Stanislaus County program for MD training should qualify for funding

Stanislaus County has achieved a breakthrough in talks with federal officials over the future of all-important physician training in the county, officials said Monday.

It's the most positive development since county officials learned last year that the Centers for Medicare and Medicaid Services was cutting off funding for the Family Medicine Residency Program.

That decision cut the air supply for the well-regarded training program and posed a serious threat to a county health system serving as many as 80,000 medically underserved patients a year.

But CMS issued updated rules Friday that should pave the way for a newly designed residency program to qualify for graduate medical education funding, said Rep. Dennis Cardoza, D-Merced, in a joint announcement with Rep. George Radanovich, R-Mariposa.

"It is my understanding that it provides the latitude for the residency program going forward," said Rick Robinson, county chief executive officer. Under the updated rules, the newly formed Valley Consortium for Medical Education should be able to establish the program without replacing the director, faculty, residents or staff, he said.

The county and Doctors Medical Center stepped in to fund the program through June 2010 while seeking a compromise with CMS. The redesigned program could be eligible for federal funding in July.

Robinson said the county received help from Cardoza, Radanovich, Sens. Dianne Feinstein and Barbara Boxer, and Kathleen Sebelius, secretary of health and human services.

"This was an absolutely crucial situation to resolve," Cardoza said, giving credit to President Barack Obama's administration over CMS. Sebelius, a former Kansas governor and Obama appointee, "told me she was going to personally look at this, because she knows how important the training is in physician-shortage areas like ours," he said.

Since 1975, the county residency program has trained medical school graduates to become primary care physicians. About one-third of the 223 doctors who completed the three-year program practice in Stanislaus County.

Besides attracting physicians to the area, the residents and faculty members provide health care for uninsured patients in the six county health clinics and at DMC.

The residency program continued to receive federal funding for more than 10 years after it moved to DMC after the closure of Stanislaus Medical Center in 1997.

But CMS officials determined that an administrative contractor had approved the payments in error and earlier this year required the county and DMC to repay $19.1 million in funding.

CMS said the residency program no longer was eligible for funding after the county hospital closed, but suggested that a new program could be developed to allow it to qualify for funding. County officials were floored when CMS said the new program needed a new director and faculty members, as well as new residents.

In May, the county formed a consortium with DMC and Memorial Medical Center to oversee development of a new program. Last month, a proposal was sent to the Accreditation Council for Graduate Medical Education.

Under the plan, Memorial, DMC and possibly other hospitals will serve as training sites, some residents will be graduates of osteopathic medical schools, and there will be 10 residents per class instead of nine. The program could be expanded to offer specialized training in surgery, internal medicine or emergency medicine.

The accreditation council plans a visit in September to review the proposal. It has to recognize the program before funding is approved.

The updated regulations issued last week clarify the rules for starting residencies and dealing with a cap on training slots in the Balanced Budget Act of 1997.

DMC continues a separate appeal to return $19.1 million to local coffers.

The breakthrough was a relief for the 27 current residents, who were depending on local funding to allow them to complete their training, said Jerry Chastain, one of the two chief residents.

"We are definitely pleased with the outcome," he said. "We want to keep a program that looks alive and well so we can continue to attract good physicians."

Bee staff writer Ken Carlson can be reached at or 578-2321.