Updates on Section 126 Distribution of Additional GME Positions

Section 126 Distribution of Additional GME Positions

CMS recently opened the application window for additional GME positions under Section 126 of the Consolidated Appropriations Act, 2021. Since Medicare resident FTE caps were established, there have been few opportunities to expand funded positions. However, the addition of Medicare-funded resident FTE positions is needed due to the projected physician shortage in the U.S. The CAA 2021 is also intentional in addressing the health inequities for underserved populations. We recommend healthcare organizations incorporate into their overall strategy the ability to take advantage of these provisions.

On December 27, 2020, Congress passed the Consolidated Appropriations Act, 2021 (HR 133). The CAA 2021 is the most significant legislation with changes to Graduate Medical Education (GME) for teaching hospitals in the last 25 years. There are three sections with specific provisions:

  • Section 126: Distribution of additional residency positions
  • Section 127: Promoting Rural Hospital GME Funding Opportunity
  • Section 131: Medicare GME treatment of hospitals establishing new medical residency training programs after hosting medical resident rotators for short durations
Section 126 of the Consolidated Appropriations Act (CAA), 2021

The CAA, 2021 makes available 1,000 additional Medicare-funded GME positions (but not more than 200 new positions per fiscal year). There are separate rounds of applications from hospitals for the additional positions with an annual January 31 deadline. Hospitals receiving an FTE cap increase must start training residents within the first five years beginning after the effective date of the increase.

The Secretary is required to distribute at least 10% of the aggregate total resident positions to each of the four categories listed below for a total of 40%.

  1. Hospitals located in rural areas or that are treated as being located in a rural area (pursuant to sections 1886(d)(2)(D) and 1886(d)(8)(E) of the Social Security Act)
  2. Hospitals operating over their resident FTE cap
  3. Hospitals in states with new medical schools or additional locations and branches of existing medical schools
  4. Hospitals that serve areas designated as Health Professional Shortage Areas (HPSAs)

We anticipate additional legislative proposals to be presented in Congress that propose additional Medicare-funded GME residency positions beyond the 1,000 included in Section 126 of the CAA discussed above. Congress continues to consider extending additional positions to head off a looming physician shortage. Providers can follow the progress of these provisions by their respective names:

  • The Resident Physician Shortage Act of 2021 (S 834/HR 2256) proposes 14,000 additional Medicare-funded GME positions
  • Build Back Better Act Section 137405–Distribution of Additional Residency Positions (HR 5376) proposes 4,000 additional Medicare-funded GME positions

Our goal at DHG Healthcare is to be your guide along every step of your organization’s unique journey toward risk capability. Visit our site to learn more about our services.

If your hospital is eligible for additional positions under the Section 126 provision and would like assistance as you navigate the application process, please contact DHG. We are available to provide step-by-step guidance during the application process and reimbursement assistance upon receipt of the awarded positions.


Horace Jenkins
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