I have not heard this and I doubt that it is true. DMU has traditional had the highest pass rate and it varies from year to year but is not 100% every time. So I doubt that TUSPM would kick out that many students each year.
I know at CPMS and NYCPM that you must pass part I of the boards to advance into your 4th year. I know that Dr. Yoho was going to take that to the council of deans and try to have universal ruling. I'm not sure if that has passed. But in a recent conversation with a clinician here we discussed how some schools pass students that can never practice podiatric medicine b/c they are not able to pass part I of the boards. Even if you passed II and III you need part I to be licensed.