The American Hospital Association (AHA) has filed an amicus ('friend of the court') brief in the pending Supreme Court Case Mayo Foundation for Medical Education and Research v. the United States. The AHA is asking the Supreme Court to invalidate an Internal Revenue Service rule that excludes medical residents from the Social Security tax student exemption. Medical residents are excluded on the basis of performing 40 hours a week of supervised patient care. The petitioner Mayo Foundation is challenging the law.

In its brief, the AHA states that the amount of Social Security taxes levied against medical residents each year is estimated to be approximately $700 million. In April of 2005, the Treasury Department had amended regulations to exclude medical residents from the student exemption.

The brief points out that on occasion, when teaching hospitals have previously litigated the issue of medical residents being considered students, courts have for the most part supported the hospitals' position. The amended regulation, therefore, is "based upon an arbitrary and immaterial fact." The result is to divert already "scarce resources of our country's teaching hospitals and medical schools from their crucial missions of patient care, physician training, and medical research."

The brief goes on to describe the necessary role of teaching hospitals as a safety net for the growing population of indigent patients due to the depressed economy, to provide community programs, offer specialized services unavailable elsewhere, and engage in research and innovation. These services, already strained by the economy, would be further threatened by the tax that the AHA says is contrary to congressional intent.

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