A federal bill introduced June 10 aims to increase the number of Medicare-supported medical residency positions by 14,000 over seven years.
Five things to know:
1. The Association of American Medical Colleges endorsed the proposed legislation, the Resident Physician Shortage Reduction Act of 2025, which seeks to bolster the U.S. physician workforce. By 2036, the country is projected to have a shortage of up to 86,000 physicians due to a growing population with increased healthcare needs and a higher number of physician retirements, according to the AAMC.
2. CMS sets the number of eligible Medicare-funded residents for hospitals. To control federal spending on Graduate Medical Education, a 1997 law established caps on the number of Medicare-supported positions based on the number of residents training at teaching hospitals in 1996. In 2021, Congress authorized funding for 1,000 new Medicare-supported residency slots over five years — the first such expansion since 1996. An additional 200 slots were included in a 2023 law.
3. National healthcare organizations have cited the cap on GME funding as a contributor to the physician shortage. Despite growing enrollment in medical schools, thousands of eligible applicants do not match into a residency program. Since Medicare will only fund up to the cap, hospitals must cover the cost of training any additional residents.
4. If the Resident Physician Shortage Reduction Act of 2025 is passed into law, CMS would incrementally increase the applicable resident limit by 14,000 for eligible hospitals between 2026 and 2032.
5. Certain hospitals would receive priority for these additional residency positions, including rural hospitals, those with a reference resident level higher than the applicable limit, hospitals in states with new medical schools established since 2000, hospitals serving designated health professional shortage areas, and hospitals affiliated with medical colleges.
