AAFP Joins California Academy in Supporting Residency Program Under 'Assault' by CMS

The AAFP is going to bat for the Stanislaus Family Medicine Residency Program at Doctors Medical Center of Modesto, Calif., after CMS decided to stop supporting the residency with funds for graduate medical education and demanded repayment of more than $19 million in Medicare payments to the facility. CMS has given no regulatory justification for its actions, which could increase health care costs and hurt patients' access to care, says the Academy.

Calling CMS' decisions an "assault" on the residency program, the Academy says in a sharply worded letter to CMS Acting Administrator Charlene Frizzera that even though the federal agency can't point to any regulations to justify its actions or to any misuse of funds, "CMS staff are demanding nothing less than closure of the residency program and a discharging of all staff and trainees."

"It appears that CMS is unwilling to be satisfied with anything other than complete dismantling of this important community resource," AAFP Board Chair Jim King, M.D., of Selmer, Tenn., says in the letter, which asks Frizzera to investigate the situation.

According to a March 18 press release (3-page PDF; About PDFs) from the California AFP, the dispute centers on reclassification of the residency. In 1997, the 34-year-old residency program moved to Doctors Medical Center of Modesto when Stanislaus County was forced to close its insolvent county hospital in the underserved Central Valley of California. Doctors Medical Center is owned by Tenet Healthcare Corp.

At that time, CMS ruled that the residency was a "new" program and, consequently, it decreased the per-resident payment from $115,000 to $70,000. The agency then proceeded to pay for Medicare services provided at the facility.

However, in 2007, CMS began an investigation based on rules that were not yet written in 1997 when the residency moved and was designated as a new program. Application of these more recent rules resulted in a decision to discontinue Medicare support for graduate medical education at the facility and to demand repayment of more than $19 million, despite the fact that "at no time has any malfeasance or misappropriation or misuse of funds by the program or hospital been claimed," according to the letter from the Academy.

The letter further notes that attempts by Tenet and Stanislaus County to collaborate with CMS in resolving the dilemma have been rebuffed, as have repeated attempts by the Stanislaus residency to negotiate on ways it could be preserved.

The AAFP joins the California AFP in urging CMS to preserve funding for the residency program. In the press release from the state Academy, CAFP President Jeffrey Luther, M.D., of Long Beach, Calif., says creating upheavals in the program will worsen primary care physician shortages in rural areas of the state.

"Access to primary and preventive care and timely treatment for chronic diseases improves population health and individual outcomes … This is the care CMS is asking us to toss aside," Luther says in the release.

In the same press release, Peter Broderick, M.D., M.Ed., of Modesto, Calif., director of the Stanislaus residency program, says CMS' actions make "an already bad economic situation in our county worse."

The AAFP letter tells CMS that the loss of the residency, a major clinical resource for the area's poor and disenfranchised populations, "will undoubtedly result in increased health care costs as people are forced to use local emergency departments for care of their more advanced illnesses."

"It is ironic that now, when the Obama administration is recognizing the substantial benefits of primary care to this nation, a family medicine training program serving an economically disadvantaged area is being dismantled by the CMS agency," King says in the letter.