on each RRC in 1996. At that time, less than half the RRCs had resident members sitting in any capacity. At I-98, the RFS sent a resolution to the AMA asking it to call for all residents on RRCs to be peer-selected; that resolution was referred to the AMA BOT. The RFS will continue to monitor developments and push for full voting rights for every resident member on an RRC.

w Residents and FICA Taxes: .In July 1998, the U.S. Court of Appeals for the 8th Circuit handed down a decision that found that the University of Minnesota does not have to pay FICA for residents because they are students, not employees. The decision was based on the particular circumstances in Minnesota concerning: (1) the agreement between the state and the Federal government when the state entered the Social Security program; and (2) the fact that the residents' relationship to the University established that they were students (they pay tuition, are enrolled as students, and their "primary purpose for participation in the GME program is to pursue a course of study rather than to earn a livelihood.").

Based on the court decision, residents at the University of Minnesota and at the University of North Dakota have had FICA money returned. It appears that the major reason for the return of the FICA money in North Dakota is that the University filed an appeal on the same issue as in the Minnesota case, and the appeal was put on hold pending the Minnesota outcome. It also is significant that North Dakota is located in the same judicial circuit as Minnesota (the circuit consists of Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota and South Dakota). Courts in other circuits do not have to look to the Minnesota decision as precedent.

AMA legal staff and other attorneys have concluded that this ruling is not broadly applicable. However, if we learn that this issue is broadly applicable, we will actively notify residents and training institutions.

w Student Loan Deductibility: The AMA has been a long-time proponent for reinstituting the deductibility of student loan interest (Policy H-305.955, AMA Policy Compendium). In 1997, Congress partially reinstated deductibility. It allowed a $1,000 deduction for student loan interest in 1998 increasing to $2,500 by 2001. This above the line deduction is tied to a means test of $40,000 for individuals and $60,000 for couples. The amount of deductibility is gradually reduced for individuals with incomes above $40,000 but below $55,000. The AMA continues to seek a means to increase deductibility for those people holding medical student loans.

The AMA-RFS actively promotes public health and safety issues, and residents have always submitted resolutions on public health at the Annual and Interim Meetings. During the past five years, the RFS has submitted resolutions on HIV, tobacco, violence, athletic safety, drug abuse treatment and prevention, and health education to the AMA HOD. The following is a summary of a few recent RFS actions and policies on some of these public health issues:

• supports FDA regulation of tobacco as a drug;
• supports protection of preschool children from passive smoking;
• called for the AMA to work to reduce tobacco product advertisements targeting minorities;
• called for repeal of the duty-free allowance for import of tobacco products into the US and urged the VA to prohibit the sale and use of tobacco products in VA hospitals.

w In a continuing effort to combat teen smoking, the AMA-RFS sponsored its second annual anti-tobacco contest, "No Ifs, Ands, or Butts—No Smoking!" The contest was opened to 6^th through 8^th grade students nationwide. Students were invited to submit 8½" x 11" posters that included an original slogan encouraging teens not to smoke. At its Annual meeting, the HOD voted for their favorite poster. In conjunction with the contest, residents and fellows were encouraged to conduct presentations on the dangers of smoking at local schools.