FAIR Act of 2025
- Sponsor
- Sen. Daines, Steve [R-MT]
- Committees
- Finance Committee (primary)
- Last action
- Sep 4, 2025
Bottom line
The FAIR Act aims to increase transparency and promote equitable consideration of osteopathic and allopathic medical school graduates in residency programs by requiring data submission and imposing financial penalties for non-compliance.
What it actually does
This bill, the FAIR Act of 2025, requires hospitals with medical residency programs to submit annual data to the Secretary of Health and Human Services regarding applicants and accepted candidates from osteopathic and allopathic medical schools. It also mandates an affirmation of fair consideration and acceptance of either COMLEX-USA or USMLE scores. Hospitals failing to comply face a 2% reduction in Medicare payments for each year of non-compliance, starting October 1, 2026. The collected information will be publicly published by HHS.
Proponents argue
Proponents argue that this bill addresses potential biases in residency admissions by shedding light on the application and acceptance rates of osteopathic and allopathic candidates. They believe increased transparency will encourage fair treatment, ensure a diverse physician workforce, and help address physician shortages by ensuring qualified osteopathic graduates have equitable access to training opportunities. The financial penalty provides a strong incentive for compliance.
Opponents contend
Opponents might argue that this bill imposes an unnecessary administrative burden on hospitals and residency programs, diverting resources from patient care and education. They may contend that residency programs already employ fair and merit-based selection processes and that federal intervention through data collection and financial penalties is an overreach into medical education autonomy. Some might also express concern about potential unintended consequences of publicizing specific program data.
The bill is very short and straightforward, allowing for a quick and comprehensive understanding of its provisions.
Section 2(a)(1)
Medicare Payment Reduction for Failure to Submit Residency Data
This provision amends the Social Security Act to reduce Medicare payments to hospitals with medical residency programs. Starting October 1, 2026, a hospital's Medicare payment will be cut by 2% for each fiscal year (beginning with FY2025) that it fails to submit the required information about its residency applicants and accepted candidates. This creates a financial incentive for hospitals to comply with the new reporting requirements.
Supporters argue
Supporters argue that a financial penalty is necessary to ensure compliance with the data submission requirements, making the transparency goals of the bill effective. Without a clear consequence, hospitals might not prioritize reporting.
Critics contend
Critics might contend that financial penalties, especially those impacting Medicare payments, could disproportionately affect hospitals with fewer administrative resources or those in underserved areas, potentially harming patient care or the financial stability of crucial training institutions.
Tradeoffs
The tension lies between ensuring compliance through financial incentives and potentially burdening hospitals, especially those already facing financial constraints, with administrative requirements and penalties.
Section 2(a)(2)
Mandated Reporting of Osteopathic and Allopathic Residency Data
This section requires hospitals to submit annual data for each of their medical residency programs. The data includes the number of applicants from osteopathic and allopathic medical schools, and the number of accepted candidates from each type of school. It also requires an affirmation that the hospital considers both types of applicants and accepts either the Comprehensive Osteopathic Medical Licensing Examination of the United States (COMLEX-USA) or the United States Medical Licensing Examination (USMLE) scores for examination prerequisites.
Section 2(b)
Public Disclosure of Residency Application and Acceptance Data
This provision mandates that the Secretary of Health and Human Services publish the collected data (applicant numbers, acceptance numbers, and the hospital's affirmation) on a public website. This information will be available for each fiscal year, starting with FY2025, allowing public access to the reported statistics.
Section 2(c)
Clarification on Federal Role in Medical Education
This clause explicitly states that the Act should not be interpreted as federalizing medical education or as mandating that residency programs accept a specific number of students from either osteopathic or allopathic medical schools. It aims to clarify that the bill's intent is transparency and fair consideration, not direct control over admissions outcomes.
Clarifies that the Act does not federalize medical education or mandate specific acceptance numbers for osteopathic or allopathic students in residency programs.
Section 2(c)
Why it matters:Standard legislative practice to limit the scope and interpretation of a bill, often to address potential concerns about overreach or to secure broader support.
Case for: Supporters argue it provides crucial reassurance to medical institutions that the bill respects their autonomy in educational decisions, focusing instead on transparency and fair process.
Case against: Critics might argue that such a clause is merely symbolic, as the financial penalties and public reporting could still exert indirect pressure on programs to alter their admissions practices, regardless of the stated intent.
Estimated impact: Limits the legal interpretation of the bill, potentially reducing legal challenges based on federal overreach into medical education.
Specifies that the 2% Medicare payment reduction for non-compliance begins for discharges occurring on or after October 1, 2026, based on reporting failures from fiscal year 2025 onwards.
Section 2(a)(1)
Why it matters:Standard legislative practice for specifying effective dates and applicability periods for new requirements.
Case for: Proponents would argue that this phased implementation provides hospitals with sufficient time to establish reporting mechanisms for FY2025 data before any financial penalties are applied in FY2027 (for FY2025 non-compliance).
Case against: Opponents might argue that even with a delayed penalty, the requirement to collect data for FY2025, which is already underway or recently concluded, could still be an immediate administrative challenge for hospitals.
Estimated impact: Determines the timeline for when hospitals must be compliant to avoid financial penalties, effectively giving them a grace period for initial reporting.