There is currently a bill in Congress to raise the caps by 17,000.
When I was just a young cub in healthcare, Medicare performed audits of all teaching hospitals. These audits were designed to create rates to remove the “passthrough” rates for the last big item still paid under cost reimbursement: the cost of training graduate medical education interns and residents.
For those who don’t know it, Medicare is the largest funder of graduate medical education in the country. In what would become a boon for teaching hospitals and universities, starting in 1997, Medicare would pay two types of payments to teaching hospitals.
First, Medicare would pay its share of direct costs. It would compute that by determining an average per-resident amount, or APRA, from a base year period. Then the total reimbursable cost would be computed by taking that figure and multiplying it by the number of full-time residents. Finally, Medicare would determine its portion based on the number of Medicare days divided by total patient days.
In addition, Medicare would pay an additional indirect medical education payment, because in theory, the residents made the rendering of care more expensive. This amount would be computed by taking the ratio of the number of residents to the number of available beds in the hospital.
In both of the above computations, the number of residents would be limited to those counted on the hospitals’ 1997 cost reports. In completely insane Medicare fashion, those caps have not materially changed in 25 years. As programs grew and programs shrank or closed, the number of hospitals capped at the 1997 limit grew. Currently, on Medicare cost reports across the country, over 78,000 residents are counted for the above computations. The total “over the cap” amount across the country is over 16,000.
In January, Medicare announced that it was raising the cap on the number of residents used to compute payments to teaching hospitals. The cap would be raised by 1,000 residents, at a rate of 200 per year. There is currently a bill in Congress to raise the caps by 17,000.
It seems that the larger discussion to be had is whether or not the current payment mechanism is fair, and whether Medicare should pay teaching hospitals so much for training residents at the cost of cutting payments to non-teaching hospitals.
As the Centers for Medicare & Medicaid Services (CMS) clarifies existing Medicare policies like the Two-Midnight Rule, which guides the appropriateness of inpatient services, some
Today we’re talking about a major shift in Medicare rules that’s going to impact hospitals, surgeons, and physician advisors alike: the phasing out of the
Please log in to your account to comment on this article.
Uncover essential coding insights with nationally recognized coding authority Kay Piper, RHIA, CDIP, CCS. Through ICD10monitor’s interactive, on‑demand webcast series, Kay walks you through the AHA’s 2026 ICD‑10‑CM/PCS Quarterly Coding Clinics, translating each update into practical, easy‑to‑apply guidance designed to sharpen precision, ensure compliance, and strengthen day‑to‑day decision‑making. Available shortly after each official release.
Uncover critical guidance on the ICD-10-CM/PCS code updates. Kay Piper reviews and explains ICD-10-CM/PCS coding guidelines in the AHA’s fourth quarter 2026 ICD-10-CM/PCS Coding Clinic in an easy to access on-demand webcast.
Uncover critical guidance on the ICD-10-CM/PCS code updates. Kay Piper reviews and explains ICD-10-CM/PCS coding guidelines in the AHA’s third quarter 2026 ICD-10-CM/PCS Coding Clinic in an easy to access on-demand webcast.
Uncover critical guidance on the ICD-10-CM/PCS code updates. Kay Piper reviews and explains ICD-10-CM/PCS coding guidelines in the AHA’s second quarter 2026 ICD-10-CM/PCS Coding Clinic in an easy to access on-demand webcast.
Federal auditors are intensifying their focus on inpatient psychiatric facilities, using advanced data analytics to spotlight outliers and pursue high‑dollar repayments. In this high‑impact webcast, Michael Calahan, PA, MBA, Compliance Officer and V.P., Hospital & Physician Compliance, breaks down what regulators are really targeting in IPF-PPS admissions, documentation, treatment and discharge planning. Attendees will learn practical steps to tighten processes, avoid common audit triggers and protect reimbursement and reduce the risk of multimillion-dollar repayment demands.
In this timely session, Stacey Shillito, CDIP, CPMA, CCS, CCS-P, CPEDC, COPC, breaks down the complexities of Medical Decision Making (MDM) documentation so providers can confidently capture the true complexity of their care. Attendees will learn practical, efficient strategies to ensure documentation aligns with current E/M guidelines, supports accurate coding, and reduces audit risk, all without adding to charting time.
Join Ronald Hirsch, MD, FACP, CHCQM for The PEPPER Returns – Risk and Opportunity at Your Fingertips, a practical webcast that demystifies the PEPPER and shows you how to turn complex claims data into actionable insights. Dr. Hirsch will explain how to interpret key measures, identify compliance risks, uncover missed revenue opportunities, and understand new updates in the PEPPER, all to help your organization stay ahead of audits and use this powerful data proactively.
Stay ahead of the 2026-2027 audit surge with “Top 10 Audit Targets for 2026-2027 for Hospitals & Physicians: Protect Your Revenue,” a high-impact webcast led by Michael Calahan, PA, MBA. This concise session gives hospitals and physicians clear insight into the most likely federal audit targets, such as E/M services, split/shared and critical care, observation and admissions, device credits, and Two-Midnight Rule changes, and shows how to tighten documentation, coding, and internal processes to reduce denials, recoupments, and penalties. Attendees walk away with practical best practices to protect revenue, strengthen compliance, and better prepare their teams for inevitable audits.
Prepare for the 2025 CMS IPPS Final Rule with ICD10monitor’s IPPSPalooza! Click HERE to learn more
Get 15% OFF on all educational webcasts at ICD10monitor with code JULYFOURTH24 until July 4, 2024—start learning today!
CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 1 with code CYBER25
CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 2 with code CYBER24
