PRINTER'S NO. 2262
No. 1654 Session of 1990
INTRODUCED BY PETERSON, PUNT, CORMAN, BRIGHTBILL, MADIGAN,
LOEPER, RHOADES, WILT, O'PAKE, HELFRICK, DAWIDA, STAPLETON,
WENGER, JUBELIRER, ROCKS, BAKER, LEMMOND, HOPPER AND
PORTERFIELD, JUNE 7, 1990
REFERRED TO EDUCATION, JUNE 7, 1990
AN ACT
1 Providing for assistance in the repayment of certain student
2 loans and for scholarships in relation to the encouragement
3 of physicians to practice medicine in the rural areas of this
4 Commonwealth; establishing the Rural Medical Scholarship and
5 Loan Fund Advisory Committee; and providing for its powers
6 and duties; establishing the Rural Medical Scholarship and
7 Loan Fund; and making an appropriation.
8 The General Assembly finds and declares that:
9 (1) Physicians tend to practice in the more populous
10 metropolitan areas and away from more sparsely populated
11 rural areas of this Commonwealth.
12 (2) Lower levels of reimbursement in rural areas for
13 certain critical primary care practices deter their
14 establishment in economically hard-pressed and sparsely
15 populated rural areas.
16 (3) Physicians typically begin their practices heavily
17 in debt from loans acquired to finance their education.
18 (4) Because of the lower levels of reimbursement and the
19 burden of educational debts, the number of primary care
1 physicians choosing to practice in rural areas is
2 insufficient to adequately meet the health needs of the
3 population.
4 (5) Repayment of student loans for primary care
5 physicians who set up practice in rural areas and the
6 provision of medical scholarships to rural residents to
7 engage in primary care practices in rural areas encourage the
8 establishment of critical primary care practices in rural
9 areas with a resultant benefit to all citizens of this
10 Commonwealth.
11 The General Assembly of the Commonwealth of Pennsylvania
12 hereby enacts as follows:
13 Section 1. Short title.
14 This act shall be known and may be cited as the Rural Medical
15 Scholarship and Loan Act.
16 Section 2. Definitions.
17 The following words and phrases when used in this act shall
18 have the meanings given to them in this section unless the
19 context clearly indicates otherwise:
20 "Agency." The Pennsylvania Higher Education Assistance
21 Agency.
22 "Committee." The Rural Medical Scholarship and Loan Fund
23 Advisory Committee.
24 "Department." The Department of Health of the Commonwealth.
25 "Designated shortage area." Any of the following and as
26 further defined by the Department of Health:
27 (1) An area designated by the Department of Health as a
28 physician shortage area using criteria which take into
29 account the special barriers to the provision of health care
30 services in a rural area.
19900S1654B2262 - 2 -
1 (2) A medically underserved area as designated by the
2 United States Department of Health and Human Services.
3 (3) A critical manpower shortage area as defined by the
4 United States Department of Health and Human Services.
5 "Fund." The Rural Medical Scholarship and Loan Fund.
6 "Primary care physician." A family practitioner as defined
7 by the American Board of Medical Specialties, a general
8 practitioner as defined by the American Osteopathic Board of
9 General Practice or a general pediatrician or general internist
10 or obstetrician-gynecologist as defined by the American Board of
11 Medical Specialties or the American Osteopathic Board of General
12 Practice.
13 Section 3. Rural Medical Scholarship and Loan Fund Advisory
14 Committee.
15 (a) Establishment and purpose.--There is hereby established
16 the Rural Medical Scholarship and Loan Fund Advisory Committee,
17 which shall advise and make recommendations to the agency on the
18 administration of the fund, the selection of loan and
19 scholarship recipients and the assignment of recipients to rural
20 designated shortage areas.
21 (b) Composition.--The committee shall be composed of 11
22 members which shall include:
23 (1) One member from the State Board of Medicine.
24 (2) One member from the State Board of Osteopathic
25 Medical Examiners.
26 (3) Two members of the Bureau of Rural Health Care
27 Services Advisory Committee.
28 (4) Seven members selected by the Governor as follows:
29 (i) Two licensed primary care physicians actively
30 practicing in rural areas of this Commonwealth.
19900S1654B2262 - 3 -
1 (ii) Two consumers who are residents of rural areas
2 of this Commonwealth.
3 (iii) One representative from a rural hospital.
4 (iv) One member of the Pennsylvania Medical Society.
5 (v) One member of the Pennsylvania Osteopathic
6 Medical Association.
7 (c) Terms of office.--Each member shall serve four years or
8 the term of the office by which he holds membership on the
9 committee, and until his successor has been appointed and
10 qualified, but not longer than six months beyond the applicable
11 period.
12 (d) Chairman.--The committee shall select annually a
13 chairman from among its members.
14 Section 4. Fund.
15 (a) Establishment.--There is hereby established in the State
16 Treasury a special fund to be known as the Rural Medical
17 Scholarship and Loan Fund.
18 (b) Administration and purpose.--The agency shall administer
19 the fund upon the advice and recommendations of the committee to
20 provide for repayment of rural primary care physicians' student
21 loans and for medical school or osteopathic medical college
22 scholarships for rural residents of this Commonwealth. Each year
23 20 loans or scholarships or any combination thereof shall be
24 awarded under the guidelines as set forth in section 5.
25 (c) Source of appropriation moneys.--Moneys collected by the
26 State Board of Medicine and the State Board of Osteopathic
27 Medical Examiners for the purposes of the fund shall be paid
28 into the fund. All moneys in the fund are hereby appropriated to
29 the agency on a continuing basis to carry out this act.
30 Section 5. Loan repayment assistance.
19900S1654B2262 - 4 -
1 (a) General rule.--The agency may provide assistance for the
2 repayment of any student loan for education at an institution of
3 higher learning in this Commonwealth, including loans for
4 undergraduate education, received by a physician and executed
5 prior to the effective date of this act. After the effective
6 date of this act, the agency, with the advice and upon the
7 recommendation of the committee, shall make loans from the fund
8 created under this act using the criteria developed under this
9 act and any other criteria developed by the agency that are not
10 inconsistent with this act. The agency may not provide repayment
11 assistance for a loan that is in default at the time of the
12 application.
13 (b) Eligibility.--To be considered for loan repayment
14 assistance, an applicant shall meet the following requirements:
15 (1) (i) be enrolled as a full-time student in an
16 accredited Pennsylvania medical school or osteopathic
17 medical college and be a legal resident of this
18 Commonwealth at the time of the application; or
19 (ii) have a medical degree from an accredited
20 Pennsylvania medical school or osteopathic medical
21 college and have completed an approved Pennsylvania
22 graduate training program in primary care medicine and be
23 licensed to practice medicine in this Commonwealth.
24 (2) Agree to serve in a designated shortage area of this
25 Commonwealth as a primary care physician one year for each
26 $25,000 in loans repaid by the agency.
27 Section 6. Contracts.
28 Each recipient of a repayment loan shall enter into a written
29 contract with the agency which shall be considered a contract
30 with this Commonwealth. In executing contracts, the agency shall
19900S1654B2262 - 5 -
1 give priority to those applicants who agree to engage in primary
2 care practice a minimum of three years in a rural designated
3 shortage area. The contract shall include the following terms
4 and conditions:
5 (1) An unlicensed applicant shall apply for a license to
6 practice medicine in this Commonwealth at the earliest
7 practicable opportunity.
8 (2) Within six months after licensure and the completion
9 of all requirements for the primary care specialty, the
10 applicant shall engage in the practice of primary care
11 medicine in the rural designated shortage area selected by
12 the agency upon the advice and recommendations of the
13 committee.
14 (3) The applicant shall agree to serve one full year for
15 each loan repayment of $25,000 made on his behalf.
16 (4) The physician shall treat patients in the rural area
17 eligible for Medicaid and Medicare and develop a sliding fee
18 scale for low-income patients.
19 (5) The physician shall practice full-time in the rural
20 designated shortage area.
21 (6) The physician shall permit the agency to monitor the
22 practice to determine compliance with the terms of the
23 contract.
24 (7) The agency shall certify compliance with the terms
25 of the contract for purposes of receipt by the physician of
26 loans for years subsequent to the initial year of the loan.
27 (8) The contract shall be renewable on an annual basis
28 upon certification by the agency that the physician has
29 complied with the terms of the contract.
30 (9) In the event of the recipient's death or total or
19900S1654B2262 - 6 -
1 permanent disability, the agency shall nullify the service
2 obligation of the recipient and the agency shall repay the
3 loan in full.
4 (10) In the event the recipient is convicted of a felony
5 or misdemeanor or the recipient commits an act of gross
6 negligence in the performance of service obligations or where
7 the license to practice has been revoked or suspended by the
8 appropriate licensing board, the agency shall have the
9 authority to terminate the recipient's service in the program
10 and demand repayment of the outstanding loan.
11 (11) No physician may receive repayment assistance for
12 more than five years.
13 (12) Loan recipients who fail to fulfill the obligations
14 contracted for shall pay to the agency a sum equal to three
15 times the amount received plus interest from the date of the
16 breach at the rate of 2% above the prime rate at the time of
17 the breach.
18 Section 7. Scholarships.
19 To be considered for scholarship assistance, an applicant
20 shall meet the following:
21 (1) Be a resident of a rural area of this Commonwealth
22 and have successfully completed undergraduate education at an
23 institution of higher learning of this Commonwealth.
24 (2) Agree to engage in the practice of primary care
25 medicine for a minimum of four years in a rural area to which
26 he is assigned by the agency in accordance with the
27 provisions of this act after completion of all requirements
28 for licensure as a physician in this Commonwealth and of the
29 primary care specialty.
30 (3) Meet such other criteria as shall be developed by
19900S1654B2262 - 7 -
1 the agency upon the advice and recommendation of the
2 committee as are not inconsistent with the purposes of this
3 act.
4 Section 8. Assignment criteria.
5 The agency, upon the advice and recommendation of the
6 committee, shall establish criteria for assigning recipients to
7 a rural designated shortage area. In making the assignments, the
8 agency shall match the characteristics and preferences of the
9 recipient with those of the area, population group or health
10 care facility to the extent possible to maximize the probability
11 of the recipient's remaining in the area upon completion of the
12 assignment period.
13 Section 9. Effective date.
14 This act shall take effect in 60 days.
E21L24DGS/19900S1654B2262 - 8 -