Rural hospitals are missing out on a major expansion of medical training
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Illustration: Shoshana Gordon/Axios
The largest expansion of federally funded medical residency slots in over two decades was supposed to be a major lifeline for rural hospitals struggling with provider shortages. But very few rural hospitals have received the coveted slots so far.
Why it matters: America's health provider shortage is most staggering in rural communities, where people are generally older and sicker than those in urban areas.
- Because medical residents are far more likely to practice where they train, increasing residency positions is seen as key to addressing rural America's provider shortages.
Driving the news: Just seven of the 199 hospitals that have received federal dollars for new residency slots in initial funding rounds are in rural areas, federal health officials confirmed to Axios.
Catch up quick: Medicare is the primary funder of physician residencies. But hospitals face Medicare funding caps, which are typically based on how many residents they trained in 1996. Most hospitals use other funding sources to train additional residents.
- Congress in 2021 approved 1,000 new Medicare-funded residency positions to be allocated over five years as a way to mitigate physician shortages in rural and other underserved areas.
- However, rural hospitals say they're at a disadvantage because of a legal technicality in how hospitals are classified.
Between the lines: Relatively few rural hospitals have sought out the new residency slots. Only 13 have applied in the first two funding cycles, according to the Centers for Medicare and Medicaid Services, which oversees allocation of the federally funded residency positions.
- A combination of limited infrastructure and staff to run residency programs, as well as a lack of awareness about the funding opportunity, has prevented more hospitals from applying, said Carrie Cochran-McClain, chief policy officer of the National Rural Health Association (NRHA), which informally surveyed members.
- "Our communities need us, our patients need us. I'm fearful if we don't train the next generation of providers that our patients won't have a place to go," said Matthew Jansen, a primary care doctor and director of education at the Marshfield Clinic Health System, a rural provider in Wisconsin.
- A spokesperson for CMS said the agency has done outreach to "potentially geographically rural applicants" about the new residency slots and will continue doing so.
Yes, but: Rural health advocates say a loophole in the law is also keeping rural hospitals from benefiting from new residency slots.
- The 2021 law requires that 10% of new Medicare-funded residency slots go to rural hospitals or hospitals that are "treated as being located in a rural area."
- That wording is key: A 2016 court ruling allows urban hospitals meeting requirements to reclassify themselves as rural hospitals for certain financial purposes.
- Changing geographic classification can boost a hospital's Medicare payment and open them up to more residency funding.
- In the first tranche of new residency slots awarded, about 6% went to geographically rural hospitals, while 42% went to geographically urban hospitals that reclassified as rural, according to NRHA data provided to Axios. Some of those urban hospitals likely were awarded slots because they qualified under criteria unrelated to their rural classification.
Zoom in: Marshfield Clinic in rural Wisconsin has been passed over twice for new residency slots.
- Marshfield, which has trained health care providers since the 1920s, is over its federally funded residency cap and already self-funds several training positions. The health system jumped at the chance to apply for the new funding to grow its internal medicine residency program, Jansen said.
- "It was very disappointing to see that much of the monies went to urban areas, leaving us out in the cold," he said.
A CMS spokesperson said the agency has prioritized awards based on the severity of provider shortages at qualifying hospitals.
- Only 40% of new residency slots have been awarded so far.
What they're saying: Some lawmakers are concerned that urban hospitals have taken advantage of the ability to reclassify themselves as rural to gain more residency slots.
- "We must close the loopholes in statutes that allow hospitals to play both sides of the coin," Rep. Greg Murphy (R-N.C.), co-chair of the House Republican Doctors Caucus, said in a statement to Axios.
- In an October letter to CMS, Murphy questioned how the agency has prioritized rural hospitals in its residency slot allocation this year. He said he hasn't gotten a response.
- NRHA wants the law changed so reclassified urban hospitals no longer qualify for the 10% rural residency slot allotment, said Cochran-McClain.
- The next-best option, she said, would be to require reclassified hospitals receiving new slots to incorporate rural training.
- "Large urban hospitals have their own challenges, and they do some great work when it comes to training," she said. "But we really feel like rural training done under the rural training umbrella should occur in a rural area."
Zoom out: The entire country is facing a physician shortage, though it's more acute in some areas.
- "There's a real need to increase training beyond what your traditional teaching hospitals are able to absorb," said Andrea Bazakas, who advises hospitals on medical education policy.
Go deeper: What rural hospitals want from Washington
