The Centers for Medicare & Medicaid Services (CMS) updated the Direct Graduate Medical Education (DGME) website since the publication of the fiscal year (FY) 2025 Inpatient Prospective Payment System (IPPS) Final Rule to reflect a new interpretation of Section 126 of the Consolidated Appropriations Act, 2021, award distribution data. By statute, the CMS is required to award at least 10% of the 1,000 new Medicare-funded positions made available under Section 126 to each of four categories of qualifying hospital: rural hospitals, hospitals over their Medicare full-time equivalent (FTE) cap, hospitals in states with new medical schools or branch campuses, and hospitals that serve geographic Health Professional Shortage Areas (HPSAs, in this context, also referred to as Category 4 hospitals).
In the FY 2025 IPPS Final Rule, the CMS announced that after evaluation of the award data from Rounds 1 and 2, the agency would likely not meet the 10% distribution requirement for hospitals that serve Category 4 hospitals. To ensure that Category 4 hospitals met the 10% statutory distribution requirement, the CMS modified the Section 126 distribution program for Rounds 4 and 5 to give first priority to those hospitals, and if slots remained, to use the same HPSA prioritization used in Rounds 1 through 3.
After publishing the final rule, the CMS reevaluated the number of FTEs distributed and determined that the 10% requirement for Category 4 hospitals had been met, thus not necessitating first priority. Instead, the CMS will use the same HPSA prioritization methodology used in Rounds 1 through 3 for Rounds 4 and 5.
- Washington Highlights