Skip to main content

Medicare Funds GME Residency Slots to Aid Physician Shortage

In January 2023, CMS announced recipients of GME slots under Section 126 of CAA, 2021. In July 2023, 200 slots will be available. Read on about FTE cap slots.
banner background

Section 126 – Round 1 Analysis & Round 2 Considerations

In January 2023, CMS announced recipients of the first round of the Graduate Medical Education (GME) slots under Section 126 of the Consolidated Appropriations Act (CAA), 2021.1  Section 126 created an additional 1,000 GME full-time equivalent (FTE), Medicare-funded cap slots over the next 5 years with 200 available for the academic year beginning July 1, 2023. So, over the next four years, CMS will award an additional 200 FTE cap slots per year to qualifying hospitals. The hospitals that receive the additional cap slots will gain Medicare funding for training more residents and fellows.

In this article, we highlight the Round 1 results and provide considerations for hospitals as they prepare for the Round 2 application deadline on March 31, 2023.

Round 1 Overview

  • The distribution priority for eligible hospitals was based on the health professional shortage area (HPSA) score, which ranges from 0—25. The average HPSA score for awarded hospitals was 16 with a high of 22 and a low of 11. There were 291 applicant hospitals of which 100 were awarded slots, with more than half receiving two or more FTE cap slots.
  • Of the applicant hospitals, 99% were short-term or children’s hospitals; 44% of children’s hospital applicants and 34% of short-term hospital applicants received FTE cap slots.
  • While 32 of 38 applicant states were awarded slots, only five hospitals that received FTE cap slots were located in rural areas. 
  • Family and internal medicine accounted for approximately 50% of both direct and indirect graduate medical education (DGME and IME) full-time equivalents.
  • Primary care programs received the majority of awarded FTE cap slots (IME: 130.11 and DGME: 132.87, respectively).
  • The top five states that were awarded FTE cap slots included New York, Florida, Georgia, Illinois, and Arizona.
Cities and States awarded FTE slots

The Section 126 provision is a priority of CMS to address the projected physician shortage by incentivizing hospitals to train more residents, close healthcare equity gaps, and enhance the healthcare workforce in rural and underserved communities. Addressing the physician shortage is one of the first steps in creating a more equitable, caring, and sustainable healthcare industry.

Round 2 Considerations

As hospitals prepare for their Round 2 application submission due on March 31, 2023, FORVIS recommends the following:

  • Develop a strategy that aligns with organizational GME needs.
  • Analyze HPSA scores applicable to residency and fellowship programs.
  • Compile information to support application attestations.
  • Only include application requests for programs that will begin training additional residents/fellows on or after July 1, 2023.

To access the full list of the Round 1 awarded resident FTE cap slots, effective July 1, 2023, visit

Interested to learn if your organization qualifies for additional FTE cap slots or needs assistance developing a GME strategy? The Healthcare Practice at FORVIS can help. Reach out to us at or submit the Contact Us form below to learn more.

Related FORsights

Like what you see?
Subscribe to receive tailored insights directly to your inbox.