For years, a continuing source of confusion for academic medical centers has been whether particular individuals undertaking advanced training and labeled as "fellows" are considered to be "residents," paid for under the Medicare Direct Graduate Medical Education (DGME) and Indirect Medical Education (IME) formulae, or physicians whose services are reimbursed only through the Medicare Physician Fee Schedule. CMS has now provided substantial clarification to that issue, as part of the inpatient PPS final rule issued August 16, 2010. Ober|Kaler's Thomas W. Coons discusses the rule.