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* * * [UDRS] have been established to provide for that
respective direct employment of the medical and dental
residents and fellows.
The Consolidation Contract allocates responsibility among
the Schools, the hospitals, the Consortium, and petitioners. It
provides that, commencing July 1, 1991, all residents enrolled in
academic medical programs administered by the Consortium “shall
become employed by” UMRS, and all residents enrolled in academic
dental programs administered by the Consortium “shall become
employed by” UDRS. It further provides that the affiliated
teaching hospitals would contract with petitioners for the
provision of residents. Petitioners serve only the Schools and
the affiliated teaching hospitals, each of which is a tax-exempt
organization qualified under section 501(c)(3).
Under the Consolidation Contract, the Schools and the
hospitals follow specific procedures with respect to the
allocation of residents. The program directors at each of the
teaching hospitals project their hospital's needs for residents
and communicate that estimate to the Consortium. Applicants for
residency positions submit an application to the Consortium. The
Schools, the Consortium, and the teaching hospitals then select
residents to meet each hospital's needs and communicate that
selection to UMRS (in the case of medical residents) or UDRS (in
the case of dental residents). Thereafter, a certificate of
residency is issued by the Consortium, and the resident is
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