Three themes in contemporary medical practice bode ill for physicians who continue to participate in illegally managed teaching programs. The first is the growing reluctance of medical malpractice insurers to continue to insure physicians who have preventable claims against them. If a physician’s insurer pays off on a case involving an improperly supervised student, the physician may have difficulty in renewing the policy or in obtaining coverage from another insurer.

Second, with the demise of charitable immunity and the growth of formal risk management and quality assurance programs, hospitals are demanding that physicians supervise the care of their patients personally. Third, outside pressures are increasing the enforcement of the laws governing the supervision of nonphysician personnel. The driving force behind this enforcement has been the Medicare/Medicaid programs. Physicians who bill for work performed by students and residents violate the federal law against fraud and abuse. Private insurance companies are increasing their supervision of billing practices associated with teaching programs. The growing concern among politicians about the illicit use of drugs will result in more vigorous enforcement of the rules on who may write prescriptions and dispense drugs.

It is not necessary to deceive patients to persuade them to participate in teaching programs. Many patients enjoy having students involved in their care. The students generally have much more time to spend with an individual patient than do either the residents or the attending physician. Medical schools that have been forced to adopt rigid policies of disclosure to patients have not seen the students driven from their hospitals.

In the past, properly supervising medical students and residents was more expensive than not supervising them. This is changing, however, as the federal government and third-party payers become more reluctant to pay for student work. An institution that is subject to an enforcement action for fraud can see its revenue stream from the federal government frozen for months or years. The physicians who are personally accused of fraud must expend tens of thousands of dollars of their own funds on defense lawyers because these actions are not covered under medical malpractice insurance. If the defense is not successful, the physician is subject to large fines, loss of licensure, and imprisonment.