The Centers for Medicare & Medicaid Services (CMS) has finalized rulemaking designed to enhance the health care workforce and fund additional medical residency positions in hospitals serving rural and underserved communities. The CY 2022 Inpatient Prospective Payment System (IPPS) final rule creates 1,000 new Medicare-funded physician residency slots for qualifying hospitals, phasing in 200 slots per year over five years.

In implementing funding provisions of the Consolidated Appropriations Act (CAA), 2021, CMS is acting to promote the training and retention of physicians in underserved communities that have historically experienced workforce challenges. CMS estimates that the additional funding will total approximately $1.8 billion from FY 2023 through FY 2031. CMS will be prioritizing applications from qualifying hospitals that serve geographic areas and underserved populations with the greatest need.

The IPPS final rule also implements section 127 of the CAA, Promoting Rural Hospital GME Funding Opportunity, which allows rural teaching hospitals participating in an accredited rural training track (RTT) to receive increases to their FTE caps.

Finally, the CAA corrects the situation where hospitals had inadvertently limited their ability to receive Medicare funding for residents in a new training program by accepting residents that rotated to the hospital from other training programs. The final IPPS rule restores that ability to receive additional residency positions to qualifying hospitals, which often serve underserved communities.