Debt Collection: More Aggressive Action Needed To Collect Debts Owed by Health Professionals

Highlights

Pursuant to a congressional request, GAO evaluated the Department of Health and Human Services' (HHS) Health Resources and Services Administration's (HRSA) debt collection efforts under its financial assistance programs for health professions and medical facilities, focusing on the: (1) Health Professions Student Loan Program; (2) Nursing Student Loan Program; (3) National Health Service Corps Scholarship Program; (4) Health Education Assistance Loan Program; and (5) Health Facilities Direct and Guaranteed Loan Program.

Recommendations

Recommendations for Executive Action

Agency Affected	Recommendation	Status
Department of Health and Human Services	The Secretary of Health and Human Services should direct the Administrator, HRSA, to establish time limits within which schools participating in the Health Professional and Nursing Student Loan programs must determine the collectibility of delinquent loans and must request HRSA write-off approval for those which are determined to be uncollectible.	Closed – Implemented HHS published regulations on October 1, 1991, to implement this recommendation.
Health Resources and Services Administration	The Administrator, HRSA, should set time limits within which the schools must reimburse the funds, or HRSA (in the case of those schools which are no longer participating in the programs) for those loans for which the schools did not follow required collection procedures.	Closed – Implemented HHS published regulations on October 1, 1991, to implement this recommendation.
Department of Health and Human Services	The Secretary of Health and Human Services should direct the Administrator, HRSA, to reduce the collection process time in the scholarship program. Under the scholarship program, HRSA should: (1) establish, in accordance with law, the full repayment date as 1 year from the date of default; (2) issue periodic notices and attempt telephone contacts based on predetermined time frames during the 1-year period; and (3) aggressively pursue collection after the 1-year period following the date of initial default by adhering to procedures in the Public Health Service's (PHS) debt management manual.	Closed – Implemented HHS established the full repayment date as 1 year from date of default and now issues notices to recipients at the time notification of default is received, and 30 and 60 days prior to the repayment date. HHS now adheres to established time limits in performing collection actions.
Department of Health and Human Services	The Secretary of Health and Human Services should direct the Administrator, HRSA, to reduce the collection process time in the insured loan program. Under the insured loan program, HRSA should adhere to strict time frames and guidance established by PHS in its debt management manual for completing the collection process, including routinely referring delinquent cases to consumer reporting agencies.	Closed – Implemented HHS now refers claims immediately to a collection agency and to Justice within 12 months. Claims are also referred to consumer reporting agencies.
Department of Health and Human Services	To facilitate the collection of unpaid debts, the Secretary of Health and Human Services should direct the Administrators of the Health Care Financing Administration and HRSA to pilot test the offset of Medicare reimbursements to physicians delinquent on HRSA medical educational assistance. If the pilot test successfully demonstrates the merits of the offset procedure, offset should be fully implemented.	Closed – Not Implemented Instead of offset, HHS plans to exclude delinquent physicians from the Medicare program. HHS believes the threat of exclusion will provide a strong incentive for delinquent physicians to repay their debts.

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Topics

Auditing and Financial Management

Collection proceduresDebt collectionDelinquent loansGovernment collectionsHealth care facilitiesHealth care personnelLoan defaultsMedical educationScholarship programsStudent loans