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Doctor's Desk

Graduate Medical Education 101

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  • GME stands for “graduate medical education,” more commonly referred to as ”residency” and “fellowship” training.

  • The 3 to 9 years of training allows physicians to specialize and practice independently following medical school.

  • The length of residency depends on the medical specialty; for primary care specialties (family medicine, general pediatrics, general internal medicine), residency training is 3 years.

  • Protecting funding for this specialty training means that more residents learn to provide the hands-on care patients need, when they need it.

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  • Payment for GME comes from three main sources: patient revenue, Medicare GME payments, and the sponsoring hospital; additionally, residencies in some states receive Medicaid GME and some individual programs receive grant funding.

  • Patient revenue The amount generated by residencies varies widely, depending on the medical specialty.

  • Medicare GME payments are provided by the federal government to offset the cost of residency training; the amount of these payments varies widely.

  • Sponsoring hospital: A third source of payment for GME comes from the hospitals that sponsor residencies. If payments do not equal the costs of GME, the hospital pays for the deficit.


  • Was initiated 50 years ago, has been modified periodically.

  • Is calculated based on complex formulas that include the number of residents in a hospital and the proportion of Medicare inpatient “bed days” in that hospital per year.

  • Was designed to offset costs to hospitals, where residency training traditionally occurred.

  • Continues to be most effective for residencies that are hospital-based medical specialties.

  • Medicare GME Payments can be made only to hospitals, not ambulatory clinics or primary care residencies.

  • Hospitals that receive GME payments determine the type of residencies they sponsor; a significant portion (21%) of teaching hospitals do not produce any primary care physicians.

  • There are significant inequities in payments between states and between hospitals, and the formulas that create these inequities do not correlate with the cost of running a residency.

  • Due to the GME cap, existing residencies do not receive GME payments if they increase the number of training positions.

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