Graduate Medical Education Grants

Graduate Medical Education Grants

Graduate medical education grants are given to meet the nation’s health needs. Direct and indirect GME funding is intended to support resident reimbursement and the higher costs of supporting a teaching program.

With the growing diverse population in the United States, there is an urgent need to train a modern healthcare workforce.

They must attain the skills to provide care in a rapidly evolving environment.

Physicians develop such skills from graduate medical education (GME), a residency and fellowship training period after graduation.

GME is a vital pipeline; grants are offered to cover the costs.

Graduate Medical Education Grants – What Is GME and How Is It Funded?

Graduate Medical Education (GME) comprises all the training medical students receive after graduation to be practicing physicians. In other words, GME means fellowship and residency.

GME grants are available through multiple mechanisms, including federal, state, and other private entities.

The federal government is the largest and primary funding source for GME, and its funds flow through Direct GME (DGME) and Indirect Medical Education (IME). The Centers for Medicare and Medicaid Services (CMS) controls both DGME and IME grants.

Direct Graduate Medical Education Grants (DGME) help to pay for direct teaching costs, including salaries of residents and faculty, and other direct expenses.

Indirect Medical Education (IME) grants are primarily used to compensate teaching hospitals for the additional costs associated with teaching residents, including patient care costs. For more information, visit

Graduate Medical Education Grants – Federal Role in GME

The federal government makes notable investments in GME grants through Medicare and Medicaid programs.

These programs are run by the Centers for Medicare & Medicaid Services (CMS) administered by the U.S. Department of Health and Human Services (HHS).

HRSA supports primary care training in outpatient facilities through programs like the Teaching Health Center GME (THCGME), which are separate from the training programs at VA and DOD facilities.

It also assists in rural GME program development and training in children’s hospitals.

The American Association of Medical Colleges (AAMC) is a private and nonprofit organization that represents U.S.-accredited medical schools and teaching hospitals. It emphasizes physician supply and the use of new care models to avert shortages.

Federal Support for Graduate Medical Education

The federal government supports the health and physician workforce through several programs.

  • Medicare

Medicare is the largest federal program of GME that supports and enhances the quality of educational activities.

The Medicare program covers health care services for qualified beneficiaries. Medicare provides GME payments based on factors, including a teaching hospital’s full-time equivalent (FTE) residents.

However, Medicare GME funding is not bound to a specific resident; multiple residents may occupy one FTE. For more information, visit

  • Medicaid

Medicaid is a joint federal-state program and provides the second-largest GME support. The Medicaid States follow federal rules to receive federal matching funds; however, they can design and administer their versions of Medicaid.

Individual states administer Medicaid GME payments within federal guidelines, and information about these payments can be studied in reports from organizations such as AAMC and GAO.

AAMC and GAO provide detailed information about the professions eligible for Medicaid GME payments. Most states support training programs for physician residents and health professionals, such as nurses and practitioners, dentists, physician assistants, podiatrists, and allied health professionals.

  • Department of Veterans Affairs (VA)

Training healthcare professionals, including physicians, is part of the VA’s statutory mission. The aim is to provide adequate health professionals for the overall health of the VA’s health system.

Generally, about 45,000 individual physician residents receive clinical training each year by rotating through around 11,000 funded physician FTE residency positions at VA medical facilities.

  • Health Resources and Services Administration (HRSA)

The HRSA supports GME through two programs: The children’s Hospital GME Program (CHGME) and the Teaching Health Center GME (THCGME). The CHGME program offers training to pediatric subspecialists and general pediatricians, while the THCGME provides training to residents in outpatient psychiatry and primary care settings.

In addition to these programs, HRSA receives appropriations to support GME-related programs. The CHGME program, administered by HRSA, receives appropriations to support pediatric training.

The second HRSA program receives around $10 million to assist the Rural Residency Development program, which includes funding for rural hospitals to develop rural training tracks.

  • Department of Defense (DOD)

The Department of Defense (DOD) assists residents who have acquired a uniformed service obligation through a DOD physician training program.

Some examples are the Uniformed Services University of the Health Sciences (USUHS) and the Health Profession Scholarship Program.

The USUHS students receive the pay and benefits of an officer. Under the Health Profession Scholarship Program, DOD pays tuition and fees and a monthly stipend for students registered in civilian medical schools.


The federal government offers many programs that support graduate medical education grants. Various departments across the federal government operate these programs, each with its own stated program goals.

Graduate medical education grants aim to support a more targeted, performance-based investment in our future healthcare workforce training.

It helps build social infrastructure that encourages health equity, provides universal health coverage, and decreases the financial burden of medical education.

See Also

How to Become a Dermatologist

Student Loan Forgiveness for Healthcare Workers

Hardship Grants for Single Mothers

Current Version
May 1, 2024
Updated By
Andrea Morales G.
March 15, 2021
Written By
Victoria Abigail Friedland

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