IPPS Final Rule FY 2025 – Summary
CMS published its final rule for IPPS for Fiscal Year 2025. You can find the final rule in its entirety here » Changes in the final rule as they pertain to GME are:
- Distribution of Additional Residency Positions
- Update on Proposed Modifications to Criteria for New Residency Programs
Distribution of Additional Residency Positions Under Section 4122 of the Consolidated Appropriations Act of 2024 (CAA), 2023
Under Section 4122 of the CAA of 2024, Congress authorized 200 additional residency slots to be distributed for 2026 based on specific criteria. Of the 200 available slots, 100 are required to be distributed for psychiatry or psychiatry subspecialty residency training programs.
Each qualifying hospital that submits a timely application will receive up to 1.0 FTE (meaning some may be awarded a portion of 1 FTE) of the residency positions made available before any hospital receives more than 1 residency position. After 1.0 FTE are awarded to each applying hospital, the remaining slots will be distributed based on the HPSA score associated with the program for which each hospital is applying.
The application deadline is March 31, 2025. Hospitals will be notified of the number of positions distributed to them by January 31, 2026. The increase will be effective beginning July 1, 2026.
Proposed Modifications to Criteria for New Residency Programs
Defining a “new” program is becoming more important because of urban hospital’s ability to be reclassified as rural for IME purposes, thereby receiving additional IME cap slots for new programs started. To ensure that new cap slots are funded appropriately, there is a need to establish criteria to determine newness.
CMS proposed modifications to the criteria for New Residency Programs (outlined in Proposed Rule FY 2025) and comments were solicited to determine if a consensus could be reached for how to define the newness of a program. The proposed policy was, to be considered a new program, the “overwhelming majority” of the residents (i.e. 90%) must be new. With regards to program director and teaching staff, the rule should likely be less than 90% new staff, but the threshold right now is uncertain. CMS hoped to gain some consensus through the comments made after the proposed rule.
Many responded with comments, but a consensus was not achieved. As a result, the proposed policy will not be finalized. Instead, CMS will be another RFI period seeking comment to attempt to achieve a greater consensus on the issue.