Wednesday, January 19, 2011

ICU Rounds Report - Jan19th, 2011

Residents - workers or students? This question, which has been debated at least since the 1930's has tremendous implications from taxation to union organizing. Hospitals have claimed from the beginning that residents work primarily in an education role and therefore are not allowed to unionize, form collective bargaining agreements and are exempt from payroll taxes. Content to let the hospitals and CMS deal with this issue, the government agreed with this approach until 1990's when Social Security Administration realized it's missing out on up to 700 million dollars a years in unpaid FICA taxes. Then the court battles started.

Last week, in a unanimous decision in Mayo vs The United States, our highest court strongly rejected the argument put forward by the Mayo clinic that "the academic program of a medical resident is virtually indistinguishable from that of a third- or fourth-year medical student." Whether Mayo's attorneys were able to deliver this argument with a straight face is not known, as cameras are not allowed in the supreme court. The court instead held that residents "are clearly indispensable to the care provided at the hospitals where they are employed." They pointed to multiple instances where hospitals bemoaned the severe financial constraints created by ACGME work hours as an example. Despite hospitals rudely insisting that residents don't do any real work, Mayo's loss is a financial blow to residents straddled with six figure medical school debts.  Classification as students could have saved residents $4,000 dollars a year by avoiding FICA taxes.
Kesselheim AS. Residents: Workers or Students in the Eyes of the Law? NEJM epub Jan 12, 2011. 10.1056/NEJMp1100414

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