The "Rural Physician Workforce Production Act of 2025" aims to boost the number of physicians practicing in rural areas by establishing a new payment system for hospitals training medical residents in rural locations and adjusting graduate medical education funding.
Diana Harshbarger
Representative
TN-1
The "Rural Physician Workforce Production Act of 2025" aims to boost the number of physicians practicing in rural areas by establishing a new payment system to support medical resident training in those locations. This includes an "elective rural sustainability per resident payment" to hospitals training residents in rural areas and adjusts graduate medical education funding to further support rural training programs. The Act ensures that hospitals training residents in rural areas receive additional financial support, without being subject to existing program limitations, to cover the costs of training. It also includes provisions to maintain budget neutrality within Medicare's medical education spending.
Rural Physician Workforce Production Act Offers New Funding for Rural Medical Residencies, Starting 2026
The Rural Physician Workforce Production Act of 2025 is designed to get more doctors trained and practicing in rural areas. It tackles the financial challenges that often make it hard for hospitals in these communities to host residency programs.
Cash for Rural Training
The core of the bill is a new "elective rural sustainability per resident payment." Basically, it's extra money for hospitals that send medical residents to train in rural locations. This payment is meant to bridge the gap between what Medicare already provides for resident training and the actual median cost, using a 2015 baseline from a GAO report (GAO18240) and adjusting for inflation. Urban hospitals with rural training tracks get the full payment; others get 50%. These amounts will be updated annually based on the Consumer Price Index.
Real-World Rollout
Starting one year after the law is enacted, hospitals can opt in to receive this new payment. For example, a small rural hospital that couldn't previously afford to host residents might now have the financial support to do so. A resident interested in rural medicine could have more training opportunities available. Importantly, these payments won't be reduced based on how many Medicare patients a hospital sees. The bill also ensures that this new system doesn't increase Medicare's overall spending on medical education – the Secretary of Health and Human Services might have to tweak other payments to keep things balanced.
Who Benefits, and How?
Rural hospitals are the obvious winners, as they get financial help to run residency programs. Medical residents also benefit from more rural training options. Patients in rural communities should see improved access to care over time. Even urban hospitals with rural training tracks get a financial boost. To qualify, residents need to spend at least 8 weeks in a "rural training location" (defined by census data and proximity to sole community hospitals), and the hospital has to cover their salary and benefits. Programs that spend more than 50% of their time in rural locations are eligible for the payment regardless of where the training occurs or the specialty. Section 2 of the bill outlines all the eligibility and payment details.
Changes to the Resident Cap
Starting one year after enactment, any full-time resident in a program that dedicates over 50% of training time to rural locations will not be counted against the program's existing resident caps (Section 3). This applies regardless of where the training happens or the specialty. This is a significant change, potentially allowing for a substantial increase in the number of residents training in rural-focused programs.
Critical Access Hospitals
Critical access hospitals get a choice: they can be treated as a "hospital" or a "non-provider setting" when counting resident time (Section 2). This flexibility is designed to maximize their funding, but there are safeguards to prevent double-dipping. If a critical access hospital is considered a non-provider setting for another hospital that's already getting paid for those residents, the critical access hospital won't get direct medical education costs covered.