HFMA – Healthcare Financial Management Association

Medicare GME Funding Reform Debate Focuses on Rural Hospitals

A congressional hearing highlighted that current Medicare GME funding formulas leave rural hospitals like Phelps Health struggling to bridge the $5‑$7 million gap between planning grants and accreditation costs. Hospital leaders argue that outdated per‑resident caps and rigid grant structures create financial risk, threatening the launch of new residency programs. Lawmakers are considering reforms, including flexible bridge funding, updated per‑resident amounts, and a bill adding 14,000 rural‑focused residency slots. These changes aim to shift training capacity from academic centers to community hospitals serving underserved areas.