A district court in Washington, DC ruled today that a regulation governing the weighting of fellows for purposes of determining certain hospitals’ Medicare resident caps and graduate medical education (GME) payments is unlawful. Originally issued by the Department of Health and Human Services (HHS) in 1997, the rule provides a formula for weighting residents that, in the judge’s view, conflicts with a statutory requirement that fellows be weighted at a factor of .50. Plaintiff hospitals (over 50 in number) filed suit, claiming they were entitled to additional Medicare direct GME payments dating back as far as 2005. The D.C. district court declared HHS’ rule unlawful as applied to the plaintiff hospitals, remanding the case back to HHS to recalculate the plaintiffs’ GME payments (with interest). Assuming the decision is not appealed or overturned, hospitals not participating in the lawsuit, but that are training in excess of their cap and train fellows, may be able to bring similar claims by contesting this issue in a future cost report and filing an administrative appeal.