Potential GME Impact Following CMS 2026 IPPS Proposed Rules
- Scott Masin, MBA
- 2 minutes ago
- 3 min read
On April 15, Centers for Medicare & Medicaid Services (CMS) published the Proposed 2026 IPPS Rules.
The Proposed 2025 IPPS Rules, published last April, proposed changes that would impact the eligibility for CMS funding for new programs, specifically related to program newness criteria (see more in this previous blog post: Potential GME Impact Following CMS 2025 IPPS Proposed Rules). The Final 2025 IPPS Rules, published last August, provided no substantive updates regarding program newness specification, nor do the Proposed 2026 IPPS Rules.
As part of the Proposed 2026 IPPS Rules, CMS publishes proposed data related to Core Based Statistical Areas (CBSAs) and their corresponding Average Hourly Wages and Wage Indexes.
From a high-level, there are 469 unique CBSAs, 17 of which are in Frontier States (see State Frontier Floor discussion below). Of the remaining 452 CBSAs, 64% are paid at the Rural Floor and 36% are paid at urban rates that are higher than the Rural Floor. The majority of CBSAs being paid at the Rural Floor of their respective states is a reflection of an updated policy published in the Final 2024 Final IPPS rules published in August 2023. The updated policy requires CMS to perform three separate calculations of the Rural Floor for each state and then assigns the highest calculation as the Rural Floor for that state. The primary issues surrounding each calculation are how to treat hospitals reclassified under §412.103 and hospitals reclassified to other wage index areas.
Germane Solutions has summarized select sections of the Proposed 2026 IPPS rules regarding topics that will ultimately affect Graduate Medical Education as follows:
Redistribution of Closed Hospitals’ IME and DGME Slots (Section 5506 Rounds 24 and 25)
Round 24 – Wahiawa General Hospital (12-0004), located in Wahiawa, HI has recently closed. Through section 126 of the Affordable Care Act, CMS will redistribute 17.16 IME FTEs and 14.31 DGME FTEs.
Round 25 – Carney Hospital (22-0017), located in Boston, MA has also recently closed. Through section 126 of the Affordable Care Act, CMS will redistribute 63.15 IME FTEs and 61.14 DGME FTEs.
If your hospital or health system is considering applying for cap redistribution through Section 5506, please contact us for our assistance and guidance
State Frontier Floor PolicyÂ
Cap on Wage Index Decrease
Low Wage Index Hospital Policy
Calculating Full Time Equivalent (FTE) Values for Stub Cost ReportsÂ
DGME Reduction Factor for Medicare Advantage (MA)Â
If you have any questions regarding these recently proposed changes and how they may impact your organization, please contact us. Our team of GME experts is happy to meet and discuss how these proposed rulings apply to your current environment and strategy.