PRINTER'S NO. 3972
No. 2813 Session of 1990
INTRODUCED BY DORR, WOZNIAK, MILLER, MORRIS, ROBBINS, TRELLO,
HERMAN, JADLOWIEC, GODSHALL, BUSH, CLYMER, DISTLER,
DIETTERICK, CARLSON, WILSON, TELEK, G. SNYDER, SEMMEL, NOYE,
MERRY, SCHEETZ, PESCI, SCHULER, DEMPSEY, S. H. SMITH, GEIST,
FARGO, BURD, HALUSKA, JOHNSON, D. W. SNYDER, HUGHES, LEE,
D. F. CLARK AND McHALE, JULY 1, 1990
REFERRED TO COMMITTEE ON HEALTH AND WELFARE, JULY 1, 1990
AN ACT
1 Establishing a scholarship and loan forgiveness program which
2 provides for an increase in physicians in certain rural areas
3 of this Commonwealth.
4 The General Assembly of the Commonwealth of Pennsylvania
5 hereby enacts as follows:
6 Section 1. Short title.
7 This act shall be known and may be cited as the Rural Medical
8 Student Scholarship and Physician Loan Forgiveness Act.
9 Section 2. Findings and declaration of intent.
10 The General Assembly finds and declares that:
11 (1) Physicians tend to practice in the more populous
12 metropolitan areas and away from more sparsely populated
13 rural areas of this Commonwealth.
14 (2) Lower levels of reimbursement for certain critical
15 primary care practices deter their establishment in
16 economically hard-pressed and sparsely populated rural areas.
1 (3) Physicians typically begin their practices heavily
2 in debt from loans acquired to finance their education.
3 (4) Because of the lower levels of reimbursement and the
4 burden of educational debts, the numbers of primary care
5 physicians choosing to practice in rural areas is
6 insufficient to adequately meet the health needs of the
7 population.
8 (5) Repayment of student loans for primary care
9 physicians who set up practice in rural areas and the
10 provision of scholarships to rural residents desirous of
11 attending medical school and of setting up primary care
12 practices in rural areas encourages the establishment of
13 critical primary care practices in rural areas with a
14 resultant benefit to all citizens of this Commonwealth.
15 Section 3. Definitions.
16 The following words and phrases when used in this act shall
17 have the meanings given to them in this section unless the
18 context clearly indicates otherwise:
19 "Agency." The Pennsylvania Higher Education Assistance
20 Agency.
21 "Committee." The Rural Medical Student Scholarship and
22 Physician Loan Repayment Fund Advisory Committee established by
23 this act.
24 "Designated shortage area." Any of the following:
25 (1) An area designated by the Department of Health as a
26 physician shortage area using criteria which take into
27 account the special barriers to the provision of health care
28 services in a rural area.
29 (2) A medically underserved area as designated by the
30 United States Department of Health and Human Services.
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1 (3) A critical manpower shortage area, as defined by the
2 United States Department of Health and Human Services or as
3 further defined by the Department of Health of the
4 Commonwealth.
5 "Fund." The Rural Medical Student Scholarship and Physician
6 Loan Repayment Fund created under this act.
7 "Primary care physician." Any of the following:
8 (1) A family practitioner, as defined by the American
9 Board of Medical Specialties.
10 (2) A general practitioner, as defined by the American
11 Osteopathic Board of General Practice.
12 (3) A general pediatrician, general internist or
13 obstetrician-gynecologist, as defined by the American Board
14 of Medical Specialties or the American Osteopathic Board of
15 General Practice.
16 Section 4. Rural Medical Student Scholarship and Physician Loan
17 Repayment Fund Advisory Committee.
18 (a) Creation.--There is hereby established the Rural Medical
19 Student Scholarship and Physician Loan Repayment Fund Advisory
20 Committee, which shall advise and make recommendations to the
21 agency on the administration of the fund, the selection of loan
22 and scholarship recipients and the assignment of recipients to
23 designated shortage areas.
24 (b) Members.--The committee shall be comprised of 11
25 members, which shall include:
26 (1) One member from the State Board of Medicine.
27 (2) One member from the State Board of Osteopathic
28 Medical Examiners.
29 (3) Two members of the Bureau of Rural Health Care
30 Services Advisory Committee.
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1 (4) Seven members selected by the Governor, as follows:
2 (i) Five licensed primary care physicians actively
3 practicing in rural areas of this Commonwealth.
4 (ii) One member of the Pennsylvania Medical Society.
5 (iii) One member of the Pennsylvania Osteopathic
6 Medical Association.
7 Section 5. Rural Medical Student Scholarship and Physician Loan
8 Repayment Fund.
9 (a) Creation.--There is hereby established in the agency the
10 Rural Medical Student Scholarship and Physician Loan Repayment
11 Fund.
12 (b) Purpose.--Moneys collected by the State Board of
13 Medicine and the State Board of Osteopathic Medical Examiners
14 for the purposes of this act shall be paid into the fund.
15 (c) Administration.--The agency shall administer the fund
16 upon the advice and recommendations of the committee to provide
17 for repayment of rural primary care physicians' student loans
18 and for medical school or osteopathic medical college
19 scholarships for rural residents of this Commonwealth. Each
20 year, 20 loans or scholarships shall be awarded under the
21 guidelines as set forth in section 6.
22 Section 6. Scholarship and loan repayment program.
23 (a) Eligibility for loan repayment.--To be considered for
24 loan repayment assistance, an applicant shall agree to serve in
25 a designated shortage area of this Commonwealth as a primary
26 care physician for a period of one year for each $25,000 in
27 loans repaid by the agency and shall:
28 (1) be enrolled as a full-time student in an accredited
29 Pennsylvania medical school or osteopathic medical college
30 and be a legal resident of this Commonwealth at the time of
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1 the application; or
2 (2) have a medical degree from an accredited
3 Pennsylvania medical school or osteopathic medical college
4 and have completed an approved Pennsylvania graduate training
5 program in primary care medicine and be licensed to practice
6 medicine in this Commonwealth.
7 (b) Authorization of agency to repay.--The agency may
8 provide assistance for the repayment of any student loan for
9 education at an institution of higher learning in this
10 Commonwealth, including loans for undergraduate education,
11 received by a physician and executed prior to the effective date
12 of this act.
13 (c) Criteria.--The agency, with the advice and upon the
14 recommendations of the committee, shall make loans from the fund
15 using the criteria set forth in subsection (a) and criteria
16 developed by the agency that are consistent with this act.
17 (d) Default.--The agency may not provide repayment
18 assistance for a loan that is in default at the time of the
19 application.
20 (e) Contract required.--Each recipient of a repayment loan
21 shall enter into a written contract with the agency which shall
22 be considered a contract with this Commonwealth. In executing
23 contracts, the agency shall give priority to those applicants
24 who agree to engage in primary care practice for a minimum of
25 three years in a designated shortage area.
26 (f) Contract terms and conditions.--The contract required
27 under subsection (e) shall include the following terms and
28 conditions:
29 (1) An applicant who is not licensed in this
30 Commonwealth shall apply for a license to practice medicine
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1 in this Commonwealth at the earliest practicable opportunity.
2 (2) Within six months after licensure and the completion
3 of all requirements for the primary care specialty, the
4 applicant shall engage in the practice of primary care
5 medicine in the designated shortage area selected by the
6 agency upon the advice and recommendations of the committee.
7 (3) An applicant shall agree to practice in a designated
8 shortage area for one full year for each loan repayment of
9 $25,000 made on his behalf.
10 (4) The applicant shall agree to treat patients in the
11 rural area eligible for Medicaid and Medicare and develop a
12 sliding fee scale for low-income patients.
13 (5) The applicant shall agree to practice full time in
14 the designated shortage area.
15 (6) The applicant shall agree to permit the agency to
16 monitor the practice to determine compliance with the terms
17 of the contract.
18 (7) The agency shall certify compliance with the terms
19 of the contract for purposes of receipt by the applicant of
20 loans for years subsequent to the initial year of the loan.
21 (8) The contract shall be renewable on a yearly basis
22 upon certification by the agency that the applicant has
23 complied with the terms of the contract.
24 (9) In the event of a loan forgiveness recipient's death
25 or total or permanent disability, the agency shall nullify
26 the service obligation of the recipient, and the agency shall
27 repay the loan in full.
28 (10) If a loan forgiveness recipient is convicted of a
29 felony or misdemeanor or commits an act of gross negligence
30 in the performance of service obligations or if the license
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1 to practice has been revoked or suspended by the appropriate
2 licensing board, the agency shall have the authority to
3 terminate the recipient's service in the program and demand
4 repayment of the outstanding loan.
5 (11) No physician may receive repayment assistance for
6 more than five years.
7 (12) Loan recipients who fail to fulfill the obligations
8 contracted for shall pay to the agency a sum equal to three
9 times the amount received plus interest from the date of the
10 breach at the rate of 2% above the prime rate at the time of
11 the breach.
12 (g) Eligibility for scholarship assistance.--To be
13 considered for scholarship assistance, an applicant shall:
14 (1) Be a resident of a rural area of this Commonwealth
15 and have successfully completed undergraduate education at an
16 institution of higher learning in this Commonwealth.
17 (2) Agree to engage in the practice of primary care
18 medicine for a minimum of four years in a rural area to which
19 he is assigned by the agency, in accordance with the
20 provisions of this act, after completion of all requirements
21 for licensure as a physician in this Commonwealth and of the
22 primary care specialty.
23 (3) Meet such other criteria as shall be developed by
24 the agency upon the advice and recommendations of the
25 committee as are not inconsistent with the purposes of this
26 act.
27 Section 7. Assignment criteria.
28 The agency, upon the advice and recommendations of the
29 committee, shall establish criteria for assigning recipients to
30 a designated shortage area. In making the assignments, the
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1 agency shall match the characteristics and preferences of the
2 recipient with those of the area, population group or health
3 care facility to the extent possible to maximize the probability
4 of the recipient's remaining in the area upon completion of the
5 assignment period.
6 Section 8. Effective date.
7 This act shall take effect in 60 days.
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