HR 4731119th CongressIn Committee

Resident Physician Shortage Reduction Act of 2025

Introduced: Jul 23, 2025

Sponsor: Rep. Sewell, Terri A. [D-AL-7] (D-Alabama)

EducationHealthcare

Standard Summary

Comprehensive overview in 1-2 paragraphs

The Resident Physician Shortage Reduction Act of 2025 would create a new Medicare-funded mechanism to increase the number of residency positions (physician training slots) at hospitals. For fiscal years 2026 through 2032 (and beyond if positions remain available), the Secretary of Health and Human Services would distribute additional residency slots to qualifying hospitals, increasing their number of resident positions for portions of cost reporting periods beginning after July 1 of the respective year. The total annual pool is capped at 2,000 positions, with the goal of distributing up to 14,000 positions over the 7-year window (and potentially more in subsequent years if not fully distributed by 2032). The bill also sets priority rules to favor rural, underserved, and certain historically Black medical schools-affiliated hospitals, and requires hospitals to commit to increasing their overall residency counts. In addition, it updates related Medicare payment rules (IME adjustments) for those new positions and directs a Comptroller General study on strategies to boost diversity in the health workforce. Key elements include a multi-round application process (7 rounds, one per year), a limit of 75 additional residency slots per hospital over 2026–2032, and specific distribution rules to ensure hospitals already over their resident limits, rural/PHSA-designated facilities, and certain schools receive attention. A contingency ensures distribution continues in subsequent years if not all slots are used by 2032, with a minimum distribution framework to protect rural and other priority categories. The bill also imposes an agreement requirement (hospitals must commit to increasing resident positions) and clarifies how these new slots interact with existing Medicare teaching and aggregation rules.

Key Points

1Adds a new distribution mechanism (Section 1886(h)(11)) for additional residency positions funded under Medicare, with annual rounds from 2026–2032 and a potential continuation if not fully utilized, aiming to reach up to 14,000 positions over the period (or more if needed).
2Establishes a detailed allocation process:
3- Total available positions per year: 2,000, distributed through seven rounds (one per year).
4- One-third of annual positions reserved for hospitals already operating over their resident limit.
5- A per-hospital cap of 75 additional residency positions across 2026–2032.
6- Hospitals must sign an agreement to increase the hospital’s total FTE residency positions by the number of new slots.
7Minimum and priority distribution rules:
8- At least 10% of the aggregate annual positions must go to certain categories of hospitals, including rural hospitals, sole community hospitals, rural-urban areas with high commuting codes, and other specified rural/ accreditation criteria.
9- Priority in distributing to Health Professional Shortage Area (HPSA) hospitals, especially those affiliated with historically Black medical schools or other designated medical schools.
10- Hospitals with higher reference resident level relative to their otherwise applicable limit can receive increases, subject to eligibility criteria (e.g., training in primary care and general surgery, and maintaining a minimum 25% primary care/general surgery training for 5 years).
11Administration and definitions:
12- The “reference resident level,” “resident level,” and related terms are defined to determine how increases are calculated and applied.
13- Aggregation rules allow hospitals within the same affiliated group to apply the increases collectively after year 5.
14- A special provision (paragraph 4) ensures increases are not distributed to hospitals without an increase agreement and clarifies eligibility for additional positions beyond the initial allocation.
15Medicare payments and IME:
16- For discharges after July 1, 2027, the indirect teaching adjustment factor (IME) is to be computed for the new positions in the same manner as for other residencies with respect to h(11) distributions.
17Study on diversity (Section 3):
18- Requires the Comptroller General to study strategies to increase diversity in the health professional workforce, focusing on rural, lower-income, and underrepresented minority communities.
19- A report with recommendations to Congress is due within 2 years of enactment.

Impact Areas

Primary group/area affected:- Hospitals eligible to receive the new residency slots and the medical residents rotating through those hospitals; they will see changes in resident training capacity and Medicare payments related to teaching.Secondary group/area affected:- Rural and underserved communities, as well as hospitals serving Health Professional Shortage Areas, which are targeted for priority consideration.- Historically Black medical schools and affiliated hospitals, which receive emphasis under priority rules.Additional impacts:- Potential cost implications for Medicare due to increased residency slots and associated teaching payments, including IME adjustments.- Administrative and governance requirements for hospitals to apply, accept, and report on the increases, including cost-reporting period timing and aggregation rules.- A federal study on workforce diversity that could influence future policy or legislative action beyond residency slot expansion.Residency position: a training slot for medical graduates (physicians in doctor-in-training programs, i.e., residents).Full-time equivalent (FTE): a measure used to count resident slots; 1 FTE equals one full-time resident for a year.Resident limit: the cap or baseline number of residents a hospital is allowed to train under current Medicare rules; increases under this act raise that cap for participating hospitals.Qualifying hospital: hospitals eligible to receive increased residency slots under the bill’s rules.HPSA: hospitals located in areas designated as having a shortage of health professionals.

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