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Children's Hospitals Graduate Medical Education Payment Program

No Children's Hospitals Graduate Medical Education Payment Program grant competition is planned for FY 2015.


The Children's Hospitals Graduate Medical Education (CHGME) Payment Program provides federal funds to the Nation’s freestanding children's hospitals to help them maintain their graduate medical education (GME) programs that train resident physicians. GME follows graduation from medical school and can take between three and seven years to complete, depending on the medical, dental or podiatric specialty track chosen. Teaching hospitals that treat adults receive similar funding from Medicare.

Fifty-four U.S. hospitals participate in the program, which enables them to:

  • Provide GME to graduates of medical schools
  • Enhance research capabilities
  • Care for vulnerable and underserved children

How CHGME Payment Program Works

Each summer, eligible hospitals complete and submit an initial application. Using data from those applications, the program calculates the payments that each hospital will receive from direct medical education (DME) and indirect medical education (IME).

DME funding is designed to cover costs associated with stipends for residents, salaries, salaries for faculty, overhead and other costs of running a training program. IME funding is designed to assist in expenditures such as reduced productivity of staff training residents and the processing of additional diagnostic tests those residents may order.

During the months of October through March, audits of reported resident counts are conducted by fiscal intermediaries.

In the spring, each hospital submits a reconciliation application used to determine the final DME and IME payments.


A hospital is eligible to apply for CHGME Payment Program funding if it:

  • Participates in an approved Graduate Medical Education (GME) program
  • Has a Medicare Provider Agreement
  • Is excluded from the Medicare Inpatient Prospective Payment System (IPPS) under section
    1886(d)(1)(B)(iii) of the Social Security Act, and its accompanying regulations
  • Operates as a “freestanding” children’s teaching hospital.

A hospital remains eligible for payments as long as it trains residents as a “freestanding” children’s hospital during the federal fiscal year for which CHGME Payment Program payments are made.