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MEMPHIS, Tenn. — Graduate medical education in Tennessee will not immediately be affected by a federal plan to pay 41 New York hospitals $400 million not to train physicians, a University of Tennessee health official said Wednesday.

UT Vice President for Health Affairs Bill Rice said the plan could be important if it is a sign of changes to come in federal policy toward graduate medical education.

“It will have no immediate impact on us,” Rice said, “but we do think it is the beginning of a reexamination by the Health Care Finance Administration of its policy toward graduate medical education. As such, it could have some impact down the road, which I think is good.

“Up to this, anything HCFA has tried to do with regard to graduate medical education in relation to Medicare funding has been opposed,” Rice said. “If this will open the door for HCFA to do some other creative things, it may be good for us.”

The plan allows New York to begin reducing its surplus of physicians in certain locations and in some specialties without hurting its teaching hospitals.

“Those hospitals up there are heavily dependent on the revenues they earn through their residency training programs, but something had to be done,” Rice said.

The plan provides that the 41 participating hospitals will reduce the number of residents they train by approximately 20 percent over the next six years. Meanwhile, Medicare will pay the hospitals for the residencies as if they were still there, gradually phasing out the payments in six years.

Tennessee does have the physician surplus and other problems that New York and HCFA addressed in the plan, Rice said.

HCFA is part of the U.S. Department of Health and Human Services. Congressional approval of the HCFA plan was not required.

Contact: Dr. Bill Rice (901-448-4796)