B-226466, Feb 25, 1988

B-226466: Feb 25, 1988

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DIGEST: The Health Professions Loan Repayment Program authorized financial assistance for physicians in repaying debts incurred in medical school as an inducement for them to enter into agreements committing themselves to serve in physician shortage areas for extended periods after the agreements were executed. The program was not designed to provide payments as a gratuity for past services. No payment may be allowed to a physician on an application submitted after the program was phased out for benefits predicated on his past service in a shortage area. Throughout that period Belle Glade was located in a "health manpower shortage area. That his application to participate in the program was therefore untimely and could not be accepted.

B-226466, Feb 25, 1988

DIGEST: The Health Professions Loan Repayment Program authorized financial assistance for physicians in repaying debts incurred in medical school as an inducement for them to enter into agreements committing themselves to serve in physician shortage areas for extended periods after the agreements were executed. The program was not designed to provide payments as a gratuity for past services. Hence, no payment may be allowed to a physician on an application submitted after the program was phased out for benefits predicated on his past service in a shortage area.

Dr. William R. Bartley-- Health Professions Loan Repayment Program:

Dr. William R. Bartley requests reconsideration of our Claims Group's denial of his claim for payment under the Health Professions Loan Repayment Program based on his practice of medicine in a designated physician shortage area between February 1978 and June 1982. We sustain the denial of his claim.

BACKGROUND

Dr. Bartley attended medical school between 1970 and 1975. He borrowed amounts totaling $19,400 from several sources to finance his medical school education.

In February 1978 Dr. Bartley accepted an appointment with the Public Health 8ervice (PHS) to serve as a physician at the Glades Community Health Center, Belle Glade, Florida. He remained in that position until June 1982. Throughout that period Belle Glade was located in a "health manpower shortage area," as so designated under the provisions of 42 U.S.C. Sec. 254e.

In February 1981 Dr. Bartley submitted to the HRA-85-1, "Request to Enter an Agreement for Service in, a Shortage Area." In it he requested payment to satisfy the debts he had incurred while attending medical school between 1970 and 1975. He claimed this payment under a program administered by the PHS, the Health Professions Loan Repayment Program, on the basis of his previous 3 years of service at Belle Glade, Florida, as well as his continued service at that locality.

The PHS advised Dr. Bartley that it had stopped accepting applications under the Health Professions Loan Repayment Program in April 1980 because of budgetary constraints, and that his application to participate in the program was therefore untimely and could not be accepted. Upon his further inquiry, the PHS informed him that advance notice of the phase-out of the program had been published in the Federal Register in July 1979. Dr. Bartley then submitted his claim to our Office for review, and our Claims Group affirmed the action of the PHS.

In requesting reconsideration, Dr. Bartley expresses the belief that he was not properly notified of the phase-out of the loan repayment program. He says it is his understanding that others who practiced medicine in designated physician shortage areas received government assistance in paying off debts they had incurred during attendance at medical school, and he questions the fairness of denying him this same benefit simply because he did not file his application prior to April 1980.

ANALYSIS AND CONCLUSION

Provisions of statutory law governing the Health Professions Loan Repayment Program are contained in subsection 294n(f), title 42 of the United States Code. Supplemental regulations issued by the Department of Health and Human 8ervices are set out in subsection 57.212, title 42 of the Code of Federal Regulations.

These provisions of statute and regulation authorize payments for physicians to satisfy debts they incurred in furtherance of their professional education. Debts covered are those arising from participation in a federally sponsored health professions student loan program, and "any other educational loan" contracted before October 12, 1976, for the purpose of financing a medical school education. /1/ In order to qualify for benefit payments, however, physicians must first enter into an agreement to serve for a period of at least 2 consecutive years in a designated "health manpower shortage area," and physicians who subsequently fail to fulfill their service commitments are held liable to make restitution. /2/ Payments authorized are amounts equal to 30 percent of the principal and interest on each unpaid loan for each of the first 2 years served under an agreement, with payment of an additional 25 percent authorized under an agreement for a third year of service. /3/

Although the Health Professions Loan Repayment Program remains authorized under codified provisions of law, as indicated, the program was phased out in 1980 due to budgetary constraint, and it has remained unfunded since then. We are unaware of any statute of regulation which required advance notice of the phase-out of the program beyond that which was provided.

In addition, the plain terms of 42 U.S.C. Sec. 294n(f) and 42 C.F.R. Sec. 57.212 make it clear that the Health Professions Loan Repayment Program was not designed to provide gratuitous payments to physicians for past service in physician shortage areas. Rather, the statute and regulations authorize payment only as an inducement for physicians to move to and remain in these areas under agreements for their future service. We have previously held, concerning similar service agreements of physicians for comparability allowances and incentive pay under 5 U.S.C. Sec. 5948 and 37 U.S.C. Sec. 302, that the failure to execute a written agreement in advance of the service period precludes the payment of benefits unless there is evidence of an intent to execute a timely agreement, and the failure to execute is shown to be result of a lack of forms or other administrative error. /4/

In this case, it appears from the record presented that Dr. Bartley could have qualified for financial assistance under the Health Professions Loan Repayment Program following his graduation from medical school in 1975, if he had entered into an agreement to provide future service as a physician for at least 2 consecutive years in a physician shortage area. It also appears that in February 1978, some 3 years after his graduation, he did begin to practice medicine in a physician shortage area. There is no indication in the record presented, however, that he was induced to do so by the loan repayment program or that he intended at that time to enter into a long-term service commitment in return for benefits under that program. Further, there is no indication of any administrative error that prevented the execution of a service agreement at that time. Hence, even though he did subsequently remain in the physician shortage area for an extended period, we are unable to conclude that he is entitled to payment based on the application he submitted years later, after the loan repayment program had been phased out, in which he requested benefits essentially for past services.

Accordingly, we sustain the denial of Dr. Bartley's claim.

/1/ See 42 U.S.C. Sec. 294n(f)(1)(B); and 42 C.F.R. Sec. 57.212(a)(2).

/2/ 42 U.S.C. Sec. 294n(f)(1)(C) and (f)(4); 42 C.F.R. Sec. 57.212(a)(3).

/3/ 42 U.S.C. Sec. 294n(f)(2); 42 C.F.R. Sec. 57.212(b).

/4/ Lieutenant General Paul W. Myersc USAF, Retired, B-214118, June 1, 1984; Physicians Comparability Allowance, B-206535, Mar. 8, 1983; Variable Incentive Pay Contracts, B-192338, Sept. 19, 1978.