Hahnemann frees funding so medical residents can take new jobs

About 800 protesters gather outside Hahnemann Hospital, demanding that the facility remain open and closing the south bound lanes of North Broad Street. (Emma Lee/WHYY)

About 800 protesters gather outside Hahnemann Hospital, demanding that the facility remain open and closing the south bound lanes of North Broad Street. (Emma Lee/WHYY)

After weeks of protests from medical residents and fellows, the owner of Hahnemann University Hospital announced Wednesday that it will release the funding attached to its doctors-in-training, allowing them to accept jobs elsewhere. 

As soon as Philadelphia Academic Health System announced at the end of June that the 496-bed hospital would close, Hahnemann’s residents and fellows started interviewing at other hospitals, both locally and nationally. But even if hospitals wanted to make doctors job offers, most were hesitant to do so without a guarantee that the federal funding attached to the doctors’ residency slots would come with them. 

To release the funding, Hahnemann technically has to become de-accredited by the Accreditation Council of Graduate Medical Education (ACGME). On Wednesday, Philadelphia Academic Health announced that each residency program will withdraw from accreditation, with most doing so on Monday and a handful — family medicine, internal medicine, neurology, radiology and urology — withdrawing Aug. 6. On Aug. 7, the entire institution will withdraw from accreditation. 

“Once accreditation is withdrawn, both the ACGME and Centers for Medicare and Medicaid Services (“CMS”) will consider a resident/fellow displaced,” a Philadelphia Academic Health System official wrote in a statement Wednesday. “This displacement will allow Hahnemann to release the physicians along with allocated CMS funds to join the program of their choice.” 

A resident’s funding isn’t actually held by a hospital, but by the federal Centers for Medicaid and Medicare Services, which funds most graduate medical training across the country. Hospitals pay their residents salaries and benefits, then bill CMS for the money at the end of the year.

Funding for a doctor-in-training usually totals between $100,000 and $150,000 per year and is split into two parts: funds that go directly to the doctor, and indirect funding that helps the hospital defray the costs of training. The amount of money the receiving hospital gets from CMS is dependent on that institution’s current rate.

Philadelphia Academic Health has filed for Chapter 11 bankruptcy. In U.S. Bankruptcy Court in Wilmington last week, Hahnemann attorney Mark Minuti admitted that the residents would not have access to all their funding. 

A letter sent Wednesday by Philadelphia Academic Health’s academic director, William C. Boyer, confirmed that telling academic program overseers that the medical residents would travel with only about 80% of their total allotted funding. That may make them less attractive candidates to other hospitals. Boyer wrote that each resident would be allotted the same amount.

The smaller portion of funding is due to an academic arrangement struck between Hahnemann, Jefferson and the University of Pennsylvania at the end of June that afforded some of Hahnemann’s residency slots to those other institutions, meaning they have more slots to redistribute than they have access to corresponding CMS funding. 

Hahnemann had announced plans to shift most of its medical training programs to Tower Health, which operates six hospitals around Philadelphia and Reading. Because that proposal was for the programs themselves, and not necessarily the individuals, that plan could remain unchanged. It’s possible that residents would take only their slots with them to the accepting institutions for the duration of their training, and it would then be allocated to Tower once they finished. 

Janis Orlowski, chief medical officer at the Association of American Medical Colleges, which has been involved in the residency negotiations, said that might buy Tower the time it needs to get up to speed. Tower’s hospitals have only a total of 118 residency slots, about one-fifth what Hahnemann had, and only a fraction of its residency specialties.

“Tower is going to need this year while someone else is using the slots to get their act together,” she said. 

But it’s not entirely clear whether Tower would absorb all the slots permanently. It still needs to be accredited by the ACGME to take on the additional programs and residency slots. 

“We’re in the temporary redistribution,” Orlowski said. “What happens permanently will remain to be seen.”

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