The FAIR Act of 2025 mandates that Medicare-funded residency programs report data on the application and acceptance rates of osteopathic and allopathic medical school graduates to ensure equitable treatment, with non-compliance resulting in Medicare payment penalties.
Diana Harshbarger
Representative
TN-1
The Fair Access In Residency (FAIR) Act of 2025 aims to ensure equitable treatment of osteopathic (D.O.) and allopathic (M.D.) medical school graduates in residency applications. It requires hospitals receiving Medicare funds to report detailed data on D.O. and M.D. applicants and acceptances for each residency program. Hospitals failing to submit this required data will face a 2% reduction in their Medicare payments. This collected data will also be made publicly available to promote transparency in the residency recruitment process.
New FAIR Act Mandates Transparency in Medical Residency Hiring, Threatens Hospitals with 2% Medicare Cut for Non-Compliance
The Fair Access In Residency Act of 2025 (FAIR Act) is trying to bring some light into one of the most opaque parts of the medical world: residency matching. For anyone who’s ever had a doctor, this bill matters because it aims to ensure hospitals consider both osteopathic (D.O.) and allopathic (M.D.) medical graduates fairly when hiring residents. Starting October 1, 2026, hospitals that run residency programs and receive Medicare funds must start reporting detailed annual data on how many D.O. and M.D. applicants they receive and accept. If a hospital fails to send this data to the Department of Health and Human Services (HHS), they face a stiff 2% reduction in their Medicare payments for that year—a penalty that stacks up if they keep skipping the reporting.
The Data Drop: Who’s Getting Hired?
The core of the FAIR Act is transparency. Hospitals will have to publicly affirm two things: first, that their policy is to consider applicants from both types of medical schools for every program; and second, that if they require an exam score, they accept scores from either the COMLEX (the D.O. exam) or the USMLE (the M.D. exam). This means no more programs quietly requiring only the USMLE, which has historically put D.O. graduates at a disadvantage. HHS is then required to post all this applicant and acceptance data online, making it public record. For a D.O. student or a medical advocacy group, this is huge—it finally provides clear, program-by-program data to check for potential bias in the hiring process.
The Cost of Compliance (and Non-Compliance)
For hospitals, this bill creates a new administrative burden. They must track and report this data annually, which requires setting up new systems and procedures. The financial stake is high: that 2% Medicare payment reduction is significant, especially for large teaching hospitals that rely heavily on those funds. For a hospital with a billion-dollar budget, a 2% cut is a $20 million hit. This penalty is designed to ensure compliance, but it could put a real squeeze on hospitals that struggle with administrative overhead, potentially hitting smaller or rural teaching hospitals harder than large urban centers. While the bill aims to enforce fair consideration, it explicitly states it doesn’t force hospitals to accept a certain number of D.O. or M.D. students. It’s about ensuring the policy is fair and the data is public, not dictating acceptance quotas. This leaves some room for interpretation: a hospital could affirm the policy but still maintain a highly selective process, though now they’d have to do it under public scrutiny.