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July 2, 2025

Dear Representatives Sewell and Fitzpatrick:

On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the ºÚÁÏÕýÄÜÁ¿ Association (AHA) writes to express our support for your legislation, H.R. 3890, the Resident Physician Shortage Reduction Act of 2025. Your bipartisan bill would add 14,000 Medicare-funded residency positions over seven years, thereby helping to alleviate ongoing physician shortages that threaten patients’ access to care.

Congress established graduate medical education (GME) funding to ensure an adequate supply of well-trained physicians. However, the current cap on residency slots, established in the Balanced Budget Act of 1997, restricts the number of residency slots for which hospitals may receive direct GME funding. A cap also limits the number of residents that hospitals may include in their ratios of residents-to-beds, which affects indirect medical education (IME) payments.

The bill would direct the Centers for Medicare & Medicaid Services (CMS) to increase the number of slots by 2,000 annually from 2026 through 2032. If CMS determines that there are remaining slots available after 2032, it must conduct additional distribution rounds until all 14,000 slots have been distributed. While an individual hospital may not receive more than 75 of these newly available slots, the bill would authorize CMS to increase this hospital-specific limitation if more slots are available than eligible applications.

The bill allots one-third of the slots each year to teaching hospitals that train at least 10 residents above their applicable caps and train at least 25% of their residents in primary care and general surgery. A hospital receiving slots under this mechanism would be required to continue to train at least 25% of its residents in primary care and general surgery for a five-year period. The slots would be distributed based on each hospital’s proportionate share of residents training above its cap compared to the total number of residents training above all hospital caps. An individual hospital’s receipt of slots under this first mechanism would not affect its ability to apply for slots from the remaining pool of slots.

Two-thirds of the slots each year would be available for teaching hospitals through a second mechanism. For this pool of slots, CMS must consider the likelihood of a teaching hospital filling the positions within the first five cost-reporting periods beginning after the effective date of the direct GME and/or IME cap increase. For this pool of slots, the legislation does not allow any new reimbursable Medicare slots to be used for residents currently in training above hospitals’ applicable caps.

For the second mechanism, CMS must provide a minimum of 10% of the awarded slots to each of the following four priority categories:

• Hospitals located in a rural area, an area with a rural-urban commuter code of 4.0 or greater, a sole community hospital or hospital located within 10 miles of a sole community hospital, or a hospital that has a rural training track as of 2031.
• Hospitals training residents above their direct GME and IME caps, taking into account cap increases and reductions previously made to hospitals through slot redistribution programs.
• Hospitals located in states with new medical schools or locations/branch campuses as of Jan. 1, 2000.
• Hospitals that serve areas designated as federal health professional shortage areas, with priority given to hospitals affiliated with historically Black medical schools or a professional or graduate institution listed in the Higher Education Act as promoting opportunities for Black Americans.

New slots would be reimbursed at a hospital’s otherwise applicable per-resident amount for GME purposes and using the usual adjustment factor for IME reimbursement purposes.

Recognizing the urgent need for physicians in rural areas of the nation, the bill would authorize $63.5 million in grant funding for geographically rural hospitals seeking to start residency programs. Rural hospitals would be eligible to apply for grants that support the costs of starting a residency program, recruiting and retaining qualified faculty, attracting residents, and supporting the additional costs of curriculum development and training.

Additionally, the bill would require the Comptroller General to study and report to Congress on strategies to increase the diversity of the health professional workforce.

The AHA is firmly committed to ensuring hospitals’ staff and governance reflect the communities that they serve, and your bill would support our efforts. We are grateful for your strong leadership in introducing this crucial legislation. The AHA stands ready to work with you to ensure its enactment.

Sincerely,

/s/

Lisa Kidder Hrobsky
Senior Vice President, Advocacy and Political Affairs