US teaching hospitals pay row

The 1200 teaching hospitals in the US were given notice last week that the federal government would no longer pay for services delivered by trainee doctors. In what is being called the biggest settlement in history, the University of Pennsylvania health system agreed to pay back $30m (pounds sterling19m) to Medicare, the US government insurance plan that covers elderly patients and pays for doctors in training.

According to federal rules, Medicare pays for trainees' salaries and for some of their teaching, but it does not pay for the medical services that they deliver. Instead, trainees are supposed to be supervised by senior doctors, who are allowed to bill the government and other insurers. A spokesman for the American Medical Association, Dr Robert Dickler, said that the rules have “a fair amount of ambiguity” about the level of supervision needed to be legitimate. Even federal regulators admit that a grey area exists between what is and what is not “supervision.”

But the government is investigating—in addition to the University of Pennsylvania—the University of Florida and at least six other teaching hospitals linked with universities.

America's teaching institutions are already under pressure. Congress is planning major cuts in payments for trainees' salaries, and the private sector's increasing pressures to cut costs are causing hospitals to close beds or shut down—JOHN ROBERTS, North American editor, BMJ