Teaching hospitals training over their graduate medical education (GME) caps have limited opportunities to receive additional funding from Medicare. Therefore, it is important to note the upcoming March 31, 2026, deadline to apply for the last round of Medicare-funded residency positions authorized by Section 126 of the Consolidated Appropriations Act, 2021.
Hospitals planning residency programs where at least 50 percent of the training would occur at a site physically located in a primary care or mental health geographic Health Professional Shortage Area (HPSA) are better positioned to apply for the final round (round five) of Section 126 Medicare-funded GME residency positions, based on Centers for Medicare and Medicaid Services' (CMS) modifications to the distribution methodology first implemented in the previous round (round four).
Our previous article on "Noteworthy GME Payment Policies and Opportunities for Residency Slots in CMS's FY 2025 IPPS Final Rule" includes a more detailed description and eligibility information related to this distribution methodology.
Below are links to CMS frequently asked questions and application information regarding this funding opportunity and awards from the last round. In the last round, awards were given to nearly half of the hospitals (95 out of 211) applying.
This distribution requires hospitals that apply to have a "demonstrated likelihood" that any awarded slots will be used for a new residency program or an expansion of an existing program, so residency program planning needs to be considered ahead of the application deadline.
