S. 2954 — Health Care Workforce Expansion Act of 2025

This section establishes the MED Grants program as a new subpart under Part A of title IV of the Higher Education Act of 1965 (20 U.S.C. 1070), which sets forth the purposes of federal student aid programs including Pell Grants and supplemental opportunity grants. The program authorizes the Secretary of Education to make payments to eligible institutions (i.e., schools of medicine or osteopathic medicine) to cover tuition and required fees for medical school candidates (i.e., students pursuing a doctor of medicine or doctor of osteopathic medicine degree) for the period required to complete the degree, not to exceed eight years or the cost of attendance when combined with other federal assistance. To qualify, candidates must submit an application demonstrating eligibility under section 484, complete a FAFSA, and agree to practice primary care (as defined in section 1886 of the Social Security Act) as a physician for at least 10 years within 15 years after completing the degree and related training (the "service obligation window"), with annual employment certifications required; failure to comply converts the grant to a Federal Direct Unsubsidized Stafford Loan. Payments to institutions are advanced (not less than 85% prepayment prior to each payment period), or directly to students if the institution opts out.

This section amends the Teaching Health Center Graduate Medical Education (THCGME) Payment Program—under which the Department of Health and Human Services (HHS) Secretary makes payments to qualified teaching health centers for direct and indirect expenses associated with maintaining, expanding, or establishing approved graduate medical residency training programs, with priority for those serving health professional shortage areas, medically underserved communities, or rural areas—by (1) establishing a minimum direct expense per resident amount of $170,000 for FY2026, increasing by $10,000 for FY2027 and each fiscal year thereafter; and (2) appropriating funds as follows: $892,500,000 for FY2026; $1,890,000,000 for FY2027; $2,992,500,000 for FY2028; $3,150,000,000 for FY2029; $3,307,500,000 for FY2030; $3,465,000,000 for FY2031; $3,622,500,000 for FY2032; $3,780,000,000 for FY2033; $3,937,500,000 for FY2034; and $4,095,000,000 for FY2035. (Thus, total payments are capped annually by these appropriations, with the Secretary limiting full-time equivalent resident slots accordingly.)

This section establishes distribution of 50,220 additional full-time equivalent Medicare graduate medical education (GME) residency positions under the hospital resident cap (i.e., otherwise applicable resident limit), with an annual limit of 5,022 positions for each of fiscal years 2027 through 2036 (and subsequent years until all are distributed). (1) Of the positions available each year, at least 15% must be for psychiatry or psychiatry subspecialty residencies and at least 30% for primary care residencies; (2) the Secretary of Health and Human Services distributes positions to qualifying hospitals based on their demonstrated likelihood of filling them within five years, subject to applications, agreements to expand existing programs (not new ones), and use of nonprimary care per-resident payment amounts; and (3) after five years, hospitals may aggregate these positions with affiliated group limits. (As background, Medicare's direct GME payments and indirect medical education adjustments to hospital inpatient prospective payments are limited by each teaching hospital's resident cap, generally based on 1996 training levels; this provision raises those caps to expand training capacity.) The section also includes these positions in indirect medical education adjustment calculations for discharges occurring on or after July 1, 2027, and updates statutory cross-references accordingly.

This section establishes a rural relocation grant program in the Public Health Service Act, directing the Secretary of Health and Human Services to award grants of up to $20,000 to licensed physicians, nurses, and dentists who relocate from non-rural areas to rural areas where they secure a permanent position and intend to practice for at least three years. Grants may be used for relocation and living expenses, as determined by the Secretary, with recipients required to repay 50% of the grant amount if they leave the rural area before completing the three-year service obligation. The program authorizes appropriations of $1.8 billion for FY2026 through 2035.