On December 27, 2021, CMS finalized several Medicare graduate medical education (GME) policies, implementing changes required by the Consolidated Appropriations Act of 2021 (CAA). Importantly, the rule establishes the process CMS will use to award 1,000 new resident slots to hospitals. Beginning in fiscal year 2023, CMS will award 200 new resident slots per year for five years. Hospitals must fall within one of four categories to apply for the new slots: (1) qualify as rural (whether located in a rural area or designated as rural); (2) train at a level in excess of their existing resident cap; (3) be located in one of 35 identified states (or Puerto Rico) that have new medical schools or branches; and/or (4) serve designated geographic health professional shortage areas (HPSAs). CMS had proposed to limit applicants to 1 new slot per year (for a total of 5 potential slots), but the final rule allows hospitals to request up to 5 slots per year, with the maximum tied to the length of the program that new slots will be used to support. (A hospital expanding or creating a 3-year program may request up to 3 slots, and so forth.) Priority will be given to applicants on the basis of their population HPSA score, ensuring that new slots are targeted to providers serving underserved populations in alignment with President Biden’s Executive Order on “Advancing Racial Equity and Support for Underserved Communities Through the Federal Government.” Applications for the first round of awards will be due March 31, 2022.

The final rule also implements provisions in the CAA that improve funding for rural training and allow certain categories of hospitals with de minimis resident caps and per resident amounts (PRAs) a one-time opportunity to reset their limits. CMS has published data that it believes will help identify hospitals eligible for a cap and/or PRA reset; hospitals not included within the data set still may request a reset, but will require Medicare Administrative Contractor (MAC) review. Hospitals seeking to reset their cap and PRA in accordance with the new rules must submit a request to their MAC by July 1, 2022.