Analysis of the Children's Hospital Graduate Medical Education Program Fund Allocations for Indirect Medical Education Costs.

Abstract : Public Law No. 106-129 amended the Public Health Service Act to establish a new Children's Hospital Graduate Medical Education (CHGME) program to support graduate medical education (GME) in children's hospitals. The provision authorizes payments for both the direct (DGME) and indirect medical education (IME) costs associated with operating approved GME programs. With respect to the IME funds, the statute requires the Secretary to determine an amount based on the indirect expenses associated with the treatment of more severely ill patients and the additional patient care costs related to residency training programs. The Health Resources and Services Administration (HRSA) has elected to use the current Medicare formula for hospital inpatient operating costs to establish the IME allocation factor for the CHGME program. A hospital's allocation is a function of its discharges, case mix index, ratio of residents-to-beds and the average hourly wages in the geographic area in which the hospital is located. A hospital's IME factor increases 6.5 percent for each .10 increment in its ratio of residents-to-beds.