Medicare's Indirect Medical Education (IME) adjustment uses the hospital's resident-to-bed ratio as the principal measure of teaching intensity. CMS explains that the IME adjustment factor is calculated using a hospital's ratio of residents to beds. Therefore, the correct answer is inpatient beds.

IME is an additional IPPS payment intended to recognize the higher indirect patient-care costs associated with operating an approved teaching program. These costs are distinguished from Direct Graduate Medical Education payments, which reimburse qualifying direct costs associated with residency training.

The number of admissions is not the denominator in the IME teaching-intensity calculation. Likewise, emergency-department beds are not simply combined with inpatient beds for the standard resident-to-bed ratio, and disproportionate-share payment rates represent a separate IPPS adjustment related principally to hospitals caring for substantial numbers of low-income patients.

For the CCDS examination, the important distinction is that IPPS reimbursement involves more than the base MS-DRG payment. Adjustments may include IME, disproportionate-share hospital provisions, wage-index effects, outlier payments, and other statutory mechanisms.

CCDS Reference Topics: IPPS reimbursement; teaching hospitals; IME adjustment; resident-to-bed ratio.

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