Resident Physician Shortage Reduction Act of 2025
The Resident Physician Shortage Reduction Act of 2025 would substantially change how Medicare reimburses and allocates internship/residency positions (the training slots for physicians) through the hospital Medicare payment system. It creates a new program to distribute an additional 2,000 residency positions each fiscal year from 2027 through 2033 (with potential expansion if more positions are available in future years). The Secretary would allocate these positions to qualifying hospitals via seven rounds (one per year 2027–2033), with specific rules intended to prioritize rural and underserved areas, hospitals with higher reference resident levels, and schools with new or expanding medical programs. Hospitals receiving these increases must agree to increase total residency positions by the same amount. The bill also broadens Medicare’s indirect medical education (IME) adjustments to apply to these added positions and requires a government study on strategies to boost workforce diversity, including a report to Congress within two years. In short, the bill is a targeted effort to expand residency training capacity by adding a large, multi-year pool of Medicare-funded residency slots and directing how they should be distributed, while also seeking to improve diversity in the health workforce.
Key Points
- 12,000 additional residency positions per fiscal year (2027–2033) to be distributed to qualifying hospitals, with annual timing and distribution mechanics defined (7 rounds, notices by January 31, effective July 1).
- 2Priority and minimum distribution rules, including at least 10% of total positions allocated to categories such as rural hospitals, sole community hospitals, rural areas by RUCA codes, HPSA-designated areas, and certain hospitals with higher reference resident levels or connections to new or expanding medical schools.
- 3Hospitals must sign an increase agreement to receive an added residency slot, ensuring they agree to increase total full-time equivalent (FTE) residency positions by the same amount.
- 4Cap on additional positions: no more than 75 FTE additional positions per hospital under this paragraph (with potential adjustments if supply exceeds demand); rules for carrying over unallocated positions to subsequent years.
- 5Special provisions to promote diversity and inclusion, including prioritization considerations for hospitals affiliated with historically Black medical schools or other schools with established medical programs, and rules ensuring no category is unfairly prioritized over others.
- 6IME (indirect medical education) adjustments expanded to apply to discharges occurring after July 1, 2027 that are attributable to these new residency positions, making the funding treatment consistent with other residencies.
- 7Administrative and definitional framework for the new positions (qualifying hospitals, reference resident level, resident level, aggregation rules among affiliated groups, and definitions of rural/isolated categories).
- 8Section 3 adds a study by the Comptroller General (GAO) on strategies to increase healthcare workforce diversity, focusing on rural, lower-income, and underrepresented minority communities, with a report and recommendations due within 2 years of enactment.