Georgia Medicare IME Adjustment 2026 Guide

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By Brevy Care Team · Last verified May 13, 2026

The Indirect Medical Education (IME) adjustment is one of the most significant Medicare payment adjustments to teaching hospitals. Authorized at Section 1886(d)(5)(B) of the Social Security Act and established by Section 9202 of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA, Public Law 99-272), IME adjusts inpatient prospective payment system (IPPS) payments to teaching hospitals based on the Resident-to-Bed Ratio (IRB). Direct Graduate Medical Education (DGME), authorized separately at Section 1886(h), provides additional payment for direct teaching costs through a per-resident amount methodology.

For Georgia, IME is enormous. Major Georgia teaching hospitals including Emory University Hospital, Emory University Hospital Midtown, Grady Memorial Hospital, Augusta University Medical Center, Memorial Health Savannah, Wellstar Kennestone, Piedmont Atlanta, Northeast Georgia Medical Center, Northside Hospital, and Children's Healthcare of Atlanta receive substantial Medicare GME payments. Emory and Grady alone receive tens of millions of dollars annually in combined IME and DGME revenue.

This guide covers the IME statutory framework, the IME adjustment formula, the Resident-to-Bed Ratio calculation, the three-year rolling average resident count, the Section 4621 of BBA 1997 resident cap, the Section 1886(h) DGME methodology, the Per-Resident Amount (PRA), recent GME slot additions (Section 126 of CAA 2021 and Section 4122 of CAA 2023 adding additional slots), Children's Hospital GME (Section 340E PHSA), Teaching Health Center GME (Section 5508 ACA), Medicare Cost Report Worksheet E-4 IME and Worksheet E-3 Part IV DGME calculations, IRIS reporting, and how major Georgia teaching hospitals approach IME compliance and graduate medical education workforce planning. :::

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

1. Section 1886(d)(5)(B) Social Security Act authorizes the IME adjustment to base operating IPPS DRG payments for teaching hospitals based on Resident-to-Bed Ratio.

2. Section 1886(h) authorizes Direct Graduate Medical Education (DGME) payment separate from IME, based on Per-Resident Amount (PRA) and Medicare share methodology.

3. Section 4621 of BBA 1997 established the resident cap, freezing Medicare-funded GME growth at affected hospitals.

4. Section 126 of Consolidated Appropriations Act 2021 added additional Medicare-funded residency slots distributed over multiple years with priority for rural areas, hospitals over their cap, states with new medical schools, and HPSAs.

5. Major Georgia teaching hospitals including Emory, Grady, AU Medical Center, Memorial Savannah, Wellstar Kennestone, Piedmont Atlanta, Northeast Georgia Medical Center, and Northside receive substantial Medicare IME and DGME payments supporting graduate medical education in Georgia. :::

The statute: Section 1886(d)(5)(B) IME and Section 1886(h) DGME

The Medicare graduate medical education payment framework has two main components.

Section 1886(d)(5)(B) IME

Section 1886(d)(5)(B) of the Social Security Act authorizes the Indirect Medical Education (IME) adjustment to IPPS payments. IME compensates teaching hospitals for the higher operating costs associated with teaching activities, including the indirect costs of training residents that are not captured in DGME's direct cost methodology.

IME was originally established as part of the Inpatient Prospective Payment System (IPPS) in 1983 to account for the higher costs of teaching hospitals. The current formula was codified by Section 9202 of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA, Public Law 99-272) and subsequently refined by Section 4623 of the Balanced Budget Act of 1997 (BBA, Public Law 105-33).

Section 1886(h) DGME

Section 1886(h) authorizes Direct Graduate Medical Education (DGME) payment for the direct costs of graduate medical education, including resident salaries and benefits, supervising physician costs, and direct administrative costs. DGME uses a separate methodology based on a Per-Resident Amount (PRA) multiplied by hospital-specific Medicare share.

Section 9202 COBRA 1985

Section 9202 of COBRA established the IME formula structure that remains in effect (with Section 4623 BBA 1997 modifications) today. The formula uses Resident-to-Bed Ratio as the key input.

Section 4621 BBA 1997 (resident cap)

Section 4621 of the Balanced Budget Act of 1997 established the resident cap at Section 1886(h)(4)(F). Under the cap:

• Hospital's Medicare-funded resident count frozen at the level in effect at the time BBA 1997 was enacted
• IME and DGME calculations use the lower of actual residents or cap
• Hospitals cannot increase Medicare GME funding above the cap (with limited exceptions)
• Cap permanently constrains Medicare GME growth at affected hospitals

The resident cap was implemented as a cost-control measure during the 1997 Balanced Budget Act, reflecting concerns about GME spending growth and supposed physician oversupply at the time.

Section 4623 BBA 1997 (IME formula)

Section 4623 BBA 1997 established the current IME formula structure using Resident-to-Bed Ratio as the key input.

Section 4626 BBA 1997 (PRA cap)

Section 4626 BBA 1997 capped the Per-Resident Amount used in DGME calculations.

Section 5503/5505/5506/5508 ACA 2010

The Affordable Care Act of 2010 included several GME provisions:

• Section 5503: redistribution of unused residency slots
• Section 5505: rural training track adjustments
• Section 5506: closing hospital resident redistribution
• Section 5508: Teaching Health Center GME (THCGME)

Section 126 CAA 2021

Section 126 of the Consolidated Appropriations Act of 2021 (Public Law 116-260) added additional Medicare-funded residency slots, distributed over multiple years with specific priority categories.

Section 4122 CAA 2023

Section 4122 of the Consolidated Appropriations Act of 2023 (Public Law 117-328) added additional residency slots focused on psychiatric subspecialty.

The IME formula

The IME formula at Section 1886(d)(5)(B)(ii)(II) calculates a percentage adjustment to base IPPS DRG payments based on the Resident-to-Bed Ratio (IRB).

Formula intuition

The formula produces a percentage adjustment to base operating IPPS DRG payments. Higher IRB produces higher IME adjustment. The relationship is non-linear, producing decreasing marginal returns at higher ratios.

Operating IME adjustment

The IME adjustment applies to base operating IPPS DRG payments. The adjustment is multiplicative, increasing payment for teaching hospitals.

Capital IME adjustment

A separate capital IME adjustment applies to capital IPPS payments. The capital IME formula is different from operating IME and produces smaller adjustments.

Historical formula

The IME formula has been adjusted over time:

• Initial IPPS implementation 1983: higher effective adjustment
• COBRA 1985 Section 9202: codified formula
• BBA 1997 Section 4623: current formula

The current formula reflects policy decisions about appropriate GME subsidy levels, reducing the effective adjustment from the original 1983 calibration.

Resident-to-Bed Ratio (IRB)

The Resident-to-Bed Ratio is the key input to the IME formula.

Numerator: residents

The numerator counts Medicare-recognized residents:

• Allopathic (MD) and osteopathic (DO) residents
• In approved residency training programs (ACGME-accredited)
• Three-year rolling average to smooth fluctuations
• 1.0 FTE cap per resident maximum
• Patient care time in eligible settings counts
• Research and teaching time may or may not count depending on specific rules

Denominator: available beds

The denominator counts available beds:

• Hospital available bed count from Medicare Cost Report
• Specific definition of "available beds" applies
• Generally includes acute care beds, may include some other beds depending on rules

Three-year rolling average

The resident count uses three-year rolling average:

• Smooths year-to-year fluctuations
• Provides stability
• Reflects sustained teaching commitment

1.0 FTE cap per resident

No resident can count for more than 1.0 FTE regardless of work hours. This ensures consistent counting across hospitals and prevents inflating resident counts through long work hours.

Patient care time eligibility

• Patient care time in approved settings counts
• Approved settings include hospital, hospital-based clinics, and other eligible patient care settings
• Specific rules for outpatient settings

Research and teaching time

• Research and teaching time treated separately
• May count under specific circumstances
• Documentation requirements

Cap application

• IRB calculation uses lower of actual residents or cap
• Hospitals over cap do not benefit from additional residents above cap
• Cap is critical constraint for many teaching hospitals

Approved residency training programs

ACGME accreditation

The Accreditation Council for Graduate Medical Education (ACGME) accredits allopathic residency training programs in the United States. ACGME accreditation is required for Medicare GME funding eligibility.

AOA approval (historical)

The American Osteopathic Association (AOA) historically approved osteopathic residency programs. The transition to a single GME accreditation system unified allopathic and osteopathic programs under ACGME.

Specific eligibility criteria

• ACGME accreditation in good standing
• Specified program length
• Educational standards
• Resident supervision
• Curriculum requirements

Specialty and subspecialty training

• Internal medicine, family medicine, pediatrics, etc.
• Subspecialty fellowships
• Initial board eligibility requirements
• Specific specialty training time count

Per-Resident Amount (PRA) for DGME

The PRA is the per-resident amount used in DGME calculation.

PRA initial calculation

• Established initially in 1984-1985 base period
• Hospital-specific based on historical GME costs
• Reflected hospital's actual GME costs at that time
• Substantial variation across hospitals

PRA inflation adjustment

• Inflation-adjusted over time
• Annual update factors apply
• Specific update methodology

PRA hospital variation

• PRA varies significantly across hospitals
• Reflects 1984-1985 cost differences
• Some hospitals have substantially higher or lower PRA than others
• Generally locked in based on initial calculation

Section 4626 BBA 1997 PRA cap

• Capped the Per-Resident Amount above a national average threshold for primary care
• Different treatment for primary care vs other specialties
• Provided some PRA limitation

Section 5505 ACA FY 2010 PRA recalculation

• One-time PRA recalculation opportunity for specific hospitals
• Limited application

DGME calculation

DGME payment = Total Residents (capped) × PRA × Medicare Share

Medicare share

• Medicare patient days / Total patient days
• Hospital-specific
• Calculated from Medicare Cost Report

Total residents

• Capped at Section 1886(h)(4)(F) cap level
• Three-year rolling average not required for DGME (different from IME)
• 1.0 FTE per resident

PRA application

• Hospital-specific PRA
• Inflation-adjusted

Pass-through payment

• DGME is not part of DRG payment
• Pass-through methodology
• Reflected on cost report Worksheet E-3 Part IV

Resident cap (Section 4621 BBA 1997)

BBA 1997 baseline

The resident cap is based on hospital's resident count at the time BBA 1997 was enacted. Hospitals with active GME programs at that time have a cap reflecting their then-existing programs.

Cap permanence

The cap is generally permanent. Hospitals cannot increase Medicare-funded resident count above the cap (with limited exceptions including Section 126 CAA 2021 slot additions).

Effect on IME and DGME

• IME: IRB calculation uses lower of actual residents or cap
• DGME: Total Residents capped at cap level
• Hospitals over cap fund additional residents through other sources

New teaching hospitals

• Multi-year cap-building period for new teaching hospitals
• Hospitals establishing residency programs after BBA 1997 establish cap during the initial period
• After the cap-building period, cap is fixed

Rural training track adjustments

• Section 4623(d) BBA 1997 rural training track provisions
• Section 1886(h)(4)(H) rural training track cap adjustment
• Limited cap expansion for rural training tracks

Affiliated group reallocation

• Hospitals in affiliated groups can share cap slots
• Specific rules apply
• Allows flexibility within fixed total cap

Cap restoration

• Section 422 of MMA 2003 restored caps for certain hospitals
• Specific eligibility criteria

Recent GME slot additions

Section 126 CAA 2021

Section 126 of the Consolidated Appropriations Act of 2021 added additional Medicare-funded residency slots distributed over multiple years. Priority categories:

• Rural areas
• Hospitals over their existing cap
• States with new medical schools
• Health Professional Shortage Areas (HPSAs)

The slots are allocated through CMS application and selection process. Hospitals apply, and CMS awards slots based on priority criteria. Several Georgia hospitals have applied for and received slots.

Section 4122 CAA 2023

Section 4122 of the Consolidated Appropriations Act of 2023 added additional residency slots focused on psychiatric subspecialty. The slots target psychiatric workforce shortages.

Significance for Georgia

Georgia teaching hospitals have applied for and received slots under Section 126 CAA 2021. The new slot additions provide modest expansion of Georgia GME capacity but do not fundamentally change the cap-constrained framework.

Children's Hospital GME (CHGME)

Children's hospitals not paid under IPPS are not eligible for IME and DGME. Instead, they receive Children's Hospital GME (CHGME) payment under Section 340E of the Public Health Service Act (PHSA).

Section 340E PHSA

• Authorizes CHGME
• HRSA administration (not CMS)
• Different funding mechanism
• Applies to freestanding children's hospitals

Children's Healthcare of Atlanta

CHOA is the major children's hospital in Georgia and receives CHGME funding. CHOA pediatric residency programs are supported through CHGME rather than Medicare IME and DGME.

Annual appropriation

CHGME funding is subject to annual congressional appropriation, creating uncertainty about funding levels each year.

Teaching Health Center GME (THCGME)

The Affordable Care Act established Teaching Health Center GME (THCGME) at Section 5508 of the ACA.

Section 5508 ACA

• Authorizes THCGME
• HRSA administration (not CMS)
• Community-based GME funding
• Focus on primary care and community-based training

Funding mechanism

• Different from Medicare GME
• Subject to congressional appropriation
• Supports primary care residency programs in community settings

Georgia THCGME participants

Various Georgia community health centers and federally qualified health centers participate in THCGME programs.

Cost report calculations

Worksheet E-4 IME (Form CMS-2552-10)

The IME calculation on the Medicare Cost Report Worksheet E-4 includes:

• Resident counts (three-year rolling average, capped)
• Available beds
• IRB calculation
• IME formula application
• IME revenue calculation

Worksheet E-3 Part IV DGME

The DGME calculation on Worksheet E-3 Part IV includes:

• Resident count (capped)
• Per-Resident Amount
• Medicare share
• DGME revenue calculation

Worksheet S-2

Hospital characteristics including teaching status, approved programs, and other GME-relevant information.

Worksheet S-3

Hospital wage and statistical data including bed count.

IRIS (Intern and Resident Information System)

The Intern and Resident Information System (IRIS) is the standardized reporting system for teaching hospital resident data.

IRIS reporting requirement

• Required for teaching hospitals
• Submitted to Medicare Administrative Contractor (MAC)
• Supports cap and IME/DGME calculation

IRIS data elements

• Resident name and SSN
• Program affiliation
• Training year
• Time in patient care vs research/teaching
• Rotation locations
• Specific GME activities

IRIS validation

• MAC validation of IRIS data
• Reconciliation with hospital records
• Audit potential

Worked example 1: Emory University Hospital IME

Emory University Hospital is a major academic medical center in Atlanta. Hypothetical IME calculation:

• Resident count (three-year rolling): 600 FTE (well within cap)
• Available beds: 700
• Resident-to-Bed Ratio: 600 / 700 = 0.857
• Hypothetical IME adjustment: approximately 37 percent
• On approximately $400 million base operating DRG payments, IME revenue ≈ $148 million
• Plus DGME (PRA × residents × Medicare share)
• Combined Medicare GME revenue significant

Emory University Hospital benefits from substantial IME revenue reflecting the academic medical center's extensive residency program. The Emory residency programs include internal medicine, surgery, pediatrics, family medicine, OB/GYN, psychiatry, emergency medicine, radiology, anesthesiology, and numerous subspecialty fellowships.

Worked example 2: Grady Memorial Hospital IME

Grady Memorial Hospital in Atlanta serves as a major teaching hospital with Emory University School of Medicine and Morehouse School of Medicine residency programs. Hypothetical IME calculation:

• Resident count (three-year rolling): 700 FTE (within cap)
• Available beds: 950
• Resident-to-Bed Ratio: 700 / 950 = 0.737
• Hypothetical IME adjustment: approximately 33 percent
• On approximately $250 million base operating DRG payments, IME revenue ≈ $82 million
• Plus DGME
• Combined Medicare GME revenue significant

Grady serves as the primary teaching hospital for both Emory and Morehouse residency programs, with substantial GME activity supporting workforce development for Atlanta and Georgia.

Worked example 3: AU Medical Center IME

Augusta University Medical Center is the academic medical center for the Medical College of Georgia. Hypothetical IME calculation:

• Resident count (three-year rolling): 350 FTE (within cap)
• Available beds: 470
• Resident-to-Bed Ratio: 350 / 470 = 0.745
• Hypothetical IME adjustment: approximately 33 percent
• On approximately $220 million base operating DRG payments, IME revenue ≈ $73 million
• Plus DGME
• Combined Medicare GME revenue substantial

AU Medical Center supports residency programs across multiple specialties for the Medical College of Georgia, the state's only public allopathic medical school.

Worked example 4: Memorial Health Savannah IME

Memorial Health (HCA Healthcare) in Savannah is a teaching hospital affiliated with Mercer University School of Medicine. Hypothetical IME calculation:

• Resident count (three-year rolling): 100 FTE
• Available beds: 600
• Resident-to-Bed Ratio: 100 / 600 = 0.167
• Hypothetical IME adjustment: approximately 8.8 percent
• On approximately $230 million base operating DRG payments, IME revenue ≈ $20 million
• Plus DGME
• Smaller but still substantial Medicare GME revenue

Memorial Savannah's smaller residency program reflects community teaching hospital scale, with focus on internal medicine, family medicine, OB/GYN, and other community-based residencies.

Worked example 5: Wellstar Kennestone IME

Wellstar Kennestone Hospital in Marietta is a community teaching hospital with residency partnerships including Medical College of Georgia. Hypothetical IME calculation:

• Resident count (three-year rolling): 80 FTE
• Available beds: 550
• Resident-to-Bed Ratio: 80 / 550 = 0.145
• Hypothetical IME adjustment: approximately 7.7 percent
• On approximately $300 million base operating DRG payments, IME revenue ≈ $23 million
• Plus DGME

Wellstar Kennestone's community teaching model provides residency training in community hospital setting supplementing academic medical center training.

Worked example 6: hypothetical new teaching hospital cap building

A hypothetical Georgia community hospital establishing its first residency program faces a multi-year cap-building period:

• Year 1: 5 FTE residents established. Cap not yet set.
• Year 2: 10 FTE residents.
• Year 3: 15 FTE residents.
• Year 4: 20 FTE residents.
• Year 5: 25 FTE residents. Cap established at 25 FTE.
• Year 6+: Cap fixed at 25 FTE.

During the cap-building period, the hospital receives IME and DGME based on actual residents (not yet capped). After the period ends, the cap freezes Medicare-funded residency growth at 25 FTE. Subsequent residency growth must be funded through other sources or through Section 126 CAA 2021 slot awards.

Major Georgia teaching hospitals

Emory University Hospital

Located in Atlanta, Emory University Hospital is the flagship hospital of Emory Healthcare. It serves as a major teaching hospital for Emory University School of Medicine residency programs across virtually all specialties. Emory receives substantial Medicare IME and DGME revenue.

Emory University Hospital Midtown

Located in Atlanta, Emory University Hospital Midtown (formerly Crawford Long) is a community teaching hospital with Emory residency rotations.

Grady Memorial Hospital

Located in Atlanta, Grady serves as primary teaching hospital for both Emory University School of Medicine and Morehouse School of Medicine. Grady's safety-net mission combined with major teaching activity creates substantial Medicare GME funding.

Augusta University Medical Center

Located in Augusta, AU Medical Center is the academic medical center for the Medical College of Georgia (Georgia's only public allopathic medical school) at Augusta University. The hospital supports residency programs across multiple specialties.

Memorial Health Savannah

Located in Savannah, Memorial Health (HCA Healthcare) is a teaching hospital affiliated with Mercer University School of Medicine.

Wellstar Kennestone Hospital

Located in Marietta, Wellstar Kennestone is a community teaching hospital with residency partnerships.

Piedmont Atlanta Hospital

Located in Atlanta, Piedmont Atlanta supports internal medicine residency.

Northeast Georgia Medical Center

Located in Gainesville, NGMC supports residency programs serving northeast Georgia.

Children's Healthcare of Atlanta

CHOA is a freestanding children's hospital and is excluded from Medicare IPPS (and therefore IME). CHOA receives CHGME funding under Section 340E PHSA instead.

Atlanta VA Medical Center

The Atlanta VA Medical Center supports VA-funded GME programs through a separate funding mechanism.

Mercer University School of Medicine partnerships

Mercer University School of Medicine partners with various Georgia hospitals for residency training, including Memorial University Medical Center, Memorial Health Savannah, and others.

Various community teaching hospitals

Multiple Georgia community hospitals participate in GME at smaller scale through residency partnerships with medical schools.

Georgia medical schools

Emory University School of Medicine

Atlanta-based private medical school with extensive residency programs at Emory hospitals and Grady Memorial Hospital.

Morehouse School of Medicine

Atlanta-based Historically Black Colleges and Universities (HBCU) medical school with partnerships at Grady Memorial Hospital and other Georgia hospitals.

Medical College of Georgia at Augusta University

Georgia's only public allopathic medical school, located in Augusta, with academic medical center at AU Medical Center.

Mercer University School of Medicine

Macon-based medical school with partnerships at various Georgia hospitals including Memorial Health Savannah.

Philadelphia College of Osteopathic Medicine - Georgia Campus

Suwanee-based osteopathic medical school.

Augusta University/University of Georgia Medical Partnership

Athens-based medical education partnership.

GME funding ecosystem

Beyond Medicare IME and DGME, multiple GME funding streams support graduate medical education.

Medicare GME

• Section 1886(d)(5)(B) IME
• Section 1886(h) DGME
• Largest single GME funding source
• Subject to Section 4621 BBA 1997 cap

Medicaid GME

• State-administered Medicaid GME programs
• Vary substantially by state
• Some states provide substantial GME funding
• Georgia Medicaid GME funding through DCH

VA GME

• VA system residency funding
• Supports residency rotations at VA medical centers
• Different funding mechanism from Medicare GME
• Atlanta VA Medical Center participates

HRSA Teaching Health Center GME (THCGME)

• Section 5508 ACA
• Health Resources and Services Administration
• Community-based GME funding
• Subject to annual congressional appropriation

Children's Hospital GME (CHGME)

• Section 340E PHSA
• HRSA administered
• For freestanding children's hospitals
• CHOA receives CHGME

Private GME funding

• Limited private support
• Significantly smaller than government sources
• Some foundation-funded programs

GME policy debate

MedPAC GME recommendations

The Medicare Payment Advisory Commission has recommended:

• Performance-based GME payment
• Workforce alignment incentives
• Continued attention to physician workforce
• Reform of current cap and funding structure

IOM 2014 GME Report

The Institute of Medicine 2014 report "Graduate Medical Education That Meets the Nation's Health Needs" recommended substantial GME reform:

• Performance-based funding
• Trust fund approach
• Greater workforce alignment
• Increased transparency

COGME (Council on Graduate Medical Education)

COGME is a federal advisory committee on physician workforce policy. COGME has issued multiple reports recommending GME reform and workforce policy changes.

Macy Foundation GME reports

The Josiah Macy Jr. Foundation has issued multiple reports recommending GME reform.

AAMC position

The Association of American Medical Colleges supports:

• Expansion of Medicare-funded GME
• Defense of current GME framework
• Workforce shortage concerns
• Increased federal investment in GME

AHA position

The American Hospital Association supports:

• GME funding maintenance and expansion
• Cap relief advocacy
• Methodology refinement
• Continued engagement with Congress

AMA position

The American Medical Association supports:

• GME funding maintenance
• Resident workforce attention
• Physician workforce policy

Policy alternatives

Various GME reform proposals include:

• Performance-based payment
• Workforce alignment incentives
• Cap reform
• Funding source diversification
• Direct trust fund approach
• All-payer GME funding

IME compliance issues

Several IME and DGME compliance issues require ongoing attention.

Resident time tracking

• Patient care time documentation
• Research/teaching time treatment
• Rotation location tracking
• Time documentation accuracy

Cap administration

• Section 4621 BBA 1997 cap
• Affiliated group reallocation
• New teaching hospital cap building
• Cap restoration provisions

FTE counting

• 1.0 FTE per resident cap
• Patient care setting eligibility
• Specific exclusions

IRIS reporting

• Accurate IRIS data submission
• Reconciliation with hospital records
• MAC validation

Cost report Worksheet E-4 IME

• Accurate IRB calculation
• Three-year rolling average
• Cap application
• IME revenue calculation

Cost report Worksheet E-3 Part IV DGME

• PRA application
• Medicare share calculation
• Resident count

MAC audit potential

• Palmetto GBA audits IME and DGME
• Resident time documentation review
• Cap administration review
• Adjustment potential

PRRB appeals

• Substantive disputes through PRRB
• Provider Reimbursement Review Board process

IME common compliance errors

1. Resident time documentation deficiencies: Patient care time documentation must support resident counts.

2. Inadequate research/teaching time tracking: Research and teaching time treatment requires careful documentation.

3. Cap administration errors: Resident counts must respect cap. Errors in cap application affect IME and DGME.

4. Affiliated group reallocation issues: Affiliated group cap sharing requires specific documentation.

5. FTE counting errors: 1.0 FTE cap per resident must be applied correctly.

6. IRIS reporting errors: IRIS data must accurately reflect resident activity.

7. Inadequate program approval documentation: ACGME accreditation status critical.

8. Patient care setting eligibility: Specific eligibility criteria must be met.

9. Three-year rolling average miscalculation: IME uses three-year rolling average; DGME does not.

10. PRA application errors: Hospital-specific PRA must be applied correctly.

11. Medicare share calculation errors: Medicare days / total days for DGME.

12. Available bed count errors: Denominator for IRB calculation.

13. New teaching hospital cap building issues: 5-year period requires careful tracking.

14. Cost report Worksheet E-4 and E-3 Part IV preparation errors: Complex calculations require expertise.

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Frequently asked questions about Georgia Medicare IME

What is the IME adjustment and who gets it?

The Indirect Medical Education (IME) adjustment increases Medicare IPPS payments to teaching hospitals based on the Resident-to-Bed Ratio (IRB), compensating for higher operating costs associated with training residents. Hospitals with active ACGME-accredited residency programs qualify for the adjustment.

What is the IME formula?

The IME formula calculates a percentage adjustment to base IPPS DRG payments based on the Resident-to-Bed Ratio (IRB), which equals the three-year rolling average resident FTE count divided by available beds. Higher IRB produces a higher IME adjustment through a non-linear relationship with decreasing marginal returns at higher ratios. Direct Graduate Medical Education (DGME) uses a separate methodology based on Per-Resident Amount, residents, and Medicare share.

What is the resident cap and why does it matter?

Section 4621 of the Balanced Budget Act of 1997 froze Medicare-funded resident counts at the levels in effect at the time of enactment. Both IME and DGME calculations use the lower of actual residents or the cap, permanently constraining Medicare GME growth at most teaching hospitals. Section 126 of CAA 2021 and Section 4122 of CAA 2023 added additional slots, including psychiatric subspecialty slots.

How does IME affect Medicare beneficiaries?

IME funding supports physician workforce development through residency training, which affects long-term beneficiary access to care. More directly, teaching hospitals provide complex subspecialty services, 24/7 physician coverage through the resident workforce, advanced technology, and serve as regional referral centers for conditions like complex cardiac surgery, cancer care, and transplantation.

Which Georgia hospitals receive IME funding?

Major Georgia teaching hospitals receiving substantial Medicare GME revenue include Emory University Hospital, Emory University Hospital Midtown, Grady Memorial Hospital, Augusta University Medical Center, Memorial Health Savannah, Wellstar Kennestone, Piedmont Atlanta, Northeast Georgia Medical Center, and Northside Hospital. Children's Healthcare of Atlanta receives CHGME funding from HRSA rather than Medicare IME. :::

IME, beneficiary access, and physician workforce

The IME adjustment and broader GME framework affect physician workforce, which in turn affects Medicare beneficiary access to care.

Workforce implications

• Medicare GME is the largest single funder of residency training nationally
• Cap-constrained framework limits residency growth
• Physician shortage concerns (especially primary care, psychiatry, geriatrics)
• Geographic distribution issues

Beneficiary perspective

For Medicare beneficiaries, adequate physician workforce is essential for:

• Access to primary care
• Access to specialists
• Hospital availability
• Care coordination
• Quality of care

Workforce shortage areas

Workforce shortages affect:

• Primary care (especially rural)
• Psychiatry
• Geriatrics
• General surgery in rural areas
• Various specialties

Georgia workforce considerations

Georgia faces physician workforce challenges:

• Rural physician shortages
• Primary care workforce gaps
• Psychiatric workforce shortage
• Geographic distribution within state

Policy implications

GME policy directly affects beneficiary access through physician workforce. Section 126 CAA 2021 and Section 4122 CAA 2023 expansions provide modest improvement but do not fundamentally address workforce alignment.

Hospital strategic considerations for IME

Hospital leadership considers IME in broader strategic context.

Revenue significance

For major teaching hospitals, IME revenue can represent:

• A significant share of total Medicare IPPS revenue
• Substantial absolute dollars for major academic medical centers
• Critical to teaching hospital financial model
• Supports infrastructure for academic mission

Cap management

• Maintain accurate resident counts
• Optimize within cap
• Consider affiliated group reallocation
• Apply for Section 126 CAA 2021 slots where eligible

Workforce planning

• Residency program design
• Specialty mix
• Workforce alignment
• Faculty recruitment

Quality and education integration

• Residency education quality
• Patient care quality
• Research integration
• Faculty development

Bond rating implications

Teaching hospital IME revenue affects:

• Financial stability
• Operating margin
• Bond ratings
• Access to capital markets

Worked example 7: Section 126 CAA 2021 application for Georgia hospital

A Georgia community hospital applying for Section 126 CAA 2021 slots:

• Hospital located in rural priority county
• Currently over its existing cap
• Affiliated with Mercer University School of Medicine
• Application submitted to CMS
• Granted 5 slots for family medicine residency
• 5 additional Medicare-funded residency slots
• Estimated incremental IME and DGME revenue: ~$1 million annually

The application process requires substantial documentation including:

• Hospital eligibility under priority categories
• Residency program plan
• Faculty commitments
• ACGME accreditation status or pending
• Educational quality assurance

Successful applications support both hospital workforce development and broader Georgia physician workforce alignment with rural health needs.

Worked example 8: rural training track for Georgia hospital

A Georgia community hospital establishing rural training track:

• Section 1886(h)(4)(H) rural training track cap adjustment
• Family medicine residency with rural rotation
• Section 4623(d) BBA 1997 provisions
• Cap adjustment to reflect rural training track
• Section 5505 ACA additional provisions

Rural training tracks provide pathway for community-based residency training while addressing rural physician workforce needs.

Worked example 9: affiliated group cap sharing

Two Georgia teaching hospitals in affiliated group share cap slots:

• Hospital A: cap of 30 residents, currently using 25
• Hospital B: cap of 20 residents, currently using 22 (over cap)
• Affiliated group total cap: 50 residents
• Reallocation: Hospital A "lends" 2 cap slots to Hospital B
• Hospital A effective cap: 28
• Hospital B effective cap: 22
• Total within affiliated group cap: 50

Affiliated group cap sharing provides flexibility within fixed total cap, allowing growth at one hospital offset by reduction at another within the same affiliated group.

Worked example 10: CHGME funding for CHOA

Children's Healthcare of Atlanta receives CHGME funding under Section 340E PHSA:

• Freestanding children's hospital
• Excluded from Medicare IPPS (and therefore IME)
• CHGME application through HRSA
• Annual congressional appropriation
• Funding based on pediatric residency activity
• Different funding mechanism from Medicare GME

CHGME provides essential funding for pediatric residency training at children's hospitals, supporting pediatric physician workforce development.

IME and Medicare beneficiary care quality

The IME framework supports teaching hospital infrastructure that affects Medicare beneficiary care.

Teaching hospital characteristics

Teaching hospitals typically have:

• 24/7 physician coverage (residents)
• Subspecialty availability
• Advanced technology
• Clinical research participation
• Quality improvement programs

Beneficiary access to teaching hospitals

Medicare beneficiaries often access teaching hospitals for:

• Complex cases
• Subspecialty care
• Cancer care
• Cardiac care
• Transplant
• Trauma

Teaching hospital quality

Research on teaching hospital quality is mixed:

• Higher quality for some complex conditions
• Comparable or sometimes lower quality for routine care
• Variation across teaching hospitals
• Important to consider hospital-specific quality

Beneficiary considerations

Medicare beneficiaries should consider:

• Specific clinical need
• Hospital quality metrics
• Specialty availability
• Coordination with primary care
• Care Compare quality information

Recent CMS rulemaking on IME

Annual IPPS final rule

Each year's IPPS final rule addresses IME and DGME including:

• Methodology refinements
• Cap administration
• Section 126 CAA 2021 implementation details
• Section 4122 CAA 2023 implementation
• Workforce shortage area definitions

COVID-19 modifications

Various pandemic-era IME and DGME modifications.

Future direction

• Section 4122 CAA 2023 ongoing implementation
• Potential additional GME reform
• Continued workforce alignment attention
• Health equity considerations

Working with Brevy and Georgia resources

Brevy publishes regularly updated guides at brevy.com on Medicare, Medicaid, hospital finance, and related topics. We do not provide GME consulting, audit, legal, or financial advice. We provide research-grade content explaining the framework so that Georgia teaching hospital teams, administrators, residents, and Medicare beneficiaries can understand how Medicare GME funding works.

For hospital provider IME and DGME questions, contact Palmetto GBA at 1-866-238-9650 or work with healthcare consulting and audit firms specializing in GME. Georgia Hospital Association at 770-249-4500 provides advocacy. Medical school GME offices provide residency program administration support. For Medicare beneficiary questions about teaching hospitals, contact Medicare at 1-800-MEDICARE, GeorgiaCares SHIP at 1-866-552-4464, or use Care Compare at medicare.gov/care-compare.

GME and physician workforce policy

The cap-constrained Medicare GME framework has become central to physician workforce policy debate.

Physician workforce projections

AAMC and other workforce researchers project significant physician shortages over the coming decades:

• Primary care shortage projections
• Specialty care shortage projections
• Geographic distribution challenges
• Specific specialty shortages (psychiatry, geriatrics, general surgery in rural areas)

Cap as workforce constraint

The Section 4621 BBA 1997 cap limits Medicare-funded GME growth. While alternative funding sources exist, Medicare is by far the largest GME funder. Cap constraint affects:

• Total GME capacity
• Geographic distribution
• Specialty mix
• Workforce alignment with need

Reform proposals

Various reform proposals address cap-constrained framework:

• Substantial cap expansion
• Performance-based GME funding
• Workforce alignment incentives
• Trust fund approach (IOM 2014 recommendation)
• All-payer GME funding
• Direct workforce planning approach

Recent expansion

Section 126 CAA 2021 and Section 4122 CAA 2023 provide modest expansion through additional slots over multiple years, but do not fundamentally change the cap-constrained framework affecting tens of thousands of slots.

Workforce alignment challenges

Current GME framework allocates slots based on a decades-old baseline rather than current workforce need. This creates misalignment with current workforce priorities including:

• Primary care needs
• Rural physician shortages
• Geriatric workforce
• Psychiatric workforce

Section 126 CAA 2021 implementation detail

Section 126 of the Consolidated Appropriations Act of 2021 implementation has been ongoing.

Application process

• CMS rulemaking establishes application criteria
• Hospitals apply for slots
• Priority categories evaluated
• Annual allocation of slots over multiple years

Priority category 1: Rural areas

Hospitals located in or affiliated with rural areas receive priority. "Rural area" definition follows specific criteria.

Priority category 2: Hospitals over cap

Hospitals currently operating over their existing cap receive priority for additional Medicare-funded slots.

Priority category 3: States with new medical schools

States that recently established new medical schools receive priority. This category recognizes need for residency capacity to absorb new medical school graduates.

Priority category 4: Health Professional Shortage Areas

Hospitals serving Health Professional Shortage Areas (HPSAs) receive priority.

Annual final rule allocation

CMS announces slot allocations annually through IPPS final rule and related procedural notices.

Georgia hospital participation

Several Georgia hospitals have applied for and received Section 126 slots, providing modest expansion of Georgia Medicare-funded GME capacity.

Effect on caps

Section 126 slots expand specific hospital caps but do not fundamentally reform the cap-constrained framework.

Section 4122 CAA 2023 implementation

Section 4122 of the Consolidated Appropriations Act of 2023 adds additional residency slots focused on psychiatric subspecialty.

Psychiatric focus

The Section 4122 slots target psychiatric workforce shortages including:

• General adult psychiatry
• Child and adolescent psychiatry
• Geriatric psychiatry
• Addiction psychiatry
• Forensic psychiatry

Distribution timeline

Distributed over multiple fiscal years per CMS rulemaking.

Application process

CMS rulemaking establishes specific implementation details.

Workforce significance

Psychiatric workforce shortage is acute across United States and Georgia. The Section 4122 slot addition addresses but does not fully resolve workforce shortage.

Georgia teaching hospital workforce planning

Major Georgia teaching hospitals engage in workforce planning that integrates GME considerations.

Strategic planning

Teaching hospitals plan residency programs based on:

• Workforce needs (institutional and community)
• Faculty capacity
• Patient mix and acuity
• Cap constraints
• Financial sustainability

Specialty mix

Hospital residency specialty mix reflects:

• Institutional needs (faculty recruitment, service delivery)
• Community workforce needs
• Medical school partnership requirements
• Funding constraints

Faculty development

Teaching hospitals invest in faculty development to support GME:

• Faculty recruitment
• Faculty retention
• Faculty teaching skills
• Research support

Educational infrastructure

GME requires substantial educational infrastructure:

• Simulation centers
• Educational technology
• Library and resources
• Conference and teaching space
• Educational administration

Quality and education integration

Modern teaching hospitals integrate quality improvement with GME:

• Residents engage in quality improvement
• Educational programs include quality topics
• Patient safety education
• Population health education

Detailed view of major Georgia teaching hospitals

Emory University Hospital and Emory Healthcare

Emory Healthcare operates multiple hospitals including Emory University Hospital (flagship), Emory University Hospital Midtown, Emory Saint Joseph's, Emory Decatur, Emory Hillandale, Emory Johns Creek, and Emory Wesley Woods. The Emory residency programs cover essentially all specialties and substantial subspecialty fellowships. Major Emory teaching hospitals receive substantial Medicare IME and DGME revenue supporting the academic medical center mission.

Grady Memorial Hospital

Grady Memorial Hospital is the major safety-net hospital in Atlanta and serves as primary teaching hospital for both Emory University School of Medicine and Morehouse School of Medicine. Grady supports residency training across multiple specialties including emergency medicine, internal medicine, surgery, OB/GYN, psychiatry, pediatrics, family medicine, and various subspecialty fellowships. Grady's combined safety-net and teaching mission creates substantial Medicare DSH and GME funding.

Augusta University Medical Center

AU Medical Center is the academic medical center for the Medical College of Georgia at Augusta University, Georgia's only public allopathic medical school. The hospital supports residency programs across multiple specialties, with particular focus on cancer care, cardiac care, transplantation, and pediatric services.

Memorial Health (HCA)

Memorial Health in Savannah is a teaching hospital affiliated with Mercer University School of Medicine. The residency programs focus on community-based training in family medicine, internal medicine, OB/GYN, and other community-relevant specialties.

Children's Healthcare of Atlanta

CHOA is a freestanding children's hospital with three campuses (Egleston, Scottish Rite, Hughes Spalding). CHOA receives CHGME funding under Section 340E PHSA rather than Medicare IME and DGME. CHOA supports pediatric residency programs in partnership with Emory and Morehouse pediatric departments.

Atlanta VA Medical Center

The Atlanta VA Medical Center supports VA-funded residency rotations through VA GME mechanism, separate from Medicare GME. The VA Medical Center participates in Emory residency programs with VA-funded rotations.

Wellstar Health System

Wellstar Health System operates multiple hospitals across metro Atlanta including Wellstar Kennestone (Marietta), Wellstar Cobb, Wellstar Atlanta Medical Center, and various other facilities. Wellstar Kennestone has been a community teaching hospital. Wellstar Atlanta Medical Center had been a major teaching hospital before its closure, creating significant disruption in Atlanta residency capacity.

Wellstar Atlanta Medical Center closure

The closure of Wellstar Atlanta Medical Center had significant implications for Georgia GME capacity. Section 5506 ACA 2010 provides for redistribution of slots from closing teaching hospitals to other hospitals, and the Wellstar AMC closure triggered such redistribution affecting Atlanta GME capacity.

Northeast Georgia Medical Center

NGMC in Gainesville supports residency programs serving northeast Georgia, with particular attention to community-based training for the region.

Piedmont Healthcare

Piedmont Atlanta and other Piedmont hospitals participate in GME at various levels.

Northside Hospital

Northside Hospital supports limited residency activity.

IME and Medicare beneficiary access

Teaching hospitals supported by IME provide essential services to Medicare beneficiaries.

Complex care

Teaching hospitals often provide complex care unavailable at non-teaching hospitals:

• Transplantation
• Complex cardiac surgery
• Major cancer care
• Complex neurosurgery
• Burn care
• Trauma (often Level I trauma centers)

Subspecialty availability

Teaching hospitals provide subspecialty availability:

• Subspecialty consultation
• Subspecialty procedures
• Multidisciplinary teams
• Advanced diagnostics

Geographic role

Teaching hospitals often serve as regional referral centers:

• Tertiary care for region
• Quaternary care for state or multi-state region
• Specialty service center

24/7 physician coverage

Teaching hospitals provide 24/7 physician coverage through resident workforce:

• Resident coverage of inpatient services
• Resident coverage of emergency department
• Resident coverage of critical care
• Resident response to emergencies

Beneficiary experience considerations

Teaching hospitals have specific beneficiary experience characteristics:

• Multiple providers involved in care
• Resident-attending physician relationships
• Educational activities involving patients (with consent)
• Often larger, more complex environments

Hospital cost report Worksheet E-4 IME detail

The Worksheet E-4 IME calculation on Form CMS-2552-10 has specific structure.

Line items

Worksheet E-4 captures:

• Resident counts (current year, two prior years)
• Three-year rolling average
• Cap application
• Available beds
• Resident-to-Bed Ratio
• IME formula application
• IME revenue

Documentation

• IRIS submission supports resident counts
• Available beds from Worksheet S-3
• Cap from prior cost reports
• Specific documentation requirements

MAC review

Palmetto GBA reviews IME calculation including:

• Resident count verification
• Cap application
• Available bed calculation
• Formula application
• Documentation adequacy

Audit potential

Specific audit areas include:

• Resident time documentation
• Patient care setting eligibility
• Research and teaching time treatment
• IRIS data reconciliation

Hospital cost report Worksheet E-3 Part IV DGME detail

The DGME calculation on Worksheet E-3 Part IV has specific structure.

Line items

Worksheet E-3 Part IV captures:

• Resident counts (capped)
• Per-Resident Amount
• Medicare share
• DGME revenue calculation
• Pass-through payment

PRA application

• Hospital-specific PRA
• Annual inflation adjustment
• Primary care vs other specialty treatment

Medicare share

• Medicare days / total days
• Hospital-specific calculation
• Generally similar to other Medicare share calculations

MAC review

Palmetto GBA reviews DGME calculation:

• Resident count verification
• PRA application
• Medicare share calculation

Specialty workforce considerations

GME policy intersects with specialty workforce needs.

Primary care

Primary care workforce concerns include family medicine, internal medicine, pediatrics, and geriatrics. Recent GME slot additions have prioritized primary care.

Psychiatry

Psychiatric workforce shortage is acute. Section 4122 CAA 2023 specifically addresses psychiatric subspecialty.

Geriatrics

Geriatric workforce is severely constrained. Limited geriatric medicine residency capacity.

Rural medicine

Rural physician workforce shortages persist. Rural training tracks and rural priority categories address but do not resolve.

General surgery

General surgery workforce concerns, particularly in rural areas.

Various subspecialties

Multiple subspecialty workforce concerns exist across various fields.

Compliance and audit considerations

IME and DGME compliance is complex and audit-intensive.

MAC audit

Palmetto GBA audits IME and DGME including:

• Resident time documentation
• Cap administration
• FTE calculation
• IRIS data
• Cost report accuracy

OIG audits

HHS-OIG conducts periodic audits of teaching hospitals:

• Compliance with rules
• Specific issue audits
• Cost report accuracy

PRRB appeals

Substantive disputes proceed through Provider Reimbursement Review Board:

• Provider Reimbursement Review Board procedural requirements
• Specific procedural requirements
• Administrative law judge review
• Potential judicial review

False Claims Act risk

Misrepresentation in IME and DGME claims can create False Claims Act risk. Compliance program essential.

Internal controls

Teaching hospitals maintain internal controls including:

• Resident time tracking
• IRIS data validation
• Cost report preparation review
• Internal audit
• Compliance program

Historical context of IME

The IME framework has historical context shaping current rules.

IPPS implementation 1983

The original IPPS implementation in 1983 included IME adjustment recognizing higher costs at teaching hospitals.

COBRA 1985 codification

Section 9202 COBRA 1985 codified IME formula structure.

Original calibration

The original IME calibration produced a more substantial adjustment than today, reflecting research evidence of teaching hospital cost differences.

BBA 1997 reduction

Section 4623 BBA 1997 reduced IME calibration to the current level. This reflected a policy decision about the appropriate subsidy level.

Continued debates

• Adequacy of current calibration
• Workforce policy alignment
• Performance-based funding consideration
• Equity considerations

Future direction of Medicare GME

Multiple potential reform directions exist.

Cap reform

• Significant cap expansion
• Cap reform to allow workforce alignment
• Specific specialty cap expansion

Performance-based GME

• Workforce alignment incentives
• Quality measures for residency programs
• Outcomes-based funding

Health equity

• Diversity in residency programs
• Workforce serving underserved areas
• Equity considerations

Funding diversification

• All-payer GME funding
• State-federal coordination
• Trust fund approach

Workforce planning integration

• National workforce planning
• Specialty mix alignment
• Geographic distribution

For Georgia teaching hospitals, the trajectory means continued attention to GME funding, cap administration, and workforce planning is essential.

Detailed IME and DGME interaction with other payment programs

IME and DGME interact with other Medicare hospital payment programs.

IME interaction with DSH

IME and DSH (Section 1886(d)(5)(F)) both adjust IPPS payments based on hospital characteristics. Major Georgia teaching hospitals serving DSH-qualifying populations receive both adjustments. Grady Memorial Hospital, for example, receives both substantial IME and substantial DSH.

IME interaction with wage index

IME applies to base operating IPPS DRG payments, which are wage-adjusted under Section 1886(d)(3)(E). Teaching hospital location in higher-wage CBSA increases base IPPS payment, and IME applies multiplicatively.

IME interaction with outlier payments

Outlier payments are not subject to IME adjustment. The interaction limits IME revenue for outlier cases.

DGME interaction with Medicaid GME

States including Georgia operate Medicaid GME programs separate from Medicare DGME. The combined GME funding affects teaching hospital total revenue.

Bundled payment interaction

Teaching hospitals participating in bundled payment programs (BPCI, BPCI Advanced) have specific treatment for IME and DGME.

ACO interaction

Teaching hospital participation in Medicare Shared Savings Program ACOs affects but does not eliminate IME and DGME.

State-level GME considerations for Georgia

Beyond Medicare GME, Georgia has state-level GME considerations.

Georgia Medicaid GME

Georgia operates Medicaid GME program through DCH, providing additional GME funding to teaching hospitals serving Medicaid populations. Combined Medicare and Medicaid GME funding for major Georgia teaching hospitals is substantial.

Georgia Board of Health Care Workforce

The Georgia Board of Health Care Workforce engages in physician workforce policy at the state level, including consideration of GME capacity and physician workforce needs.

Georgia Composite Medical Board

The Georgia Composite Medical Board licenses physicians and residents practicing in Georgia.

State workforce initiatives

Various Georgia state workforce initiatives address physician workforce, including:

• Loan repayment programs for rural and underserved area practice
• State-funded GME slots in some specialties
• Medical school capacity expansion
• Residency program development incentives

Physician shortage areas

Georgia has multiple Health Professional Shortage Areas (HPSAs) and Medically Underserved Areas. Workforce policy intersects with GME capacity.

IME and academic medicine

Beyond direct workforce development, IME supports broader academic medicine activities.

Clinical research

Teaching hospitals supported by IME conduct substantial clinical research:

• Phase I through IV clinical trials
• Investigator-initiated research
• NIH-funded research
• Industry-sponsored research
• Patient enrollment in trials provides access to investigational therapies

Medical education across continuum

Teaching hospitals support medical education at multiple levels:

• Medical student clinical rotations
• Resident training
• Fellowship training
• Continuing medical education for practicing physicians
• Other health professions education (nursing, pharmacy, etc.)

Innovation and dissemination

Teaching hospitals contribute to innovation and dissemination of new practices:

• Adoption of new technologies
• Implementation of new protocols
• Quality improvement leadership
• Patient safety leadership

Faculty practice

Teaching hospital faculty provide clinical care including:

• Direct patient care
• Subspecialty consultation
• Procedural expertise
• Teaching while providing care

Public health role

Many teaching hospitals serve public health roles:

• Emergency preparedness
• Disease surveillance
• Community health
• Population health initiatives

Resident and beneficiary perspectives on teaching hospitals

Both residents in training and Medicare beneficiaries receiving care interact with teaching hospitals.

Resident perspective

Residents in Georgia teaching hospitals navigate substantial workload and educational demands:

• Long working hours subject to ACGME duty hour limits
• Patient care responsibility under attending supervision
• Educational activities (didactic conferences, simulation, case-based learning)
• Research opportunities
• Career planning and fellowship preparation
• Wellness considerations

Resident compensation is funded substantially through Medicare DGME PRA. Variation in PRA across hospitals affects resident compensation levels.

Resident workforce contribution

Residents provide substantial clinical workforce while training:

• 80+ hour workweeks (subject to limits)
• Direct patient care
• Procedural participation
• Consultation services
• 24/7 coverage

The resident workforce contribution to teaching hospitals is substantial, exceeding direct training costs in many analyses.

Beneficiary care at teaching hospitals

For Medicare beneficiaries receiving care at Georgia teaching hospitals:

• Multiple providers involved (residents, attendings, consultants)
• Complex care coordination
• Educational activities involving patients
• Often longer care discussions
• Multidisciplinary team approach
• Advanced technology availability
• Subspecialty access

Beneficiary consent for teaching activities

Federal regulations require beneficiary consent for specific teaching activities. Hospitals must inform patients about resident involvement and obtain appropriate consent.

Quality at teaching hospitals

Research on teaching hospital quality is mixed but generally suggests:

• Higher quality for complex conditions
• Comparable quality for routine care
• Variation across teaching hospitals
• Important to consider individual hospital quality metrics

Additional federal GME-related provisions

Several additional federal provisions relate to GME beyond Medicare IME and DGME.

Section 1886(h)(5)(B) - PRA cap structure

Detailed PRA cap provisions limit per-resident amount.

Section 1886(h)(7) - reasonable cost limits

Reasonable cost limits affect DGME calculation in specific circumstances.

Section 422 MMA 2003 - cap restoration

Section 422 of the Medicare Modernization Act of 2003 restored caps for certain hospitals meeting specific criteria.

Section 1886(h)(4)(I) - new rural training tracks

Specific cap provisions for new rural training tracks.

Recent CMS rulemaking implementation

Annual IPPS final rules continue to refine GME methodology including:

• Resident counting refinements
• Cap administration
• Section 126 CAA 2021 implementation
• Section 4122 CAA 2023 implementation
• Various technical clarifications

Disclaimers

This article is for educational purposes only and does not constitute legal, financial, GME, audit, compliance, or medical advice. IME and DGME rules are subject to change through CMS rulemaking, congressional action, and ongoing administrative guidance. The information in this article reflects rules in effect as of May 2026. Always verify current IME and DGME rules at cms.gov and through current ACGME accreditation status before making decisions.

Brevy is not affiliated with CMS, HRSA, HHS, ACGME, AAMC, AHA, AMA, Palmetto GBA, MedPAC, or any hospital or medical school. Brevy is an eldercare research and information company. We accept no compensation from healthcare providers, hospitals, medical schools, insurance carriers, audit firms, consulting firms, or other parties.

Find personalized help navigating Medicare GME programs in Georgia at brevy.com.

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Get help with Medicare IME, DGME, and graduate medical education questions in Georgia

Federal agencies

• Medicare: 1-800-MEDICARE (1-800-633-4227) for general questions
• CMS Provider Enrollment: 1-866-484-8049 for enrollment
• HRSA: hrsa.gov for CHGME and THCGME
• HHS-OIG hotline: 1-800-447-8477

Georgia state agencies

• Georgia Department of Community Health: 1-866-211-0950
• Georgia Board of Health Care Workforce: physician workforce policy
• Georgia Composite Medical Board: physician and resident licensure
• GeorgiaCares SHIP: 1-866-552-4464 for Medicare beneficiary counseling

Medical schools and ACGME

• ACGME: acgme.org for residency program accreditation
• AAMC: aamc.org for medical school and GME information
• Emory University School of Medicine: emoryhealthcare.org
• Morehouse School of Medicine: msm.edu
• Medical College of Georgia: augusta.edu/mcg
• Mercer University School of Medicine: medicine.mercer.edu

Medicare Administrative Contractor

• Palmetto GBA: 1-866-238-9650 for provider questions

Legal and consumer assistance

• Atlanta Legal Aid: 404-377-0701
• Georgia Legal Services: 1-800-498-9469
• Medicare Rights Center: 1-800-333-4114

Healthcare financial management

• Healthcare Financial Management Association (HFMA) Georgia Chapter
• Georgia Hospital Association: 770-249-4500

Healthcare policy resources

• MedPAC: Medicare Payment Advisory Commission analyses
• COGME: Council on Graduate Medical Education
• AAMC GME resources
• AHA GME resources

Workforce resources

• Georgia Board of Health Care Workforce
• National Resident Matching Program (NRMP)
• Health Resources and Services Administration (HRSA)

Additional resources

• 211 Georgia: dial 211 for community resources
• Eldercare Locator: 1-800-677-1116
• Care Compare: medicare.gov/care-compare for hospital information

Brevy

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