Dobson | DaVanzo & Associates, LLC was commissioned by the Children’s Hospital Association to analyze historic payments to children’s hospitals under CHGME and project per-resident payment levels to recipient hospitals under different future funding scenarios for the CHGME program. These CHGME payments were then compared to Medicare IME and DGME payments received by general acute care teaching hospitals’ on a per resident basis to determine the discrepancy in payment levels.
The Children’s Hospital Graduate Medical Education (CHGME) Payment Program provides funding to freestanding Children’s teaching hospitals to support the training of medical residents. CHGME payments to hospitals are based on a given hospital’s per full time equivalent (FTE) residency position count in addition to other characteristics of the hospital (e.g., case-mix index, patient volume, wage index, etc.).
General acute care teaching hospitals receive Medicare funding to support their residency programs through direct and indirect medical education payments. Medicare Direct Graduate Medical Education (DGME) supports Medicare’s share of the direct cost of residents and is based on each hospital’s FTE residency count (up to a limit), a per-resident cost amount, and its Medicare utilization (i.e., Medicare inpatient days as a percent of total inpatient days). General teaching hospitals also receive Medicare payments to cover the indirect cost of medical education (IME) that is paid as an add-on to the Medicare payment amount for each Medicare inpatient discharge and is based on a hospital’s resident-to-bed ratio. IME payments are intended to provide additional funding for the higher hospital costs associated with teaching programs and their missions.