CMS Finalizes Rule to Provide 1,000 Additional Residency Slots Beginning in 2023; Highlights Addiction Psychiatry and Addiction Medicine

In December 2020, the President signed the Consolidated Appropriations Act (CAA), 2021, which made fiscal year (FY) 2021 appropriations for the federal government and added 1,000 additional Medicare-supported residency slots starting in FY 2023. Under the new law, the Secretary of Health and Human Services (HHS) may allot up to 200 of the 1,000 additional slots per fiscal year. The HHS Secretary is required to establish a separate application process for these additional slots and must notify hospitals of the aggregate number of residency slots (which includes any additional slots) by January 31st of each fiscal year. Any increases in the number of residencies will be effective July 1st of the fiscal year that hospitals are notified of any increase.

Additionally, the CAA of 2021 requires the HHS Secretary to account for certain factors when considering where to allot these additional residency slots.  For example, at least 10% of the 1,000 additional slots must be made available to each of the following, four categories of hospitals: (1) rural hospitals, (2) hospitals in which the reference resident level of the hospital is greater than the otherwise applicable resident limit, (3) hospitals in states with new medical schools and those than have established new campuses since 2000 under certain conditions, and (4) hospitals that serve areas designated as health professional shortage areas (HPSA) as defined by the Health Resources and Services Administration (HRSA). A hospital may not receive more than 25 additional full-time equivalent residency positions under the 2021 CAA.

In April 2021, CMS issued a proposed rule to implement sections of the CAA, including the additional residency slots. Under this rule, CMS proposed to limit applications from hospitals serving mental health-only shortage areas for purposes of category four eligibility and HPSA prioritization to psychiatry residency programs. ASAM opposed this proposal in its June 2021 comment letter on the proposed rule, noting the importance of primary care physicians in treating addiction. In its final rule, CMS agreed with ASAM and revised its initial proposal. The final rule notes that “… we are allowing only programs for Psychiatry and subspecialties of Psychiatry to use the score from a mental health only HPSA. We note that the subspecialties of Psychiatry include addiction psychiatry and multispecialty addiction medicine.” As a result, applications from hospitals serving mental health-only shortage areas can include addiction psychiatry and addiction medicine programs for the aforementioned purposes.