Georgia Medicare Graduate Medical Education 2026 Guide

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By Brevy Care Team · Last verified May 13, 2026

Every year, approximately 2,000 physicians-in-training (residents and fellows) provide patient care at Georgia teaching hospitals while completing the multi-year post-medical-school training required to become licensed physicians. They staff overnight shifts at Grady Memorial Hospital in Atlanta. They run morning rounds at Emory University Hospital. They learn cardiothoracic surgery at AU Medical Center in Augusta. They deliver babies at Memorial Health Savannah. They evaluate pediatric emergencies at Children's Healthcare of Atlanta. They take their first-call clinic at Atrium Health Navicent in Macon. They train in rural Georgia communities under Mercer University School of Medicine's rural track. They serve Atlanta's underserved populations under Morehouse School of Medicine's mission.

The cost of training these residents is largely borne by Medicare. Through two distinct payment streams, Section 1886(h) of the Social Security Act (Direct Graduate Medical Education, or DGME) and Section 1886(d)(5)(B) (Indirect Medical Education, or IME) adjustment, Medicare provides approximately $16 billion annually nationwide to teaching hospitals to support residency training. For Georgia teaching hospitals, Medicare GME payments are measured in tens of millions of dollars per institution annually. They are critical to the financial viability of teaching activity, the recruitment of supervising faculty, and the operation of residency programs.

The framework is also constrained. The Balanced Budget Act of 1997 capped each teaching hospital's Medicare-funded resident counts at the hospital's 1996 level, freezing the residency workforce pipeline at a moment in time. For 25 years, the cap remained largely unchanged despite growing US population, growing medical school output, and persistent physician workforce shortages, particularly in primary care, rural areas, and psychiatry. The Consolidated Appropriations Act 2021 (Section 126, Public Law 116-260) added 1,000 new Medicare-funded slots distributed over FY 2023-FY 2027 with rural and HPSA targeting. The CAA 2023 (Section 4122, Public Law 117-328) added 200 more slots, with at least 100 dedicated to psychiatry.

For Georgia specifically, Medicare GME interacts with Georgia's five medical schools (Emory University School of Medicine, Medical College of Georgia at Augusta University, Mercer University School of Medicine, Morehouse School of Medicine, and Philadelphia College of Osteopathic Medicine Georgia) and dozens of teaching hospitals to train the next generation of physicians. This guide explains the GME framework, the DGME and IME calculations, the cap and slot system, the recent CAA expansions, and how Georgia institutions participate. :::

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Key takeaways for Georgia teaching hospitals, residents, and Medicare beneficiaries

1. Medicare funds resident training through two payment streams. Direct Graduate Medical Education (DGME) under Section 1886(h) and the Indirect Medical Education (IME) adjustment under Section 1886(d)(5)(B).

2. DGME pays resident salaries and supervising physician costs. Calculated as Per Resident Amount (PRA) times approved FTE residents times Medicare's share of patient days.

3. IME is an upward adjustment to IPPS payments. Reflects the higher operating costs of teaching hospitals. Approximately 5.5 percent additional payment per 0.1 increase in resident-to-bed ratio.

4. The BBA 1997 capped each teaching hospital at 1996 resident counts. This froze the residency pipeline at 1996 levels for 25 years until recent expansions.

5. The CAA 2021 added 1,000 new Medicare-funded slots. Distributed over FY 2023-FY 2027 (200 per year) with at least 10 percent each for rural, over-cap, new medical school state, and HPSA-serving hospitals.

6. The CAA 2023 added 200 more slots. At least 100 dedicated to psychiatry and psychiatric subspecialties.

7. Residents in Initial Residency Period count at 1.0 FTE; beyond IRP at 0.5 FTE. Initial Residency Period varies by specialty: 3 years internal medicine, 5 years general surgery, etc.

8. Georgia has five medical schools. Emory, MCG at Augusta University, Mercer, Morehouse, and PCOM Georgia.

9. Major Georgia teaching hospitals include Grady, Emory hospitals, AU Medical Center, Memorial Savannah, Atrium Navicent, Children's Healthcare of Atlanta, and Atlanta VA. Approximately 2,000+ resident FTEs in Georgia.

10. The Teaching Health Center GME program funds ambulatory training. Section 340H PHSA. Administered by HRSA. Funds primary care residencies at FQHCs and other community settings. :::

The statute: Section 1886(h) Direct GME

Section 1886(h) of the Social Security Act, enacted as part of the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA, Public Law 97-248), authorizes Medicare to pay teaching hospitals for the direct costs of resident training. The "direct" GME costs include:

• Resident salaries and fringe benefits
• Supervising physician compensation for time spent supervising residents (not for clinical services to patients)
• Allocable institutional overhead (program director compensation, residency office administration, accreditation fees, etc.)
• Related teaching costs

Why Medicare pays for resident training

The rationale for Medicare GME has been debated since the program began. Major rationales:

• Teaching hospitals provide critical care to Medicare beneficiaries; resident training is integral to this care
• Medicare benefits from a well-trained physician workforce
• Without GME funding, teaching hospitals would face financial pressure that could compromise their teaching mission or patient care
• Resident training has positive externalities (the trained physicians benefit the entire healthcare system, not just the teaching hospital)

Critics have argued at various points that Medicare's GME role should be reduced or restructured (e.g., through workforce-targeted funding, all-payer GME pool, or other mechanisms). Reform proposals have not been enacted.

Statutory structure

Section 1886(h) provides:

• General payment authority (1886(h)(1))
• Per Resident Amount methodology (1886(h)(2))
• Approved resident count (1886(h)(3))
• Counting rules including non-provider settings (1886(h)(4))
• Cap framework (added by BBA 1997)
• Various adjustment provisions

The DGME calculation: Per Resident Amount × Approved Residents × Medicare's Share

DGME payment for a teaching hospital in a given cost reporting period is:

DGME Payment = Per Resident Amount (PRA) × Approved FTE Resident Count × Medicare's Share

Per Resident Amount (PRA)

Each teaching hospital has a hospital-specific PRA. The PRA was originally established in 1984 based on the hospital's actual cost per resident in its cost report covering fiscal year 1984. The PRA has been updated annually using the Consumer Price Index for Urban consumers (CPI-U) since then.

PRAs vary substantially across hospitals because:

• 1984 base costs varied widely (different local labor markets, different program mix, different overhead structures)
• The CPI-U update applies uniformly but compounds different bases
• A few hospitals have had subsequent PRA adjustments

In 2026, PRAs at major US teaching hospitals range roughly from $100,000 to $200,000 per resident. Georgia hospitals' PRAs fall within this range, with the major academic medical centers (Emory, AU Medical, Grady) typically in the middle-to-upper portion of the range.

Approved FTE Resident Count

The number of residents the hospital is allowed to count for DGME purposes. Determined using:

• Three-year rolling average of FTE residents
• FTE based on time spent in approved training (residents working less than full time count fractionally)
• Initial Residency Period (IRP) residents at 1.0; beyond IRP at 0.5
• Approved non-provider setting time counted under Section 5505 conditions
• Cap at BBA 1997 1996 levels (subject to adjustments)

Medicare's Share

The portion of the hospital's inpatient days attributable to Medicare patients. Calculated as Medicare days divided by total days, with some adjustments. For most teaching hospitals, Medicare's share runs roughly 25-50 percent depending on patient mix.

Worked DGME calculation

A teaching hospital with:

• PRA: $135,000
• Approved FTE residents: 200
• Medicare share: 35%

DGME = $135,000 × 200 × 0.35 = $9,450,000 annually

For a major academic medical center with 500+ residents, DGME payments easily exceed $25 million annually.

The IME adjustment: Section 1886(d)(5)(B)

The Indirect Medical Education (IME) adjustment is a percentage increase to each Inpatient Prospective Payment System (IPPS) payment at a teaching hospital. The adjustment reflects the higher operating costs associated with teaching activity:

• Longer average length of stay (residents may order more tests, work less efficiently than fully trained physicians)
• More diagnostic testing
• More complex case mix
• More resource-intensive care delivery
• Higher overhead for academic activities

IME formula

The IME multiplier is calculated:

IME Multiplier = c × {[(1 + IRB)^0.405] - 1}

Where:

• c = the IME factor (currently approximately 1.35 for typical hospitals; varies based on year and policy adjustments)
• IRB = Intern/Resident-to-Bed ratio (resident FTE divided by available bed count)

Practical magnitude

The IME multiplier translates roughly to 5.5 percent additional payment per 0.1 increase in resident-to-bed ratio. For typical academic medical centers:

• Community teaching hospital, IRB ~0.1: IME ~5.5%
• Standard academic medical center, IRB ~0.25: IME ~13.5%
• Large academic medical center, IRB ~0.40: IME ~21.5%
• Very large academic medical center, IRB ~0.60: IME ~29.5%

Aggregate IME payments

For a large academic medical center with $200 million in annual base IPPS payments and a 20 percent IME multiplier, IME adjustment adds approximately $40 million annually.

Combined DGME and IME

Major Georgia academic medical centers receive combined DGME and IME payments in the range of:

• Grady Memorial Hospital: $50-100 million annually
• Emory University Hospital: $40-80 million annually
• Emory University Hospital Midtown: $20-40 million annually
• AU Medical Center: $30-60 million annually
• Memorial Health Savannah: $15-30 million annually
• Atrium Health Navicent: $15-30 million annually
• Atlanta VA Medical Center: separate VA system

(Exact amounts vary by year and depend on resident counts, Medicare share, case mix, and other factors. The figures above are illustrative ranges.)

The BBA 1997 cap

Section 4621 of the Balanced Budget Act of 1997 (Public Law 105-33), enacted by President Clinton in August 1997, capped each teaching hospital's Medicare-funded resident counts at the hospital's 1996 level. The cap applies separately to:

• DGME approved resident count
• IME resident count (with somewhat different calculation rules)

Rationale for the cap

At the time of BBA 1997, policymakers were concerned about:

• A perceived oversupply of physicians (the conventional wisdom of the 1990s)
• High Medicare GME spending growth
• A desire to control entitlement spending broadly

The cap was intended to control spending and freeze the physician supply at what was then thought to be an adequate or excessive level.

Consequences of the cap

The 1990s physician oversupply concern proved incorrect. The 2000s and 2010s saw growing concerns about physician shortages, particularly:

• Primary care (despite ACA efforts to expand)
• Rural areas (Georgia rural counties have substantial physician shortages)
• Psychiatry (the mental health workforce crisis)
• Geriatrics (despite aging population)
• General surgery in rural areas

US allopathic medical schools expanded enrollment significantly in the 2000s and 2010s. Osteopathic medical schools also grew. Total US medical school graduates increased from about 17,000 annually in 2000 to over 22,000 by 2020. But Medicare-funded residency slots remained largely capped, creating a "GME bottleneck."

Cap-exempt hospitals

A small number of hospitals are not subject to the BBA cap because they established residency programs after 1996. They have a 5-year window to develop their cap based on actual resident counts.

Cap adjustments

Limited adjustments to the cap have been possible:

• ACA Section 5503: Redistribution of unused slots from hospitals not using full caps
• CAA 2021 Section 126: 1,000 new slots
• CAA 2023 Section 4122: 200 additional slots
• Various specialty-specific or hospital-specific provisions

The Initial Residency Period (IRP)

The Initial Residency Period is the minimum length of training for the resident's first board-eligible specialty. Examples:

Residents in the IRP are counted at 1.0 FTE for DGME and IME purposes. Residents beyond the IRP (fellows, subspecialty trainees, additional residency in different specialty) are counted at 0.5 FTE.

Rationale

The IRP framework aligns Medicare funding with the basic specialty training period. Subspecialty training is partially supported (at 0.5 FTE) but at reduced level. Critics have argued that this framework underfunds critical subspecialty training (cardiology, oncology, surgical subspecialties) and creates financial incentives away from subspecialization. Defenders argue that Medicare's primary role is basic specialty training; subspecialty training should be otherwise funded.

Practical example

A teaching hospital with:

• 100 internal medicine residents (3-year IRP)
• 30 cardiology fellows (beyond IRP)
• 25 hematology/oncology fellows (beyond IRP)

For DGME counting:

• IM residents: 100 × 1.0 = 100 FTE
• Cardiology fellows: 30 × 0.5 = 15 FTE
• Heme/onc fellows: 25 × 0.5 = 12.5 FTE
• Total counted: 127.5 FTE

(Subject to cap.)

The three-year rolling average

DGME resident counts use a three-year rolling average of FTE residents. This helps smooth year-to-year variability that can arise from:

• Class size changes
• Resident attrition
• Match cycle timing
• Maternity/leave periods

For a hospital with 100 internal medicine FTEs in 2024, 102 in 2025, and 98 in 2026, the 2026 counted FTE is the average: 100. This provides budgeting predictability.

Counting residents in non-provider settings

A challenge for primary care residencies (and increasingly other specialties) is that substantial training occurs in ambulatory settings outside the hospital: physician offices, community clinics, FQHCs, urgent care centers, etc. Whether and how to count this time has been the subject of evolving rules.

Original 1965-2010 framework

Originally, time in non-provider settings was generally not counted for DGME unless the hospital paid all costs of the resident's time (an "all-or-nothing" framework). This created barriers to ambulatory training.

ACA Section 5505 (2010)

Allowed teaching hospitals to count resident time in non-provider settings when:

• The hospital pays the resident's salary during the non-provider time
• The hospital has a written agreement with the non-provider entity
• The non-provider entity is an approved training site
• Specific recordkeeping requirements are met

Impact on Georgia primary care training

Primary care residency programs (family medicine, internal medicine, pediatrics) at Georgia teaching hospitals can now more readily count substantial ambulatory training. This supports the development of true ambulatory-focused training that better prepares residents for outpatient practice.

ACA Section 5503: Slot redistribution

Section 5503 of the Affordable Care Act of 2010 (Public Law 111-148) permitted CMS to redistribute up to 65 percent of unused Medicare-funded resident slots from hospitals not using their full caps to other hospitals.

Process

CMS identified hospitals with cap room (more cap than actual residents). CMS then distributed slots to other hospitals based on:

• Priority for primary care and general surgery
• Priority for hospitals in states with low resident-to-population ratios
• Rural hospital priority
• Demonstrated need and capacity

Approximately 600 slots were redistributed under Section 5503.

Georgia impact

Several Georgia hospitals received redistributed slots, expanding their residency capacity within the prior cap framework.

CAA 2021 Section 126: 1,000 new Medicare-funded slots

The Consolidated Appropriations Act 2021 (Public Law 116-260) Section 126 added 1,000 new Medicare-funded residency slots distributed over FY 2023-FY 2027 (200 per year).

Statutory distribution criteria

At least:

• 10% for hospitals in rural areas
• 10% for hospitals over their existing cap
• 10% for hospitals in states with new medical schools or branch campuses
• 10% for hospitals serving Health Professional Shortage Areas (HPSAs)

CMS allocates the remaining slots based on additional criteria established in rulemaking.

CMS implementation

CMS finalized implementation rules in the FY 2023 IPPS rulemaking. Hospitals apply annually for slots. CMS evaluates applications and announces awards.

FY 2023 first round (January 2023)

First round of 200 slots distributed. Awards covered hospitals in multiple states across diverse specialties with emphasis on primary care, psychiatry, and surgical specialties in rural areas.

Subsequent rounds

FY 2024 round: 200 additional slots distributed FY 2025 round: 200 additional slots distributed FY 2026 round: 200 additional slots being distributed FY 2027 round: 200 final slots will be distributed

By end of FY 2027, all 1,000 Section 126 slots will be distributed.

Georgia impact

Several Georgia teaching hospitals have applied for and received Section 126 slots. Specific Georgia recipients include hospitals serving rural HPSAs and hospitals with expansion plans for primary care and psychiatry training. Mercer-affiliated hospitals have been particular beneficiaries given Mercer's rural mission.

CAA 2023 Section 4122: 200 additional slots

The Consolidated Appropriations Act 2023 (Public Law 117-328) Section 4122 added 200 additional Medicare-funded residency slots with at least 100 dedicated to psychiatry and psychiatric subspecialties to address mental health workforce shortages.

Distribution

Distribution rolls out FY 2026-FY 2030 (40 slots per year, approximately).

Psychiatry focus

The CAA 2023 specifically targets psychiatry because of widely documented mental health workforce shortages. Georgia has substantial psychiatry shortages, particularly in rural areas and underserved urban areas.

Implementation

CMS finalized implementation rules. First awards beginning FY 2026.

Georgia expectations

Georgia teaching hospitals with psychiatry residency programs have applied for Section 4122 psychiatry slots. Expected Georgia awards in coming years.

The Teaching Health Center GME program

Authorized at Section 340H of the Public Health Service Act (42 USC 256h), the Teaching Health Center Graduate Medical Education (THCGME) program funds residency training at:

• Federally Qualified Health Centers (FQHCs)
• Community mental health centers
• Rural health clinics
• Tribal health programs
• Other ambulatory primary care settings

Administering agency

HRSA Bureau of Health Workforce.

Specialty focus

Primary care:

• Family medicine
• Internal medicine
• Pediatrics
• Obstetrics/gynecology
• Psychiatry
• General surgery
• General dentistry

Funding structure

Per-resident payment. Currently approximately $173,000 per resident annually (combining direct and indirect costs). This is comparable to Medicare DGME plus IME for a typical teaching hospital.

Program size

Approximately 800-900 residents trained annually nationwide.

Reauthorization

THCGME requires periodic reauthorization. Funded through multiple short-term extensions and appropriations vehicles. The program's permanence has been a concern but Congressional support has been bipartisan.

Georgia participation

Some Georgia FQHCs and ambulatory training settings participate in THCGME. Mercy Care, Albany Area Primary Health Care, and other Georgia FQHCs have explored or implemented THCGME-funded residency rotations.

HRSA Bureau of Health Workforce and related programs

National Health Service Corps (NHSC)

Provides loan repayment and scholarships to physicians, dentists, nurse practitioners, physician assistants, behavioral health providers, and others who agree to serve in Health Professional Shortage Areas.

Georgia has substantial NHSC participation:

• Rural Georgia primary care providers receive NHSC loan repayment
• FQHCs across Georgia recruit NHSC providers
• Mental health professionals in HPSAs receive NHSC support

NHSC commitment

NHSC participants typically commit to 2-4 years of service in an approved HPSA. After service, providers receive loan repayment (up to $50,000 or more depending on program and service length).

Title VII Workforce Programs

HRSA Title VII funds health professions training programs including:

• Primary care training programs
• Area Health Education Centers (AHECs)
• Centers of Excellence
• Faculty development programs

Children's Hospitals Graduate Medical Education program

Separate program providing GME funding to free-standing children's hospitals (which historically were not eligible for Medicare GME because they treated few Medicare patients).

Geriatric Workforce Enhancement Program

Funds training in geriatrics for primary care providers.

Section 332 HPSA designations and GME

Health Professional Shortage Area (HPSA) designations under Section 332 of the Public Health Service Act identify areas with:

• Primary care professional shortages
• Dental care shortages
• Mental health professional shortages

HPSA scoring

HRSA scores HPSAs from 1-25 based on:

• Provider-to-population ratio
• Percentage of population at or below 100% federal poverty level
• Percentage of population 65 and over
• Infant health indicators
• Geographic access
• Other indicators of need

Georgia HPSAs

Georgia has substantial HPSA coverage:

• Most rural Georgia counties are designated HPSAs in primary care
• Many rural counties have dental and mental health HPSAs
• Some metro Atlanta census tracts and underserved neighborhoods are HPSAs
• Mental health HPSAs are widespread

HPSA implications for GME

• Section 126 CAA 2021 slot priority for HPSA-serving hospitals
• NHSC loan repayment available in HPSAs
• Federal Tort Claims Act coverage for FQHC providers in HPSAs
• Various other federal programs target HPSAs

Georgia's five medical schools

Emory University School of Medicine (Atlanta)

• Private institution
• Established 1854
• Class size approximately 140 per year
• Major academic medical center
• Affiliated teaching hospitals: Emory University Hospital, Emory University Hospital Midtown, Grady Memorial Hospital (joint with Morehouse), Atlanta VA Medical Center, Children's Healthcare of Atlanta
• Substantial NIH research funding

Medical College of Georgia at Augusta University

• Public institution
• Established 1828 (oldest medical school in Georgia, second-oldest US public medical school)
• Class size approximately 240 per year (largest in Georgia)
• Affiliated teaching hospital: AU Medical Center
• Statewide campus expansion to Athens, Albany, Savannah, Rome

Mercer University School of Medicine (Macon)

• Private institution with public funding (state-affiliated)
• Established 1982
• Specific rural and primary care mission
• Class size approximately 120 per year
• Campuses: Macon (main), Savannah, Columbus
• Affiliated teaching hospitals: Atrium Health Navicent (Macon), Memorial Health Savannah, Piedmont Columbus Regional
• Rural training track specifically targets Georgia rural counties

Morehouse School of Medicine (Atlanta)

• Private institution, historically black college and university (HBCU)
• Established 1975
• Mission focused on training physicians for underserved communities
• Class size approximately 100 per year
• Affiliated teaching hospitals: Grady Memorial Hospital (joint with Emory)
• Substantial NIH and HRSA workforce funding

Philadelphia College of Osteopathic Medicine Georgia (Suwanee)

• Private osteopathic institution
• Established 2005
• Class size approximately 145 per year (DO students)
• Affiliated teaching hospitals: various community hospitals in metro Atlanta and surrounding areas

Combined output

Georgia medical schools collectively graduate approximately 750+ MD and DO students annually. A substantial fraction of these graduates enter residency programs in Georgia, contributing to Georgia's physician workforce pipeline.

Major Georgia teaching hospitals and residency programs

Grady Memorial Hospital (Atlanta)

• Largest teaching hospital in Georgia
• Joint Emory/Morehouse affiliation
• Level 1 trauma center
• Public safety-net hospital
• Approximately 800+ residents (Emory and Morehouse residents share Grady experience)
• Combined DGME, IME, DSH, 340B make Grady's federal payment streams enormous

Emory University Hospital (Atlanta)

• Emory's primary academic medical center
• Approximately 500+ residents
• Substantial DGME and IME

Emory University Hospital Midtown (Atlanta)

• Emory's secondary academic medical center
• Approximately 200+ residents
• DGME and IME participant

AU Medical Center (Augusta)

• Augusta University academic medical center
• MCG's primary teaching hospital
• Approximately 400+ residents
• Substantial DGME and IME

Memorial Health Savannah

• HCA-affiliated teaching hospital
• Mercer Savannah campus affiliation
• Approximately 150+ residents

Atrium Health Navicent (Macon)

• Mercer Macon primary teaching hospital
• Approximately 200+ residents
• Atrium Health system affiliation

Atlanta VA Medical Center

• VA teaching hospital
• Emory faculty appointments
• Substantial resident training (VA-funded, separate from Medicare GME)

Children's Healthcare of Atlanta

• Major pediatric teaching hospital
• Children's Hospitals GME program (HRSA-funded) plus Medicare GME for pediatric residents on inpatient rotations
• Emory pediatric residency primary site

Piedmont Columbus Regional

• Mercer Columbus campus affiliation
• Smaller residency footprint

Wellstar Kennestone (Marietta)

• Teaching hospital
• PCOM Georgia and other affiliations
• Growing residency footprint

Northeast Georgia Medical Center (Gainesville)

• Teaching hospital
• Mercer and PCOM affiliations

Other affiliated teaching hospitals

Various Georgia community hospitals have teaching affiliations and host resident rotations.

Worked example 1: Emory University Hospital GME finances

Emory University Hospital operates one of the largest residency programs in Georgia.

Resident counts: Approximately 500+ resident FTEs across multiple specialties including internal medicine, surgery, pediatrics, OB/GYN, neurology, psychiatry, and many subspecialties.

DGME calculation (illustrative):

• PRA: ~$130,000 per resident
• Approved FTE residents (after BBA cap and adjustments): ~450
• Medicare share: ~30%
• DGME: $130,000 × 450 × 0.30 = ~$17.5 million annually

IME calculation (illustrative):

• Resident-to-bed ratio: high (academic medical center)
• IME multiplier: 20%+
• Annual base IPPS payments: ~$300 million
• IME adjustment: $60+ million annually

Total Medicare GME at Emory University Hospital: $75+ million annually (illustrative; actual amounts vary by year and specific calculation factors)

Worked example 2: AU Medical Center academic medical center

AU Medical Center is Georgia's only state-supported academic medical center.

Resident counts: Approximately 400+ resident FTEs.

DGME (illustrative):

• PRA: ~$125,000
• Approved FTE: ~380
• Medicare share: ~35%
• DGME: $125,000 × 380 × 0.35 = ~$16.6 million annually

IME (illustrative):

• High resident-to-bed ratio
• IME multiplier: 18%+
• Base IPPS: ~$200 million
• IME: ~$36 million annually

Total: ~$53 million annually (illustrative)

Worked example 3: Grady Memorial Hospital safety-net teaching

Grady is the largest teaching hospital in Georgia with joint Emory/Morehouse affiliation.

Resident counts: Approximately 800+ resident FTEs (Emory and Morehouse residents share Grady).

DGME (illustrative):

• PRA: ~$120,000
• Approved FTE: ~700
• Medicare share: ~25% (Grady has high Medicaid and uninsured share, lower Medicare share)
• DGME: $120,000 × 700 × 0.25 = ~$21 million annually

IME (illustrative):

• Very high resident-to-bed ratio
• IME multiplier: 25%+
• Base IPPS: ~$150 million
• IME: ~$37 million annually

Plus DSH adjustment (Section 1886(d)(5)(F)): Substantial DSH payment given Grady's safety-net mission Plus 340B drug acquisition savings: $40-80+ million annually

Total federal financial support critical to Grady's safety-net mission.

Worked example 4: Mercer rural track

Mercer University School of Medicine operates a rural training track. Residents complete portions of training in rural Georgia hospitals and communities.

Structure: Residents are based at Atrium Navicent (Macon) or other primary teaching hospital, with rural rotations at community hospitals across south and central Georgia.

Funding: Primary teaching hospital receives Medicare DGME/IME. Rural rotation sites may have separate arrangements. Some rural sites participate in THCGME or HRSA workforce programs.

Workforce mission: Mercer's specific goal is to train physicians who will practice in rural Georgia. Outcomes show that Mercer rural-track graduates practice in rural Georgia at higher rates than other Georgia medical school graduates.

Worked example 5: Morehouse School of Medicine

Morehouse School of Medicine has a mission to train physicians for underserved communities. Joint affiliation with Grady provides substantial clinical training.

Resident training: Morehouse residents train at Grady alongside Emory residents. Both programs share Grady's patient population, which is predominantly low-income, uninsured, and from communities of color.

Workforce outcomes: Morehouse graduates practice in underserved settings at higher rates than national averages.

GME funding: Morehouse residents are counted in Grady's resident count for DGME/IME purposes (subject to joint affiliation arrangements between Emory and Morehouse).

Worked example 6: CAA 2021 Section 126 slot award

A Georgia rural teaching hospital (illustrative) received Section 126 slots in the FY 2023 round.

Pre-award status: The hospital operated a small internal medicine residency at its 1996 BBA cap. The cap had constrained the program's growth despite community demand.

Section 126 application: The hospital applied for 5 new slots emphasizing rural HPSA service and primary care expansion.

Award: CMS awarded 3 new slots.

Impact: The hospital expanded its internal medicine program from 9 to 12 residents (across the 3-year IRP). Three additional residents annually provide clinical service and represent future Georgia rural physician workforce.

Financial impact: Three additional FTE residents generate approximately $400,000-$600,000 in additional DGME and IME payments annually (depending on the hospital's PRA, Medicare share, and IRB).

Common GME compliance and program issues

Error 1: Misclassification of resident time as inpatient vs outpatient DGME and IME use different denominators. Inpatient time at the teaching hospital is counted differently from outpatient time, especially at non-provider settings.

Error 2: Counting time outside approved training Resident time spent on activities not part of approved training (research, clinical practice outside the training program) is not countable.

Error 3: Cap noncompliance Counting residents above the BBA 1997 cap (or post-cap-adjustment level) results in disallowed costs.

Error 4: IRP misclassification Residents beyond their Initial Residency Period should be counted at 0.5 FTE. Counting at 1.0 results in overpayment.

Error 5: Non-provider setting documentation gaps ACA Section 5505 requires specific documentation for non-provider setting time counting. Gaps result in disallowed cost.

Error 6: Allocable supervising physician costs DGME supports supervising physician time for direct teaching. Time spent on patient care (billed under PFS) is not GME-allocable. Time split-coding must be careful.

Error 7: Per Resident Amount disputes Some hospitals have disputed PRA calculations. Subsequent adjustments to PRA must be documented and CMS-approved.

Error 8: Three-year rolling average errors The rolling average calculation has specific rules. Errors compound over years.

Error 9: Cap-exempt status loss Hospitals with new programs have a 5-year window to develop cap. After 5 years, the cap is fixed. Errors in tracking this window can result in cap losses.

Error 10: IME and DGME counting differences IME and DGME use slightly different resident counting rules. Confusion between the two can result in errors.

Error 11: ACGME accreditation lapses GME funding requires ACGME-accredited programs. Program probation or loss of accreditation affects GME counting.

Error 12: Section 5503/126/4122 application errors Section 126 and 4122 applications have specific requirements. Errors result in non-award.

Error 13: VA resident counting VA residents are funded by VA, not Medicare GME. Some training is split with non-VA teaching hospitals. Counting requires care.

Error 14: Children's hospital GME interaction Free-standing children's hospitals have a separate HRSA GME program. Interaction with Medicare GME for combined affiliations requires care.

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Frequently Asked Questions

What is Graduate Medical Education (GME)?

Graduate Medical Education is the formal training physicians complete after medical school. GME includes residency (typically 3-7 years depending on specialty) and fellowship (additional subspecialty training, typically 1-3 years). Medicare is the largest single funder of GME in the United States.

What is Section 1886(h) Direct GME?

Section 1886(h) of the Social Security Act authorizes Medicare to pay teaching hospitals for the direct costs of resident training: resident salaries and fringe benefits, supervising physician compensation, and program-related overhead. Payments are made through teaching hospital cost reports.

What is Section 1886(d)(5)(B) IME?

The Indirect Medical Education (IME) adjustment under Section 1886(d)(5)(B) is an upward adjustment to Medicare Inpatient Prospective Payment System (IPPS) payments at teaching hospitals. IME reflects the higher operating costs of teaching activity.

How is DGME calculated?

DGME = Per Resident Amount (PRA) × Approved FTE Resident Count × Medicare's Share. The PRA is hospital-specific, originally established in 1984 and updated annually with CPI-U.

How is IME calculated?

IME is a percentage multiplier applied to each IPPS payment. The multiplier uses the resident-to-bed ratio in a specific formula. Roughly 5.5 percent additional payment per 0.1 increase in resident-to-bed ratio.

What was the BBA 1997 resident cap?

The Balanced Budget Act of 1997 (Public Law 105-33) Section 4621 capped each teaching hospital's Medicare-funded resident counts at the hospital's 1996 level. The cap applies separately to DGME and IME.

Why did Congress cap the residents in 1997?

At the time, conventional wisdom held that the US had a physician oversupply. Congress capped Medicare GME spending to control entitlement growth and stabilize the physician workforce at what was thought to be an adequate level. The oversupply concern proved incorrect.

What is the Initial Residency Period?

The IRP is the minimum length of training for the resident's first board-eligible specialty. Examples: 3 years internal medicine, 5 years general surgery, 7 years neurosurgery. Residents in IRP count at 1.0 FTE; beyond IRP at 0.5 FTE for DGME/IME.

What does ACA Section 5503 do?

Section 5503 of the Affordable Care Act permitted CMS to redistribute up to 65% of unused resident slots from hospitals not using their full caps. Approximately 600 slots were redistributed.

What does ACA Section 5505 do?

Section 5505 allowed teaching hospitals to count resident time in non-provider settings (physician offices, clinics, FQHCs) under specific conditions. This expanded counting flexibility for primary care residencies.

What did the CAA 2021 add?

Section 126 of the Consolidated Appropriations Act 2021 (PL 116-260) added 1,000 new Medicare-funded residency slots distributed over FY 2023-FY 2027 (200 per year) with at least 10% each for rural, over-cap, new medical school state, and HPSA-serving hospitals.

What did the CAA 2023 add?

Section 4122 of the Consolidated Appropriations Act 2023 (PL 117-328) added 200 additional Medicare-funded residency slots with at least 100 dedicated to psychiatry and psychiatric subspecialties addressing mental health workforce shortages.

What is the Teaching Health Center GME program?

THCGME, authorized at Section 340H of the Public Health Service Act (42 USC 256h), funds residency training at FQHCs and other ambulatory settings. Administered by HRSA Bureau of Health Workforce. Approximately $173,000 per resident annually.

What is the National Health Service Corps?

NHSC provides loan repayment and scholarships to physicians, dentists, nurse practitioners, and other providers who agree to serve in Health Professional Shortage Areas. Substantial Georgia participation.

What is a Health Professional Shortage Area (HPSA)?

A geographic area, population group, or facility designated by HRSA under Section 332 PHSA as having shortages of primary care, dental, or mental health professionals. Most Georgia rural counties are designated HPSAs.

Which Georgia hospitals are major teaching hospitals?

Grady Memorial Hospital (joint Emory/Morehouse), Emory University Hospital, Emory University Hospital Midtown, AU Medical Center (MCG), Memorial Health Savannah (Mercer), Atrium Health Navicent (Mercer), Children's Healthcare of Atlanta (Emory pediatrics), Atlanta VA Medical Center (Emory faculty), Piedmont Columbus Regional (Mercer), Wellstar Kennestone, Northeast Georgia Medical Center, and others.

Which medical schools are in Georgia?

Five: Emory University School of Medicine (private, Atlanta), Medical College of Georgia at Augusta University (public, Augusta + statewide campuses), Mercer University School of Medicine (private, Macon + Savannah + Columbus), Morehouse School of Medicine (private HBCU, Atlanta), and Philadelphia College of Osteopathic Medicine Georgia (private DO, Suwanee).

How many residents train in Georgia?

Approximately 2,000+ resident FTEs across Georgia teaching hospitals (the exact figure varies by counting methodology and year).

What is the three-year rolling average?

DGME resident counts use a three-year rolling average of FTE residents. This smooths year-to-year variability.

Can a hospital count residents above its BBA cap?

Generally no, with limited exceptions (Section 5503 redistribution, Section 126 CAA 2021 slots, Section 4122 CAA 2023 slots, and specific cap-exempt provisions for new programs).

How does Medicare's share affect DGME?

DGME payment is reduced by Medicare's share of the hospital's patient days. A hospital with higher Medicare share receives higher DGME relative to its total resident count. Hospitals with lower Medicare share (e.g., children's hospitals) receive less Medicare DGME and may rely on other GME funding sources.

How does Mercer's rural track work?

Mercer University School of Medicine has a specific rural mission. Students rotate through rural Georgia hospitals during medical school. Some residents complete rural training tracks. Outcomes show higher rural practice rates for Mercer graduates.

How does Morehouse's mission work?

Morehouse School of Medicine is an HBCU with a mission to train physicians for underserved communities. Joint Grady affiliation provides clinical training in Atlanta's largest safety-net hospital. Graduates practice in underserved settings at higher rates than national averages.

Are GME payments at risk in upcoming legislation?

Medicare GME spending has been a target of various reform proposals. Major comprehensive reform has not been enacted. Incremental changes through CAA 2021 Section 126 and CAA 2023 Section 4122 expanded slots rather than reduced funding. The long-term trajectory remains uncertain.

Where can I get help with Medicare GME questions in Georgia?

For provider-side GME questions, contact Palmetto GBA (the Medicare Administrative Contractor for Georgia) at 1-866-238-9650 or work with your hospital's reimbursement department. For HRSA workforce program questions, contact HRSA Bureau of Health Workforce at 1-800-221-9393. For NHSC questions, visit nhsc.hrsa.gov. Brevy at brevy.com publishes regularly updated guides. :::

How GME interacts with the rest of Medicare hospital payment

Medicare GME is one of several payment streams flowing to teaching hospitals. Understanding the full payment picture requires recognizing how GME stacks with other payments.

DRG payment (base IPPS)

For Medicare inpatient admissions, the hospital first receives the base DRG payment under IPPS. The DRG payment is calculated as the DRG relative weight times the hospital-specific standardized payment amount, with various adjustments.

IME adjustment on top of DRG

IME is added on top of the base DRG payment. For a teaching hospital with a 20 percent IME multiplier, every DRG payment is 20 percent higher than the equivalent non-teaching hospital payment.

DSH adjustment on top of DRG

For hospitals that serve disproportionate share of low-income patients (Section 1886(d)(5)(F)), an additional adjustment applies. Many teaching hospitals (Grady especially) qualify for substantial DSH adjustments. DSH stacks with IME, creating compounding upward adjustments to base DRG.

DGME separately

DGME is calculated and paid separately from inpatient DRG payments. DGME comes through the Medicare cost report process rather than per-claim adjustment.

340B drug acquisition

For hospitals participating in 340B (most major teaching hospitals do as DSH covered entities), 340B drug acquisition discounts add to the financial advantage.

Uncompensated care pool

Section 1886(r) ACA modified DSH to include an uncompensated care pool. Teaching hospitals serving uninsured populations receive uncompensated care payments.

Geographic adjustments

Wage index adjustments based on hospital location affect both base DRG and IME calculations. Geographic Practice Cost Index affects physician fee schedule but not directly hospital GME.

Aggregate for Grady (illustrative)

For Grady Memorial Hospital, the combined federal Medicare payment streams include:

• Base IPPS (DRG) payments
• IME adjustment (substantial)
• DSH adjustment (substantial)
• Uncompensated care payment
• DGME
• 340B drug acquisition discount
• Combined: hundreds of millions of dollars annually in federal Medicare-related financial support

This combination is critical to safety-net teaching hospital viability.

Resident salaries and the residency labor market

Resident salaries are determined by each teaching hospital, not by Medicare. Medicare DGME reimburses approved direct costs, but the salaries themselves are set by hospital policy.

Typical resident salaries

PGY-1 (first year): approximately $65,000-$75,000 annually PGY-2: approximately $67,000-$78,000 PGY-3: approximately $69,000-$81,000 PGY-4 and beyond: continued incremental increases

Salaries vary by hospital, region, and specialty. Higher cost-of-living areas (Boston, New York, San Francisco) tend to have higher resident salaries. Georgia resident salaries are generally near or slightly below national averages for non-metro markets.

The economics of residency

Residents work long hours (80-hour workweek limit per ACGME rules, often approaching that limit). Hourly compensation is comparatively low relative to attending physician compensation. The compensation level reflects:

• The training value of the experience (residents are also learning)
• The supervision provided by attendings
• The historical structure of medical education

The "value" of resident work

For a teaching hospital, residents provide substantial clinical service:

• Inpatient care, including overnight call
• Emergency department coverage
• Clinic visits in outpatient settings
• Procedural assistance
• Documentation and chart work

The combination of relatively low resident compensation and substantial clinical work creates favorable economics for teaching hospitals beyond the GME payments themselves.

Resident unionization

Recent years have seen growing resident unionization activity. CIR/SEIU (Committee of Interns and Residents/Service Employees International Union) has organized residents at many academic medical centers. Some Georgia teaching hospitals' residents have organized; others have not. Unionization affects salary negotiations, work conditions, and benefits.

Fellowships

Fellows (subspecialty trainees beyond IRP) typically earn $80,000-$120,000 depending on specialty and year. Cardiology, oncology, gastroenterology, and other procedural subspecialty fellowships at Georgia academic medical centers fall within this range.

ACGME accreditation and GME

The Accreditation Council for Graduate Medical Education (ACGME) is the body that accredits residency and fellowship programs. ACGME accreditation is required for Medicare GME funding.

ACGME standards

ACGME sets standards for:

• Program curriculum and educational content
• Faculty qualifications and supervision
• Work hours (80-hour weekly limit, duty-hour rules)
• Patient safety culture
• Diversity and inclusion
• Wellbeing initiatives
• Resident evaluation and feedback
• Program evaluation and outcomes

Common Program Requirements

ACGME issues Common Program Requirements applicable to all programs. Specialty-specific Program Requirements address specialty-specific training needs.

Site visits and accreditation cycles

ACGME conducts site visits on multi-year cycles. Programs receive Continued Accreditation, Continued Accreditation with Warning, Probationary Accreditation, or Withdrawal of Accreditation.

Probation and withdrawal

Programs on probation must address cited deficiencies. Programs facing withdrawal of accreditation lose the ability to train new residents. Programs that lose accreditation typically also lose Medicare GME funding for that program.

Single Accreditation System for DO programs

The 2015 transition to the Single Accreditation System merged allopathic and osteopathic residency accreditation under ACGME. Previously osteopathic-specific programs are now ACGME-accredited (sometimes with osteopathic recognition).

Georgia ACGME-accredited programs

Georgia has approximately 100+ ACGME-accredited residency and fellowship programs across the major teaching hospitals.

The Match and Georgia physician workforce pipeline

The National Resident Matching Program (NRMP) administers the Match, the process by which medical school graduates are assigned to residency programs.

Match Day

Each year on the third Friday of March, medical students learn their residency match outcome. The Match algorithm uses ranked preferences from both applicants and programs to determine optimal matches.

Match statistics

Each year approximately:

• 30,000+ US allopathic and osteopathic seniors apply
• Plus several thousand prior-year graduates and international medical graduates
• Approximately 35,000+ total residency positions
• Most positions fill in the main Match
• Unfilled positions go through the Supplemental Offer and Acceptance Program (SOAP)

Georgia Match outcomes

Georgia teaching hospitals participate in the Match. In typical years:

• Atlanta-area programs fill at competitive rates
• AU Medical Center programs fill well
• Mercer-affiliated programs in Macon and Savannah fill well
• Rural Georgia programs sometimes face fill challenges

Pipeline retention

A major Georgia workforce concern is retention: do residents who train in Georgia stay in Georgia to practice? Studies show that approximately 50-70% of residents practice in the state where they trained, with substantial variation by program. Georgia retention is generally favorable for in-state medical school graduates training in Georgia residencies.

The graduate medical education debate

GME funding has been the subject of policy debate for decades. Major debate threads:

Cap reform

Should the BBA 1997 cap be eliminated, expanded, or maintained? CAA 2021 and CAA 2023 provided incremental expansion. Broader cap reform proposals have not been enacted.

Workforce targeting

Should GME funding be more closely tied to workforce needs (primary care, rural areas, underserved specialties)? Various proposals would condition GME funding on workforce outcomes. Critics argue that tying funding to outcomes is operationally difficult.

All-payer GME pool

Should commercial insurers and Medicaid contribute to GME alongside Medicare? Currently Medicare is the largest GME funder, with Medicaid making smaller contributions in some states and commercial insurers generally not contributing directly.

Transparency and accountability

Should teaching hospitals be required to publish more transparent information about how GME funds are used? Some advocates argue that the connection between GME funding and resident training is opaque.

Children's hospitals

Free-standing children's hospitals receive HRSA Children's Hospitals GME funding rather than Medicare GME (because they have few Medicare patients). The adequacy of CHGME funding has been a recurring concern.

Rural and primary care

Specific concerns about rural and primary care GME have led to targeted programs (THCGME, Section 126 rural priority, etc.). Whether these programs are adequate to address workforce shortages is debated.

IME methodology

Some MedPAC and other analyses have suggested that IME is set above the actual incremental cost of teaching. Reform proposals have suggested lowering the IME multiplier. Teaching hospitals strongly oppose such proposals.

Position of MedPAC

MedPAC has periodically recommended GME reforms including:

• More transparent accountability for GME funds
• Reduction of IME multiplier toward actual incremental teaching cost
• Performance-based GME funding tied to workforce outcomes
• Cap reform

MedPAC recommendations are advisory; Congress has not adopted comprehensive reform.

Diversity, equity, and inclusion in Georgia GME

Georgia has been a national leader in physician workforce diversity, partly through Morehouse School of Medicine's HBCU status and partly through MCG and other schools' diversity initiatives.

Morehouse School of Medicine

As an HBCU, Morehouse has graduated a substantial portion of Black physicians in the US. Joint Grady affiliation means Morehouse residents train alongside Emory residents in a setting serving primarily Black patients.

MCG at AU diversity initiatives

MCG has implemented holistic admissions and pipeline programs aimed at recruiting diverse classes. Statewide MCG campuses (Athens, Albany, Savannah, Rome) reach diverse populations.

Mercer rural and underserved focus

Mercer's rural mission overlaps with serving rural populations including diverse rural Georgia communities.

Emory and Atlanta diversity

Emory operates in a metropolitan Atlanta that is one of the most diverse US cities. Emory's residency programs reflect this diversity to varying degrees.

National workforce diversity

Despite progress, US physician workforce remains less diverse than the US population. Black physicians, Hispanic/Latino physicians, and Indigenous physicians are underrepresented relative to population. Georgia institutions contribute meaningfully but the gaps remain.

International medical graduates (IMGs) and Georgia

International medical graduates (physicians trained in medical schools outside the US and Canada) constitute a substantial portion of the US physician workforce.

Match participation

IMGs participate in the residency Match. Approximately 25 percent of US residency positions are filled by IMGs each year.

Georgia IMG participation

Many Georgia residency programs include IMGs in their classes. Some Georgia programs (particularly internal medicine, family medicine, psychiatry) have relatively higher IMG proportions.

Visa and licensing issues

IMGs face additional licensing and visa requirements:

• USMLE Steps 1, 2 CK, and 3 examination requirements
• ECFMG (Educational Commission for Foreign Medical Graduates) certification
• J-1 visa (training visa) or H-1B visa (employment visa)
• Eventual licensure pathway

Georgia state requirements

Georgia Composite Medical Board has specific requirements for IMG licensure. Most IMGs in Georgia residency programs eventually pursue Georgia licensure for ongoing practice in Georgia.

Workforce contribution

IMGs make substantial contributions to Georgia physician workforce, particularly in primary care, internal medicine, and underserved areas. Some IMGs commit to underserved service through J-1 visa waiver programs (Conrad 30, others).

VA Medical Center GME and the Atlanta VA

Veterans Health Administration medical centers play a substantial role in physician training. The Atlanta VA Medical Center is one of the largest VA training sites in the country.

VA-funded resident positions

VA funds approximately 12,000+ resident FTEs nationwide. These positions are separate from Medicare GME and funded directly from VA appropriations. VA residents are typically affiliated with a nearby medical school (in Atlanta's case, Emory).

Atlanta VA scope

Atlanta VA Medical Center trains residents in:

• Internal medicine
• Surgery
• Psychiatry
• Neurology
• Anesthesiology
• Multiple subspecialties

Educational quality

VA training is generally well-regarded for:

• Comprehensive primary care training (large primary care patient population)
• Mental health training (substantial PTSD and other veteran mental health needs)
• Geriatric training (older veteran population)
• Procedural training in multiple specialties

Career outcomes

Many VA-trained physicians continue VA careers. Others enter private practice with strong training foundations.

Integration with Emory

The Atlanta VA-Emory affiliation includes joint faculty appointments, shared residency programs, and coordinated patient care. Many Emory faculty hold VA appointments and vice versa.

Children's Hospitals GME program

Free-standing children's hospitals historically received little Medicare GME because they treat few Medicare-aged patients. The Children's Hospitals Graduate Medical Education (CHGME) program, administered by HRSA, fills this gap.

Statutory authority

Section 340E of the Public Health Service Act authorizes CHGME. The program has been reauthorized multiple times.

Funding structure

HRSA pays free-standing children's hospitals a per-resident amount that approximates Medicare DGME plus IME for similar institutions.

Children's Healthcare of Atlanta

CHOA receives substantial CHGME funding. CHOA also benefits from Medicare GME for its pediatric residents during inpatient rotations.

Program size

Approximately 50+ free-standing children's hospitals receive CHGME funding nationally. CHOA is one of the largest.

Workforce shortages and Georgia rural health

Georgia faces substantial physician workforce shortages, particularly in rural areas.

Rural Georgia HPSAs

Nearly all rural Georgia counties are designated primary care HPSAs in at least one category. Some are designated in primary care, dental, and mental health.

Rural hospital closures

Georgia has experienced 10+ rural hospital closures since 2010. Closures reduce local access and create workforce challenges (physicians who were hospital-based no longer have practice sites).

Pipeline initiatives

Multiple initiatives attempt to address rural workforce:

• Mercer rural track
• Augusta University MCG statewide campus (Albany, Rome, Savannah serve as rural pipeline)
• NHSC participation
• J-1 visa waiver programs for IMGs in rural areas
• Section 126 CAA 2021 rural slot priority
• Section 4122 CAA 2023 psychiatry slots (rural mental health particularly severe)

Effectiveness

The combination of initiatives has had partial effect but workforce shortages remain. Long-term physician supply requires sustained pipeline investment.

Medicaid GME in Georgia

While Medicare is the primary federal GME funder, Medicaid also makes GME payments in many states. Medicaid GME framework varies substantially by state.

Federal Medicaid GME authority

Medicaid GME is not explicitly authorized by statute the way Medicare GME is. Medicaid GME payments flow through general Medicaid payment authority at Section 1902(a)(30)(A) and Section 1902(a)(13)(A), with significant state discretion in methodology.

Section 438.6(c)(1)(iii) directed payments

For Medicaid managed care, federal regulations at 42 CFR 438.6(c)(1)(iii) authorize "directed payments" that can include GME components. Georgia Families and Georgia PeachCare for Kids use directed payments for various purposes.

Georgia Medicaid GME structure

Georgia DCH operates Medicaid GME payments through:

• Inpatient hospital payment methodology with GME components
• Specific GME pool payments to teaching hospitals
• Directed payments through managed care

Methodology

Georgia generally follows Medicare GME methodology principles (PRA approach, FTE counting) with state-specific modifications.

Amounts

Georgia Medicaid GME payments are smaller in absolute terms than Medicare GME but still material for participating teaching hospitals.

Workforce metrics for Georgia

Several metrics characterize Georgia's physician workforce:

Physicians per 100,000 population

Georgia ranks below the US average on overall physicians per 100,000. Some specialties have particularly low ratios:

• Primary care
• Psychiatry
• General surgery in rural areas

Geographic distribution

Physician density is concentrated in metro areas, particularly Atlanta, Augusta, and Savannah. Many rural Georgia counties have very low physician density.

Specialty distribution

Georgia has relative shortages in:

• Primary care (family medicine, internal medicine, pediatrics)
• Psychiatry
• General surgery
• Obstetrics/gynecology in rural areas

Relative adequacy in:

• Cardiology
• Orthopedic surgery
• Some other procedural subspecialties (concentrated in metro areas)

Pipeline metrics

Georgia medical school graduate retention in Georgia residencies is generally favorable. Resident retention in Georgia practice is more variable.

Workforce policy

Georgia Board of Health Care Workforce conducts workforce analysis and recommends policy. The Board has highlighted rural and mental health workforce as priorities.

Continuing GME reform discussion

GME funding is regularly the subject of policy proposals.

MedPAC analyses

MedPAC has produced multiple analyses suggesting that:

• IME multiplier exceeds actual incremental teaching cost
• DGME could be better aligned with workforce outcomes
• More transparency in GME spending would benefit the public

Industry positions

The American Hospital Association, Association of American Medical Colleges, and individual academic medical centers generally support current GME funding levels. Reform proposals are typically opposed.

Academic medical center perspective

Academic medical centers argue that:

• IME reflects real costs that go beyond direct resident salaries
• Reductions would compromise teaching mission and patient care
• Cap reform is overdue to address workforce shortages
• Continued and expanded GME funding is essential

Federal budget perspective

GME is a substantial federal expenditure ($16 billion Medicare plus VA and HRSA amounts). It is therefore subject to budget pressure in any deficit-reduction discussion.

Future trajectory

As of 2026, the trajectory is incremental slot expansion (CAA 2021, CAA 2023) rather than fundamental reform. Comprehensive GME reform remains possible but unlikely in the near term.

Working with Brevy and Georgia resources

Brevy publishes regularly updated guides at brevy.com on Medicare, Medicaid, hospital financing, and physician workforce topics. We do not provide legal, financial, or compliance advice. We provide research-grade content explaining the framework so that Georgia teaching hospitals, residents, medical schools, and beneficiaries can understand the program.

For provider GME questions, contact Palmetto GBA at 1-866-238-9650 or your hospital's reimbursement department. For HRSA workforce program questions, contact HRSA Bureau of Health Workforce at 1-800-221-9393.

For residents and medical students with questions about loan repayment, NHSC, or workforce programs, contact HRSA at nhsc.hrsa.gov. For Medicare beneficiary questions, contact Medicare at 1-800-MEDICARE or GeorgiaCares SHIP at 1-866-552-4464.

Disclaimers

This article is for educational purposes only and does not constitute legal, compliance, financial, or medical advice. Medicare GME rules are subject to change through CMS rulemaking, congressional action, and ongoing litigation. The information in this article reflects rules in effect as of May 2026. Always verify current rules at cms.gov, hrsa.gov, and through current CMS Provider Reimbursement Manual provisions before making decisions.

Brevy is not affiliated with CMS, HRSA, HHS, Palmetto GBA, MedPAC, or any teaching hospital or medical school. Brevy is an eldercare research and information company. We accept no compensation from healthcare providers, educational institutions, or other parties.

Information about Georgia hospitals and medical schools reflects publicly available information as of the publication date. Specific GME payment estimates are illustrative; actual amounts vary by year and depend on specific calculation factors. Verify current information with the relevant organization before relying on it.

This article was researched and written by the Brevy Care Team and is pending final editorial review.

::: cta

Get help with Medicare GME and physician workforce questions in Georgia

Federal agencies

• HRSA Bureau of Health Workforce: 1-800-221-9393. Federal physician workforce programs. hrsa.gov/about/organization/bureaus/bhw
• National Health Service Corps: nhsc.hrsa.gov. Loan repayment and scholarships
• Medicare: 1-800-MEDICARE (1-800-633-4227). General Medicare questions
• CMS Provider Enrollment: 1-866-484-8049. cms.gov

Georgia state agencies

• Georgia Department of Community Health: 1-866-211-0950. Medicaid GME coordination. dch.georgia.gov
• Georgia Board of Health Care Workforce: Through dch.georgia.gov. Physician workforce policy
• GeorgiaCares SHIP: 1-866-552-4464. Free Medicare counseling
• Georgia Composite Medical Board: 404-656-3913. Physician licensure
• Georgia State Medical Education Board: Through dch.georgia.gov

Medicare Administrative Contractor

• Palmetto GBA Provider Enrollment: 1-855-696-0705
• Palmetto GBA Customer Service: 1-866-238-9650
• Palmetto GBA Provider Outreach: through palmettogba.com

Medical schools

• Emory University School of Medicine: med.emory.edu
• Medical College of Georgia at Augusta University: augusta.edu/mcg
• Mercer University School of Medicine: medicine.mercer.edu
• Morehouse School of Medicine: msm.edu
• Philadelphia College of Osteopathic Medicine Georgia: pcom.edu/georgia

Industry organizations

• Association of American Medical Colleges (AAMC): aamc.org. Allopathic medical schools and teaching hospitals
• American Association of Colleges of Osteopathic Medicine (AACOM): aacom.org
• American Medical Association: ama-assn.org
• Medical Association of Georgia: mag.org
• Georgia Hospital Association: gha.org

Legal and consumer assistance

• Atlanta Legal Aid Society: 404-377-0701. Free civil legal services
• Georgia Legal Services Program: 1-800-498-9469
• Center for Medicare Advocacy: 1-860-456-7790
• Medicare Rights Center: 1-800-333-4114

Additional resources

• Eldercare Locator: 1-800-677-1116. eldercare.acl.gov
• 211 Georgia: Dial 211 for community resources
• National Council on Aging: 1-800-794-6559. ncoa.org

Brevy

Brevy at brevy.com publishes regularly updated guides on Medicare, Medicaid, VA benefits, and caregiving across all 50 states. Our guides are free, advertising-free, and reviewed annually. :::