CMS Pub. 100-16, ch. 8, § 150

Graduate Medical Education Costs

(Rev. 89; Issued: 11-02-07; Effective/Implementation: 11-02-07)

This provision was mandated by the Balance Budget Act of 1997, and is implemented at 42

CFR 422.324. The MMA did not amend this provision. These rules should not be

confused with the medical education adjustments to the FFS capitation rates, defined at

§20.2.

The MA organizations may receive direct graduate medical education payments for the

time that residents spend in non-hospital provider settings such as freestanding clinics,

nursing homes, and physicians' offices in connection with approved programs if all of the

following conditions are met:

1. The resident spends his or her time assigned to patient care activities;

2. The MA organization incurs "all or substantially all" of the costs for the training

program in the non-hospital setting as defined at 42 CFR 413.86(b); and

3. There is a written agreement between the MA organization and the non-hospital site

that indicates the MA organization will incur the costs of the resident's salary and

fringe benefits, and provide reasonable compensation to the non-hospital site for

teaching activities.

An MA organization's allowable direct graduate medical education costs, subject to the

redistribution and community support principles specified in 42 CFR 413.85(c), consist of:

1. Residents' salaries and fringe benefits (including travel and lodging where

applicable); and

2. Reasonable compensation to the non-hospital site for teaching activities related to

the training of medical residents.

The direct graduate medical education payment is equal to the product of:

1. The lower of:

o The MA organization's allowable costs per resident as defined in paragraph

(c) of this section; or

o The national average per resident amount; and

2. Medicare's share, which is equal to the ratio of the number of Medicare

beneficiaries enrolled to the total number of individuals enrolled in the MA

organization.

Direct graduate medical education payments made to MA organizations under this section

are made from the Federal Supplementary Medical Insurance Trust Fund.