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CMS Publishes Increases in Medicare-Funded Positions via Section 126

Section 126 Awardees, within the Consolidated Appropriations Act of 2021 (HR 133), were recently published by the Centers for Medicare and Medicaid Services (CMS). You can download the Section 126 Cap Increases Round 1 results here; along with CMS’s own publication, here. HR 133’s Section 126 aims to create 1,000 new funded residency positions; whereupon 200 slots would be awarded every year for 5 years. Teaching hospitals applied for these positions, and they could not be given more than 5 funded positions per application cycle (25 in total). With the release of Section 126 applicant and awardee information, Germane hopes additional teaching hospitals are aware of the application and that this legislation will prompt additional efforts to increase Medicare-funded positions.

Of CMS’ publication of awardees and applicants, 300 hospitals applied for these funded positions, and only ~100 received any funded positions, which were in a total of 33 states. Germane anticipated around 1 funded position would be given to 200 hospitals each application cycle; however, the results from the first application cycle show an average of 2 funded positions per awarded applicant, while some applicants received as much as 4.6 funded positions. These new funded positions will become effective for the awarded hospitals on July 1st, 2023.

Section 126 is the only time since 1996 where cap, or funded position, increases were available in mass (previously, only the redistribution of funded positions, not increases, has been achieved through legislation).

If your hospital is interested in applying for the second application cycle, Section 126 applications will be due on March 31st, 2023, and become effective July 2024. Applications will be due in each subsequent March until Section 126’s 5-year period concludes. Applicants in Health Profession Shortage Areas (HPSA) are prioritized throughout the application process. To be eligible to apply for this Section 126 increase, your hospital must meet one or more of the below, summarized criteria (found here):

  • The hospital is located in a rural area as defined in the Social Security Act or is treated as being located in a rural area pursuant to the Social Security Act.

  • The hospital is currently training over its DGME and/or IME cap.

  • The hospital is located in a State with a new medical school, or with additional locations and branch campuses established by medical schools on or after January 1, 2000. Those states and territories are Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Massachusetts, Michigan, Mississippi, Missouri, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Puerto Rico, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, West Virginia, and Wisconsin.

  • The hospital is serving an area designated as a geographic health professional shortage area (HPSA), as determined by the Secretary. A hospital is qualified under this category if it participates in training residents in a program where the residents rotate for at least 50 percent of their training time to scheduled training sites physically located in a geographic HPSA.



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