The FAIR Act of 2025 would require hospitals with approved residency programs to report information to the Secretary of Health and Human Services about applicants from osteopathic and allopathic medical schools, beginning in fiscal year 2025. It amends title XVIII of the Social Security Act to add a data-collection requirement and an accompanying public disclosure.
The bill ties Medicare payments to compliance by instituting a 2 percent reduction in payments for each prior fiscal year a hospital did not submit the required information. Importantly, the act clarifies that this is a reporting and transparency mechanism, not a mandate to federalize medical education or to dictate how many students a program must accept.
It also requires hospitals to affirm that they consider applicants from both school types and to accept either COMLEX or USMLE scores if scores are used. Public publication of the data would be on a CMS website for each fiscal year, starting with FY2025.
At a Glance
What It Does
Adds a new data-reporting requirement to Section 1886(d)(5)(B)(xiv) and a related payment-reduction mechanism for noncompliance. It also mandates public publication of the reported data and a policy affirmation on accepting applicants from both osteopathic and allopathic schools, including alternate exam-score options.
Who It Affects
Hospitals with approved residency programs under Medicare, and the CMS/Secretary of Health and Human Services who will collect and publish the data for each fiscal year.
Why It Matters
This creates transparency around residency admissions by school type, potentially shaping equity in opportunity and informing policymakers and applicants about program practices; it also links data submission to Medicare payments, creating a financial incentive for compliance.
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What This Bill Actually Does
The FAIR Act of 2025 targets hospitals that run approved medical residency programs. It requires these hospitals to report, for each residency program, how many applicants come from osteopathic schools and how many come from allopathic schools, along with how many of those applicants are accepted.
Hospitals must also affirm that they intend to consider applicants from both school types, and, if exam scores are used as a prerequisite, that they accept scores from either the COMLEX or the USMLE. Starting in FY2025, the Department of Health and Human Services must publish the reported numbers publicly on a CMS website.
The measure does not federalize medical education or require hospitals to admit a certain number of students; it simply imposes reporting and transparency obligations and ties compliance to Medicare payments. If a hospital fails to submit the required information, its Medicare payment amount can be reduced by 2 percent for each relevant prior fiscal year.
The goal is to promote equitable access to residency opportunities while preserving hospital autonomy in admissions decisions.
The Five Things You Need to Know
The bill creates a new information-collection requirement for hospitals with approved residency programs, focused on osteopathic vs allopathic applicant flows and acceptances.
The payment framework under Medicare is updated to reduce the hospital’s payment by 2% for each prior fiscal year the hospital did not submit the required data.
Hospitals must affirm a policy of considering applicants from both osteopathic and allopathic schools and may need to accept either COMLEX or USMLE scores if scores are required.
Data submitted under the bill will be published on a public CMS-hosted website for each fiscal year starting in FY2025.
The bill includes a construction clause clarifying that it does not federalize medical education or require hospitals to admit a specific number of students.
Section-by-Section Breakdown
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New data points for residency programs
The bill adds a new subclause to the existing Medicare payout formula to require hospitals to report, for each fiscal year, the number of residency applicants from osteopathic and allopathic schools, as well as the number accepted into each program. It also requires an affirmation that the hospital’s admissions policy intends to consider applicants from both school types and, if exam scores are used, that scores from either the COMLEX or USMLE are accepted. This establishes the granular data points CMS will collect and publish.
Payment reduction for noncompliance
For discharges occurring on or after October 1, 2026, the bill adds a mechanism by which the amount determined under the prior calculation can be reduced by 2 percent for each fiscal year in which the hospital has not submitted the information described in subclause (xiv). This creates a direct financial incentive for hospitals to provide the required data in a timely manner.
Public disclosure of hospital data
The Secretary shall publish on a public CMS website the data described in subclauses (I) and (II) of the new subsection and the affirmation described in subclause (III) for each hospital with an approved residency program, for every fiscal year beginning in FY2025. The publication is intended to be transparent and accessible to the public, researchers, and policymakers.
Clarification of scope
The act includes a clear rule that nothing in the measure federalizes medical education nor mandates that an approved residency program accept students from osteopathic or allopathic schools or in a specified proportion. It preserves hospital discretion over admissions decisions while imposing data-collection and reporting requirements and a publication obligation.
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Explore Healthcare in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Osteopathic medical school graduates seeking residency placements, who may gain visibility into program practices and openness toward osteopathic applicants.
- Allopathic medical school graduates seeking residencies, who may benefit from transparent reporting about program acceptance of their credentials.
- Hospitals with approved residency programs, which can demonstrate a commitment to equity and data-driven admissions practices.
- Residency program directors and admissions committees, who will operate within a defined reporting framework and may leverage the data to benchmark practices.
- CMS and HHS programs, which will gain visibility into residency program dynamics and can monitor compliance with Medicare reporting obligations.
Who Bears the Cost
- Hospitals that fail to submit required data will see Medicare payments reduced, imposing a direct financial penalty.
- Hospitals must invest in data collection, reporting infrastructure, and governance processes to ensure accuracy and timely submission.
- Compliance and IT staff at hospitals will face increased administrative burdens to collect, verify, and report the required data.
- CMS/HHS staff will incur additional workload to publish and maintain the public data site and monitor ongoing submissions.
Key Issues
The Core Tension
The central dilemma is whether tying Medicare payment adjustments to transparency about osteopathic vs allopathic residency applicant data will meaningfully enhance equity without unintentionally constraining program flexibility or prompting adverse behaviors in admissions, given the potential for data misinterpretation and the financial leverage used to compel reporting.
The bill explicitly states that the new reporting and publication requirements are policy tools to promote transparency and equity, not a mandate to standardize or regulate medical education. Implementing the data collection will require hospitals to align admissions workflows and data systems with the reporting criteria.
A key concern is how the data will be interpreted and used, including potential misreadings of applicant pools or program prestige influencing outcomes. There is also the risk that the requirement could deter applicants from underrepresented groups if not carefully managed and contextualized.
Finally, the public-facing data publication raises considerations about privacy, data accuracy, and the need for ongoing verification to ensure that reported figures accurately reflect each program’s applicant and acceptance activity.
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