Highlights
- The Trump Administration recently released a presidential proclamation that imposes a $100,000 supplemental fee on new H-1B petitions and restricts H-1B admission into the U.S. unless the fee is paid, substantially raising the marginal cost of hiring international medical graduates/physicians (IMGs).
- Healthcare employers, especially in rural and medically underserved areas, rely heavily on IMGs to fill primary care and specialty shortages, and the fee could make routine hiring of IMGs financially unworkable for many healthcare employers.
- This Holland & Knight alert examines how the fee could potentially price many healthcare employers out of the IMG labor market and hinder IMG recruitment, among other possibilities.
The Trump Administration on Sept. 19, 2025, released a presidential proclamation that imposes a $100,000 supplemental fee on new H-1B petitions (and restricts H-1B admission into the U.S. unless the fee is paid) and will substantially raise the marginal cost of hiring international medical graduates/physicians (IMGs). That cost could potentially 1) price many healthcare employers out of the IMG labor market, 2) slow recruitment of IMGs who disproportionately staff primary care and medically underserved areas (MUAs) and 3) disrupt established immigration pathways (e.g., J-1 → Conrad 30/IGA → H-1B) that retain physicians in designated shortage communities.
The proclamation does allow case-by-case National Interest Exceptions (NIEs), but some view NIEs as discretionary, documentary and administratively burdensome and not a scalable substitute for broad policy relief. Based on past practices with other executive orders/proclamations, healthcare workers, especially physicians in areas with shortages, are considered likely candidates for an NIE or a blanket exemption, although the U.S. Department of Homeland Security (DHS) has not officially issued any formal guidance regarding NIE exemptions for healthcare workers.
The Policy Change: What It Does
The presidential proclamation bars entry/approval of certain H-1B petitions and beneficiaries who are outside the U.S. unless the petition is accompanied by a $100,000 supplemental fee. DHS subsequently clarified certain scope/timing details, but the substance remains: a very large, prospective supplemental charge applied to new H-1B petitions.
This policy change matters for IMG sponsorship because healthcare employers, especially in rural and MUAs, rely heavily on IMGs to fill primary care and specialty shortages, and many IMGs rely on H-1B sponsorship after obtaining approval of their J-1 waiver applications. Adding $100,000 per new H-1B petition could make routine hiring of IMGs cost-prohibitive for many healthcare employers.
Quantifying the Workforce Stakes
The U.S. is facing a critical and growing physician shortage, particularly in primary care specialties. IMGs represent a vital resource for filling this gap. According to the 2025 National Resident Matching Program (NRMP), IMGs secured 6,653 PGY-1 positions, representing 16.6 percent of all matches. Their contribution is especially pronounced in primary care, where U.S. medical school graduates are increasingly underrepresented. Removing or restricting an affordable H-1B pathway risks exacerbating shortages where IMGs currently fill gaps.
How the $100,000 H-1B Fee Potentially Impacts IMG Sponsorship and Rural Care
- Direct Financial Barrier for Rural Hospitals: Rural/community hospitals operate on narrow margins. Paying an additional $100,000 per new physician – on top of existing recruiting, credentialing and malpractice costs – will likely be impractical. Even large health systems may resist paying for multiple new hires.
- Effect on Recruitment Pipelines: Healthcare employers could reduce recruitment of IMGs, instead attempting to recruit U.S. graduates (often unavailable or unwilling to locate in rural areas) or leave positions unfilled. Given the documented tendency of IMGs to accept rural/medically underserved posts, this can disproportionately affect underserved communities.
- Disruption of J-1 → Conrad 30/IGA → H-1B Conversion Model: Many IMGs, who complete residency or fellowship training in the U.S., will apply for a J-1 waiver to work in a medically underserved area and later change to H-1B status. The $100,000 fee makes this conversion costly and may deter both employers and IMGs. The net effect: Fewer J-1 waiver placements will translate into fewer physicians serving medically underserved communities.
- Resource Diversion: Hospitals forced to pay fees could divert funds from clinical programs, community health investments or local recruitment incentives. Alternatively, hospitals might shift to temporary staffing (locum tenens) at higher per-hour costs, reducing continuity of care.
- Long-Term Competitiveness and "Brain Drain": Higher U.S. immigration costs could have the unintended result of encouraging IMGs to choose other English-speaking countries offering clearer, less expensive immigration pathways (such as Canada, the United Kingdom and Australia), sapping the U.S. physician pipeline.
NIEs
As mentioned above, the proclamation permits NIEs when an individual's admission is determined to serve the U.S. national interest. The NIE mechanism was widely used during prior travel bans and in the 2025 travel proclamations.
NIEs can be issued by U.S. Citizenship and Immigration Services or the U.S. Department of State. The standard is discretionary and requires evidence that entry will materially advance a critical U.S. interest (public health, emergency medical care, critical infrastructure, major research projects, etc.).
Typical evidence that supports an NIE for physicians: strong employer letters explaining 1) the critical shortage being addressed – Health Professional Shortage Area (HPSA)/MUA metrics, 2) the absence of available U.S. physician candidates, 3) the physician's unique qualifications, 4) patient safety/continuity consequences of nonarrival and 5) supporting letters from community leaders, healthcare administrators, state health departments and/or hospital associations.
Why NIEs Are an Imperfect Solution for IMG Hiring
The NIE is discretionary and not defined by a brightline formula. NIEs are case-by-case and do not create an automatic, blanket exemption for a healthcare employer or class of workers. They also can be administratively burdensome and unpredictable. Preparing an NIE packet requires coordination, high-quality documentation and time; consular processing and internal agency coordination may be slow or inconsistent across agency posts. Such unpredictability undermines staffing timetables for residency/fellowship start dates and employer hiring needs.
NIEs are not a scalable fix for systemic physician shortages and cannot cost-effectively substitute for hundreds of H-1B petitions per year that the U.S. healthcare system relies upon. Additionally, NIE decisions/approvals may vary between U.S. consular posts or with the shifting winds of interagency policy priorities. Healthcare employers, therefore, cannot plan reliably if their hiring needs are contingent on NIE approval.
Practical Policy Fixes
To preserve the NIE process but make it predictable, scalable and equitable, DHS should consider publishing clear criteria and an expedited process so employers can plan accordingly. DHS could also create automatic carve-outs that administratively declare explicit exemptions to the $100,000 fee for categories such as:
- physicians working in federally designated HPSAs or MUAs/populations, community or safety-net hospitals, and J-1 waiver placements through the State Conrad 30 Programs or Interested Government Agencies, such as the Appalachian Regional Commission, Delta Regional Authority, Southeast Crescent Regional Commission, Northern Border Regional Commission or U.S. Department of Health and Human Services
- H-1B petitions filed by colleges/universities or nonprofit hospitals that are affiliated with institutions of higher education
Conclusion
This issue matters for healthcare employers because staffing decisions require months of advance planning for graduate medical education (GME) cycles, start dates, licensing and credentialing. If an employer cannot count on an exemption, it must either 1) pay in advance $100,000 immediately or 2) hire domestically – and for many specialties/locations, the domestic pool is insufficient. In the view of many, this is not a workable "exception."
The proclamation's allowance of case-by-case NIEs does not solve the problems the $100,000 H-1B fee creates for healthcare employers or for the pipeline of IMGs. NIEs are discretionary, slow, administratively heavy and (by design and precedent) narrowly applied. NIEs can create unpredictability and unequal access that small hospitals and rural programs might be unable to absorb. The fee itself imposes immediate, large cash burdens at precisely the points in the physician training and hiring cycle where timing and certainty matter. This could result in degraded staffing, higher costs and greater risk to access to care in underserved communities.
In short, the $100,000 H-1B fee could materially and disproportionately affect healthcare employers' ability to recruit IMGs who staff primary care and other shortage specialties, potentially exacerbating already critical provider shortages. Many view affordable immigration pathways for the IMG workforce as essential to achieving national health security and that NIEs are not a substitute for structural policy that preserves such pathways for healthcare providers.
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