When all is said and done, the hospital gets paid about $25,000 in direct GME and $50,000 in indirect GME per resident. It costs about $15 billion per year to train residents in the United States. Overall, Medicare spends about $3 billion on direct GME and $7 billion in indirect GME per year.
Full Answer
How are Medicare DGME payments paid to teaching hospitals?
The amount of Medicare DGME payments a teaching hospital receives is based on historic costs and is related to the share of the hospital’s inpatients who are Medicare beneficiaries. All Medicare payments for DGME are paid directly to hospitals that train residents; none are made to the residents themselves.
Which specialty hospitals are eligible for Medicare DGME?
Specialty hospitals with GME programs—including children's hospitals, psychiatric facilities, rehabilitation hospitals, long-term care hospitals, and critical access hospitals—are eligible for Medicare DGME payments under the same rules as acute care teaching hospitals.
What are GME payments for Medicare?
Medicare GME payments are based on statutory formulas that were developed at a time when hospitals were the central—if not exclusive—site for physician training. The rules continue to reflect that era. GME monies are distributed primarily to teaching hospitals, which in turn have fiduciary control over the funds.
How much do Medicare and Medicaid pay for graduate medical education?
Perhaps even fewer people realize that two federal programs—Medicare and Medicaid—distribute an estimated $12 to 14 billion each year to support teaching hospitals and other training sites that provide graduate medical education (GME).
How is Dgme calculated?
Medicare direct GME payments are calculated by multiplying the PRA times the weighted number of full-time equivalent (FTE) residents working in all areas of the hospital (and non-hospital sites, when applicable), and the hospital's Medicare share of total inpatient days.
What are Dgme payments based on?
DGME payments are based on a hospital-specific per resident payment (PRA) amount that accounts for the hospital's direct graduate medical education program costs, e.g. resident/fellow salary and benefits, teaching physician costs, other programmatic costs, etc., incurred in the PRA base year.
How is GME funding allocated?
Available funds are allocated to individual hospitals based on the Medicare GME payment formulae (HRSA Bureau of Health Professions, 2011). There are separate DGME and IME funding streams: DGME payments cover the direct cost of GME such as stipends and benefits for residents and faculty.
Does Medicare pay for GME?
Medicare pays separately for direct and indirect GME costs. Medicare payments for direct costs of GME are called Direct Graduate Medical Education (DGME) payments.
How are teaching hospitals typically reimbursed?
How are teaching hospitals typically reimbursed? Rationale: For teaching hospitals, the services of the resident are typically paid through Direct Graduate Medical Education (DGME) and Indirect Medical Education (IME) payment or reasonable cost payments made by the Part A MAC.
How is IME payment calculated?
The additional payment is based on the IME adjustment factor. The IME adjustment factor is calculated using a hospital's ratio of residents to beds, which is represented as r, and a multiplier, which is represented as c, in the following equation: c x [(1 + r). 405 - 1]. The multiplier c is set by Congress.
What is GME Medicare?
• Direct GME (DGME) is the amount. Medicare pays the hospital for Medicare's. share of the direct cost of the residency. – Resident salaries, faculty teaching, administration, building maintenance, personnel, etc.
On what grounds have middle class Americans generally opposed proposals for a national health insurance program?
Healthcare is financed through government-mandated contributions by employers and employees. On what grounds have middle-class Americans generally opposed proposals for a national health insurance program? Higher taxes.
How is medical education funded in the US?
Sources of funds include federal and state governments, families or individuals that pay tuition, insurance companies that pay for patient care, and philanthropy. Organizations involved in medical education include medical schools and numerous patient care sites in which students gain clinical experience.
How do residency programs make money?
The training of residents is funded by GME payments made to hospitals and health systems, largely through Medicare and Medicaid.
What is IME funding?
The indirect medical education (IME) and disproportionate share hospital (DSH) adjustments to Medicare's prospective payment rates for inpatient services are generally intended to compensate hospitals for patient care costs related to teaching activities and care of low income populations.
What is residency cap?
The limitation in funding has essentially put a cap on the number of residencies that can take place in the United States – and since a doctor cannot go into practice without a residency, this is essentially a cap on the number of new, American-trained physicians who are allowed to practice in this country.
Do children's hospitals receive Medicare?
Because children’s hospitals treat few Medicare patients, they receive very little funding from the Medicare program for their GME expenses. However, these hospitals are eligible to receive payments through the Children’s Hospitals GME (CHGME) Payment Program, which is funded by Congress through general federal appropriations dollars and administered by the Health Resources and Services Administration. This program generally follows the Medicare rules for counting residents and setting caps on the number of funded positions. More information on the CHGME program is available
Does a hospital count bench research?
For DGME payments, a hospital may count the time a resident spends performing research, including bench research, as long as the research takes place in the hospital and is part of an approved training program. For IME payments, a hospital may only count the time a resident spends performing clinical research that is associated with the treatment or diagnosis of a particular patient.
Researchers suggest that a cap on per-resident funding could rechannel money toward community-based physician training
Capping Medicare Graduate Medical Education funding at $150,000 per resident could free nearly $1.3 billion that could be used to alleviate physician shortages in underserved areas, a new study in JAMA Internal Medicine suggests.
Candice Chen, MD
John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.
KEY TAKEAWAYS
Medicare's current funding mechanisms for GME have resulted in some teaching hospitals – often in urban areas – receiving a disproportionate share of the money.
What is DGME in Medicare?
The Medicare program makes payments to teaching hospitals for a portion of these added costs through direct graduate medical education (DGME) payments. The DGME payment compensates teaching hospitals for "Medicare's share" of the costs directly related to the training of residents. DGME is paid on a per-resident amount as a separate pass-through ...
Does Medicare pay for inpatient PPS?
Medicare pays for the indirect costs involved in the training of residents. For each Medicare case paid under the inpatient PPS, a teaching hospital receives an additional payment, calculated as a percentage add-on to the basic price per case.
How much higher is Medicare indirect?
The Medicare Payment Advisory Commission (MedPAC), a group that advises Congress, estimates that indirect payment levels may be $3.5 billion (~50%) higher than actual “indirect costs” (higher cost of care with teaching program)
What is a non hospital agreement?
Agreement is between hospital (which will claim resident) and non-hospital* site where resident will spend time caring for patients under supervision of physician as part of the resident’s formal curriculum. Both parties assert that hospital is paying 100% of resident salaries and benefits for all residents’ time in non-hospital site
Can a hospital claim a resident?
A hospital HAS TO claim any resident who is providing care as part of planned rotation even if the hospital has no costs or doesn’t want to claim the resident.
What is a resident in GME?
An individual who participates in an approved GME Program or a physician who is not in an approved GME Program, but who is authorized to practice only in a hospital setting (for example, has a temporary or restricted license or is an unlicensed graduate of a foreign medical school). For DGME and IME payment purposes, a resident means an intern, resident, or fellow who is formally accepted, enrolled, and participating in an approved medical residency program including programs in osteopathy, dentistry, and podiatry as required to become certified by the appropriate specialty board.
What is a GME exception?
An exception within an approved GME Program that applies to limited situations when the resident is the primary caregiver and the faculty physician sees the patient only in a consultative role ( that is, those residency programs with requirements that are incompatible with a physical presence requirement). In such programs, it is beneficial for the resident to see patients without supervision to learn medical decision making.
What is a MAC provider?
Any provider, hospital-based provider, or nonprovider setting where the MAC pays for the services of residents under the DGME payment methodology or on a reasonable cost basis to freestanding Skilled Nursing Facilities or Home Health Agencies.
Can you document a physician's services?
Both you and residents may document physician services in the patient’s medical record. The documentation must be dated and contain a legible signature or identity and may be completed using one of these methods:
When did CMS limit GME funding?
CMS had no spending limits for GME spending, until the Balanced Budget Act of 1997. With that act, Congress capped the number of residents that would be paid for under DGME funding. 4 Multiple presidential budgets have come out since then, some asking for increasing GME funding and some asking to limit GME funding.
Who controls IME and DGME?
Both DGME and IME payments are controlled by Medicare, which means the Centers for Medicare and Medicaid Services (CMS) essentially controls GME funding. DGME helps to pay for direct teaching costs (eg, resident salaries and benefits, faculty). IME funds are more nuanced.
What does GME mean?
In simple terms, GME means residency and fellowship. This is an easy distinction for us to make but, to the general public, this is often a point of confusion. GME is funded by multiple mechanisms, including federal, state, and private entities, with the federal government being by far the largest contributor to GME funding. ...
How many residents does the THCGME program support?
This is one of the few opportunities to increase GME funding outside of direct Medicare-supported positions. The THCGME Program currently supports 728 residents and has the added benefit ...
When did GME start?
The History of GME Funding. GME funding has a long history that goes back to the early 1900s. Back then, training institutions and hospitals paid their own money to train residents. In 1965 when Congress created Medicare, they knew that an increase in health coverage would require a concordant increase in physicians that could not be solely ...
What is the Resident Physician Shortage Reduction Act?
The “Resident Physician Shortage Reduction Act of 2019” (S.348) is a bill that has been discussed among Congressional leadership for multiple years but has recently found new life. This bill, sponsored by Sen. Robert Menendez (D-NJ), would increase GME slots by 15,000 over a 5-year period.
Can GME be taken off the gas?
GME advocates cannot afford to take the foot off the gas even for a single Congressional cycle. If physicians and students fail to show up and fight for GME funding, then Congress will rightfully assume the issue is not important and can be sacrificed when the next budget season rolls around.
How much do resident physicians make?
This salary is about $50,000 per year.
Do hospital residents get time off?
They would generally live in the hospital, thus the term “resident.”. They would rarely get time off but they would usually be fed and have their uniforms and malpractice insurance premiums paid for by the hospital.
Do Veterans Administration hospitals receive Medicare?
Veterans Administration Hospitals also provide funding for residents in their hospitals. Teaching hospitals also receive an Indirect Medical Education (IME) payment from Medicare for the increased medical costs associated with treating more complex patients.