Pass/Fail Grading and United States Medical Licensing Examination (USMLE) Step 1 Reform: Implications for Clinical-Year Assessment and USMLE Step 2 Clinical Knowledge (CK) Performance

The transition to pass/fail grading in undergraduate medical education (UME), alongside the change to pass/fail reporting for the United States Medical Licensing Examination (USMLE) Step 1, represents a substantial shift in assessment across the medical education continuum. These reforms were motivated by concerns regarding learner well-being, excessive competition, and misalignment between assessment practices and educational goals. This narrative review synthesizes empirical, survey-based, and conceptual literature to examine the effects of preclinical pass/fail grading and Step 1 pass/fail reporting on learner outcomes, clinical-year assessment, and USMLE Step 2 Clinical Knowledge (CK) performance. Across national and institutional studies, preclinical pass/fail grading is associated with improved learner well-being without evidence of inferior Step 1 or Step 2 CK performance. Early post-reform evidence suggests that Step 1 pass/fail reporting has redistributed evaluative emphasis toward Step 2 CK and clinical-year performance measures, raising concerns regarding variability and equity in workplace-based assessment. Collectively, the literature underscores the importance of transparent, equitable, and programmatic assessment systems during the clinical years.