The bill adds a new program to Medicare (Social Security Act, title XVIII) to give hospitals extra funded residency positions. For fiscal years 2026 through 2032 the Secretary of Health and Human Services will run one application round each year to distribute up to 2,000 new resident full-time equivalent (FTE) positions per year. One-third of the yearly positions are reserved for hospitals already training more residents than their current Medicare limit. If positions are not distributed in a year, they carry forward to the next year. The goal across the 7-year period is to distribute a total of 14,000 positions; if fewer than 14,000 are distributed by the end of 2032, the Secretary must continue the process in later years until 14,000 have been distributed.
The bill sets eligibility and priority rules. Hospitals must apply and meet program rules. Reserved and prioritized categories include rural hospitals and certain sole community hospitals, hospitals near sole community hospitals, hospitals serving Health Professional Shortage Areas, hospitals with reference resident levels above their Medicare limit, and hospitals affiliated with new or expanding accredited medical schools. Hospitals that already operate over their resident limit must meet conditions (for example, a minimum 10-resident excess and training at least 25% of residents in primary care and general surgery) to share in the one-third reserved set-aside. A hospital may not receive more than 75 additional FTE positions in total under this and two related Medicare provisions during 2026–2032, unless the Secretary raises that cap.
The bill also includes technical rules: per-resident payment amounts for these new positions are set equal to each hospital's existing per-resident amounts for primary and nonprimary care; hospitals may aggregate some of these positions among affiliated group members beginning in the fifth year after the increase; the Secretary will notify hospitals by January 1 of the fiscal year when positions will be effective July 1. The bill amends Medicare's indirect medical education (IME) rules so that, for discharges on or after July 1, 2027, the IME adjustment includes the indirect teaching impact of positions added under this new paragraph.
Finally, the bill directs the Government Accountability Office (Comptroller General) to study strategies to increase diversity in the health professional workforce. The GAO must report to Congress within two years with findings and any recommended legislation or administrative actions.
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