We provide a Pro-forma & Finance service where we take a look at your facilities'  cost report and determine if it is financially feasible to sponsor ACGME internship, residency and/or fellowship programs.

 

Taking into account all of the administrative steps, hospitals estimate their start-up funding budgets based  on the number of programs, number of resident/fellow slots, number of faculty to recruit, etc. Identifying a source for this start-up funding is critical because  Medicare GME funds are not provided  to cover a new Institution’s start-up cost. Medicare GME funds do not begin to accrue until the first resident is actually on site. That means that the hospital needs to be able to fund the program for the first 16-18 months after the first resident sets foot in the institution.

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Medicare Makes Two Specific Payments Under “CMS Education” Label

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Direct Graduate Medical Education (DGME) Payments

•    (Partially compensates for residency education costs)
•    Salaries/benefits of residents/fellows and faculty physicians; program administration; overhead costs
•    (Per Resident Amount (PRA) x Number of FTE Residents) x Medicare “patient load”

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Establishing the Per Resident Amount (PRA)

•    Calculated using first full cost reporting period with residents/fellows
•    PRA = LOWER of PRA based on new hospital’s actual GME costs OR Weighted mean PRA of all hospitals in same geographic wage area
•    Once established, the PRA is permanent
 

Second Payment under "CMS Education" Label

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Indirect Medical Education (IME) Payments

(Partially compensates for higher patient care costs due to presence of teaching programs)
•    Compensates teaching hospitals for higher inpatient operating costs due to
▪    unmeasured patient complexity not captured by the DRG system and other operating costs associated with being a teaching hospital
•    Percentage add-on payment to basic Medicare per case DRG payment
▪    Formula: Multiplier x ((1+IRB) 0.405 -1)
•    The formula multiplier of 1.35 represents a 5.5 percent increase in IME payment for every 10 percent increase in the resident-to-bed ratio.

 

The Medicare program will grant your institution a five-year window to establish your permanent cap. Your five-year window will start  on the first day you begin to train residents in your first new residency/fellowship program. The window will close at the end of the fifth  year  from the beginning of your first program and your permanent cap will be effective as of  the first day of the sixth year from the beginning of your  first  program. During the five-year window, you will be paid based on your actual resident FTE count and will not be held to any limit on resident FTEs.

 

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