H-1B Proclamation 'Fee' And Extreme Vetting Fallout: A Perfect Storm For Healthcare

In fiscal year 2024, approximately 8,492 H-1B visas were approved for workers in medicine and health occupations.¹ The American Medical Association and over 50 national specialty societies and state medical associations expressed serious concerns over the $100,000 H-1B fee imposed by the Presidential Proclamation, warning that it could worsen the U.S. physician shortage, projected to reach 86,000 by 2036, including a shortage of 50,440 psychiatrists.² The groups urged the Department of Homeland Security to exempt foreign physicians from this fee. Educators are also a major group using H-1B visas, with nearly 30,000 petitions approved in 2024, often for positions in rural areas.³

The H-1B Presidential Proclamation, effective at 12:01 am eastern daylight time on September 21, 2025 (Proclamation Effective Date), requires a $100,000 payment or National Interest Exception (NIE) waiver for new I-129 petitions filed with U.S. Citizenship and Immigration Services (USCIS) for nonimmigrant H-1B workers outside the U.S. without a valid H-1B visa or an approved H-1B I-129 petition on or before the Proclamation Effective Date.⁴ The Proclamation is set to expire on September 21, 2026, unless extended.

Importantly, cap-exempt employers, such as nonprofit colleges, universities, affiliated organizations, and research institutions, still must pay the $100,000 fee, unless an NIW waiver is approved, despite existing statutory fee reductions under the American Competitiveness and Workforce Improvement Act (ACWIA) and the fraud fee.⁵ Unfortunately, no NIEs have been granted to date, leaving many healthcare and academic employers unable to hire H-1B workers without incurring the fee, which can exacerbate staffing shortages. Many employers have been forced to withdraw offers due to the lack of an NIE or inability to pay the $100,000 payment.

Several lawsuits have been filed challenging the Proclamation. Global Nurse Force et al. v. Donald Trump et al., was filed in the Northern District of California on October 3, 2025. Chamber of Commerce et al. v. DHS et al., was filed in the District of Columbia on October 16, 2025. Finally, the State of California et al. v. DHS Secretary Kristi Noem et al., a 20-state case including California, Massachusetts, Arizona, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Michigan, Minnesota, Nevada, New Jersey, New York, North Carolina, Oregon, Rhode Island, Vermont, Washington, and Wisconsin, was filed in the District of Massachusetts on December 12, 2025.⁶

In the Chamber case, Judge Howell issued a Memorandum Opinion on December 23, 2025, finding that the Proclamation was lawful. The Opinion notes that the President has broad authority over immigration matters affecting economic and national security, and claims of ultra vires action or violations of the Administrative Procedures Act were rejected.⁷ Meanwhile, USCIS delays in approving NIE exceptions mean the $100,000 payment is effectively required for many employers, creating urgent staffing crises.

The Proclamation also signaled changes to the H-1B lottery system. It directed the Department of Labor (DOL) to revise and raise prevailing wage levels to ensure H-1B visas go to highly skilled workers and DHS to prioritize high-skilled, high-paid applicants. DHS published its Final Rule on December 29, 2025, effective February 27, 2026, implementing a weighted selection process for the 2026 H-1B lottery.⁸ The Final Rule makes drastic changes in the lottery selection process. Beneficiaries with Level IV wages will be entered four times, Level III three times, Level II twice, and Level I once in the lottery shifting the selection rate from Levels I and II. DHS projects a 48.33% reduction in Level I selections, a 55.02% increase in Level III selections, and a 106.69% increase in Level IV selections.

The weighted lottery process poses risks for healthcare employers. The American Hospital Association (AHA) highlighted that H-1B healthcare workers evidence wide compensation variations. In 2024, the 25th and 50th percentile wages for healthcare H-1B recipients were $20,000 lower than comparable wages across all occupations. Approximately 67% of healthcare H-1B workers, including pharmacists, technicians, physicians, and therapists, are paid at Level I or II wages, while only 2.3% receive Level IV wages.⁹ Consequently, the weighted lottery favors higher-paid applicants, potentially reducing approvals for critical lower-paid healthcare positions, further straining hospitals, clinics, and academic medical centers already facing staffing shortages.

The combined effect of the $100,000 fee, stringent vetting, and the new weighted lottery process has created a "perfect storm" for healthcare and education. Employers are struggling to recruit necessary staff, particularly in rural or underserved areas, and budgetary planning is severely disrupted. The situation underscores the importance of H-1B workers in sustaining the U.S. healthcare system and academic institutions. Stakeholders are encouraged to educate state governors and Congressional representatives on the critical role of H-1B workers, and to monitor or participate in ongoing litigation and policy advocacy efforts.

Footnotes

1. See USCIS Characteristics of H-1B Specialty Occupation Workers Fiscal Year 2024 Annual Report to Congress (Apr. 29, 2025), at p. 3 https://www.uscis.gov/sites/default/files/document/reports/ola_signed_h1b_characteristics_congressional_report_FY24.pdf. USCIS, Characteristics of H-1B Specialty Occupation Workers Fiscal Year 2024 Annual Report to Congress, in FY 2024, 141,205 initial employment H-1B petitions were granted.

2. See Letter to Kristi Noem from National Medical Societies and State Medical Associations (Sept. 25, 2025), https://searchlf.ama-assn.org/letter/documentDownload?uri=/unstructured/binary/letter/LETTERS/lfimg.zip/Sign-on-Letter-Restriction-on-Entry-of-Certain-Nonimmigrant-Workers-Proclamation-9-25-25.pdf.

3. See National Education Ass'n, NEA Data Brief: H-1B Visas in Public School Districts (Oct. 8, 2025), https://www.nea.org/resource-library/nea-data-brief-h-1b-visas-public-school-districts.

4. See Proclamation entitled, "Restriction on Entry of Certain Nonimmigrant Workers," No. 10973, 90 Fed. Reg. 46,027 (Sept. 19, 2025) and https://www.whitehouse.gov/presidential-actions/2025/09/restriction-on-entry-of-certain-nonimmigrant-workers/.

5. See 8 CFR §214.2(h)(8)(iii)(F); 8 USC §1184(c)(9)-(14).

6. Id.

7. See 5 USC §§551 et seq.

8. See 90 Fed. Reg. 60864 (Dec. 29, 2025).

9. See https://www.aha.org/lettercomment/2025-10-24-aha-comments-dhs-proposed-h-1b-visa-weighted-selection-process and https://www.uscis.gov/sites/default/files/document/reports/ola_signed_h1b_characteristics_congressional_report_FY24.pdf.