The 'Direct Medical Education' payment is cut to 50%. Depending on the patient structure of the hospital, this DME component is typically about 40k (20k after the 'initial residency period' runs out).
The 'Indirect Medical Education' payment is not affected by the length or number of your residencies. Depending on the patient and payor structure of the hospital, this is anywhere between 60k and 120k.
So, bottom line, your funding drops by approx 20k (or 20%) from what it could be if you where fresh out of medschool. This can be a reason for hospitals that have to rely on GME funding NOT to take you. At larger wealthier institutions where GME payments are just a small part of the mix, it makes less of a difference. Total number of funded residency slots is capped at 1997 levels for each hospital. Some places have grown their residencies nevertheless and just funded the extra slots out of patient care and endowment $$s (at one place in my training, 100 'funded' slots paid for 170 residents salaries).
There is a brochure on the AAMC website that explains some of the issues:
https://services.aamc.org/Publicati...version57.pdf&prd_id=153&prv_id=180&pdf_id=57
And here a slightly politically slanted explanation on how the feds arrive at the numbers they pay to the hospitals:
http://www.amsa.org/pdf/Medicare_GME.pdf
Knowledge is power. Some PDs have the impression that there is NO funding for a second residency. I had the info available at the time and managed to convince someone that I was worth it
😉