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National Health Service Corps (NHSC)
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The National Health Service Corps (NHSC) provides scholarships and loan repayment awards to physicians and other health practitioners in exchange for primary care service in a federally designated Health Professions Shortage Area (HPSA). The NHSC also matches state funding for participating NHSC State Loan Repayment Programs. Read about the AAMC's proposed changes to the NHSC in the zero-cost Medical Education Debt bill.
For FY 2015, the president’s budget requests a total of $810 million for the NHSC, a $505 million (166 percent) increase over the $305 million provided by the mandatory Affordable Care Act (ACA) NHSC Fund.
While the NHSC has been fully funded by the ACA NHSC fund since FY 2011, the president’s request for NHSC includes $100 million in discretionary appropriations. The remaining mandatory funding proposed includes $310 million from the ACA fund and $400 million from a new mandatory fund. The president’s budget also indicates that the NHSC only spent $283 million of the $305 million provided under the ACA fund in FY 2014.
The president’s proposed $4 billion in mandatory funding for the NHSC through FY 2024 will require additional legislative action. The majority of the proposed funding ($3.9 billion) is frontloaded for fiscal years 2015-2020. Starting in FY 2015, the administration projects a field strength of 15,400 primary care clinicians compared to 8,899 in FY 2013.
The Affordable Care Act
On March 23, President Obama signed the Affordable Care Act (ACA, P.L. 111-148), with a number of changes to the National Health Service Corps (NHSC). The law creates a mandatory NHSC Fund at the discretion of the Secretary of Health and Human Services (HHS). With this new mandatory fund, the Secretary may provide up to $1.5 billion to the NHSC over 5 years ($290 million for FY2011, $295 million for FY2012, $300 million for FY2013, $305 million for FY2014, and $310 million for FY2015).
The NHSC has established the Students to Service (S2S) Loan Repayment Program (LRP) due in part to this increased funding. The S2S LRP pilot awards $120,000 to 4th year medical students entering their 1st year of residency (over 4 years) in exchange for 3 years of NHSC service.
Additionally, ACA authorizes NHSC to expand the benefits of the scholarship and loan repayment programs. The law allows the Secretary to waive the requirement that NHSC service be provided in full-time clinical practice so that the service obligation could be fulfilled on a half-time basis (i.e., a minimum of 20 hours per week in clinical practice).
Individuals fulfilling their service obligation in this manner would have to agree to double the period of obligated service that would otherwise be required, or, if receiving loan repayment, accept a minimum of two years of obligated service and 50 percent of the amount that would otherwise be provided.
ACA increases the maximum annual NHSC loan repayment amount from $35,000 to $50,000, adjusted annually for inflation beginning in FY2012. The law permits the Secretary to treat teaching as clinical practice for up to 20 percent of the period of obligated NHSC service. However, for NHSC clinicians participating in the new Teaching Health Centers GME program, up to 50 percent of time spent teaching may be counted towards the NHSC service obligation.
ACA incrementally increases the annual congressional funding authorization for the NHSC to $1.15 billion in FY 2015. The law also provides a formula for increased authorizations in future years proportionate to increases in the cost of health professions education and increases in the population that resides in health professional shortage areas.
Matthew Shick, J.D.
Senior Legislative Analyst, Government Relations
Telephone: 202- 828-0525