---
kind: "section"
citation: "42 C.F.R. § 422.324"
title: "42"
number: "422.324"
heading: "Payments to MA organizations for graduate medical education costs."
url: "https://uscodex.org/cfr/42/422.324"
---

# §422.324. Payments to MA organizations for graduate medical education costs.

- (a) MA organizations may receive direct graduate medical education payments for the time that residents spend in non-hospital provider settings such as freestanding clinics, nursing homes, and physicians' offices in connection with approved programs.
- (b) MA organizations may receive direct graduate medical education payments if all of the following conditions are met:
  - (1) **The resident spends his or her time assigned to patient care activities.**
  - (2) The MA organization incurs “all or substantially all” of the costs for the training program in the non-hospital setting as defined in [§ 413.75(b)](/cfr/42/413.75.md?p=b) of this chapter.
  - (3) There is a written agreement between the MA organization and the non-hospital site that indicates the MA organization will incur the costs of the resident's salary and fringe benefits and provide reasonable compensation to the non-hospital site for teaching activities.
- (c) An MA organization's allowable direct graduate medical education costs, subject to the redistribution and community support principles specified in [§ 413.85(c)](/cfr/42/413.85.md?p=c) of this chapter, consist of—
  - (1) Residents' salaries and fringe benefits (including travel and lodging where applicable); and
  - (2) Reasonable compensation to the non-hospital site for teaching activities related to the training of medical residents.
- (d) **The direct graduate medical education payment is equal to the product of—**
  - (1) **The lower of—**
    - (i) The MA organization's allowable costs per resident as defined in [paragraph (c)](#c) of this section; or
    - (ii) The national average per resident amount; and
  - (2) Medicare's share, which is equal to the ratio of the number of Medicare beneficiaries enrolled to the total number of individuals enrolled in the MA organization.
- (e) Direct graduate medical education payments made to MA organizations under this section are made from the Federal Supplementary Medical Insurance Trust Fund.

## Notes

### Amendments

[70 FR 4729, Jan. 28, 2005, as amended at 85 FR 72909, Nov. 16, 2020]

### Source

Source: 70 FR 4729, Jan. 28, 2005, unless otherwise noted.

### Authority

Authority: 42 U.S.C. 1302, 1306, 1395w-21 through 1395w-28, and 1395hh.

### Source

Source: 63 FR 18134, Apr. 14, 1998, unless otherwise noted.

### Amendments

[70 FR 4729, Jan. 28, 2005, as amended at 85 FR 72909, Nov. 16, 2020]