Bill Text: NJ S162 | 2012-2013 | Regular Session | Amended


Bill Title: Provides loan redemption for certain physicians who work in State four years.*

Spectrum: Slight Partisan Bill (Democrat 15-7)

Status: (Enrolled - Dead) 2014-01-21 - Pocket Veto - Bills not Acted on by Governor-end of Session [S162 Detail]

Download: New_Jersey-2012-S162-Amended.html

[First Reprint]

SENATE, No. 162

STATE OF NEW JERSEY

215th LEGISLATURE

 

PRE-FILED FOR INTRODUCTION IN THE 2012 SESSION

 


 

Sponsored by:

Senator  ROBERT W. SINGER

District 30 (Monmouth and Ocean)

Senator  JOSEPH F. VITALE

District 19 (Middlesex)

 

Co-Sponsored by:

Senators Weinberg, Ruiz, Allen, Gill and Gordon

 

 

 

 

SYNOPSIS

     Provides loan redemption for certain physicians who work in State four years.

 

CURRENT VERSION OF TEXT

     As reported by the Assembly Higher Education Committee on December 12, 2013, with amendments.

  


An Act concerning loan redemption for certain physicians 1[,]1 and 1[amending and]1 supplementing chapter 71C of Title 18A of the New Jersey Statutes.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    There is established a Physician Loan Redemption Program within the Higher Education Student Assistance Authority to provide for the redemption of eligible qualifying loan expenses of program participants who work in the State for 1[ten] four1 years of service at an approved site in the State.

 

     2.    As used in this act:

     "Approved site" means a site located within a State designated 1medically1 underserved area 1[or a health professional shortage area, or a site that has been determined by the Higher Education Student Assistance Authority, in consultation with the Department of Health, to serve medically underserved populations according to criteria determined by the authority, including, but not limited to, the percentage of medically underserved patients served] or within five miles of the State designated medically underserved area.  An "approved site" shall also include a non-profit health clinic that falls outside the State designated medically underserved area1 .

     "Authority" means the Higher Education Student Assistance Authority.

     "Eligible qualifying loan expenses" means the cumulative outstanding balance of student loans covering the cost of attendance at undergraduate and graduate institutions of medical professional education 1[at the time an applicant is selected for the program]1.  Interest paid or due on qualifying loans that an applicant has taken out for use in paying the costs of undergraduate and graduate medical care professional education shall be considered eligible for reimbursement under the program.  The total amount of qualifying loans which may be redeemed for participants under the program shall not exceed the maximum amount authorized by the federal government, either in State funds or the sum of federal, State, and other non-federal matching funds, pursuant to section 338I of the Public Health Service Act (42 U.S.C. s.254q-1), whichever is applicable.

     "Executive director" means the executive director of the Higher Education Student Assistance Authority.

     1"Full-time" means a minimum of 40 hours per week for a
minimum 45 weeks per year.

     "Half-time" means a minimum of 20 hours per week, not to exceed 39 hours per week, for a minimum 45 weeks per year.1

     "Physician" means a State-licensed professional who has obtained a degree in allopathic or osteopathic medicine.

     1"Primary care" means the practice with board certification of the specialty of family medicine, general pediatrics, general internal medicine, and general obstetrics in an ambulatory setting.1

     "Program" means the Physician Loan Redemption Program established pursuant to this act.

     "Program participant" means a physician who contracts with the authority to engage in the clinical practice of primary care or in the clinical practice of specialized care, if the specialty is projected to experience a significant shortage, at an approved site in exchange for the redemption of eligible qualifying loan expenses provided under the program. 

     "Projected physician specialty shortage" means those medical specialties for which a shortage of practitioners in New Jersey is projected by the 1[Advisory Graduate Medical Education Council] Commissioner of Health1, in consultation with the New Jersey Council of Teaching Hospitals, pursuant to this act.

     "Qualifying loan" means a government or commercial loan for the actual costs paid for tuition and reasonable education and living expenses relating to the obtaining of a degree in allopathic or osteopathic medicine.

     "State designated 1medically1 underserved area" means a 1[geographic area in this State which has been ranked by the Commissioner of Health on the basis of health status and economic indicators as reflecting a physician shortage pursuant to N.J.S.18A:71C-35, and which has a projected physician specialty shortage] New Jersey municipality which has more than 20% of its households under 150% of the federal poverty level.  In addition to these municipalities, the Commissioner of Health, in consultation with the Commissioner of Human Services and the New Jersey Council of Teaching Hospitals, shall annually designate and establish a ranking of State designated medically underserved areas, including both health professional shortage areas and medically underserved areas-populations.  The criteria used by the Commissioner of Health in making the designations shall include, but not be limited to: the financial resources of the population under consideration; the population's access to primary care and specialty services through private physician practices; and appropriate physician availability in State, county, municipal, and private nonprofit health care facilities.  The Commissioner of Health shall transmit the list of State designated medically underserved areas and the number of positions needed in a specialty area, when identified by the commissioner, to the authority by January 1 of each year, except that the first list shall be transmitted not later than 90 days after the date of enactment of this act1.   

     "Total and permanent disability" means a physical or mental disability that is expected to continue indefinitely or result in death and renders a participant in the program unable to perform that person's service obligation, as determined by the executive director or his designee.

     "Undergraduate medical education" means the period of time between entry into medical school and the award of a degree in allopathic or osteopathic medicine.

 

     3.    To be eligible to participate in the program, 1[an applicant] a program participant1 shall:

     a.    be a resident of the State;

     b.    be a graduate of a medical school approved by the State Board of Medical Examiners for the purpose of licensure and receive a recommendation from the school's medical staff concerning participation in the loan redemption program;

     c.    have completed an accredited residency training program and received a recommendation from the director of the training program concerning participation in the loan redemption program; and

     d.    agree to practice at an approved site under the terms and conditions provided in section 1[4] 51 of this act.

     1Nothing in this section shall prohibit a program participant from initiating the program's application process and identifying and committing to employment at an approved site prior to the establishment of State residency or being granted a State medical license. Eligibility for program participation shall be contingent on satisfying the residency and licensure requirements of this section.1

 

     14.   To be eligible as an approved site, the site shall:

     a.    accept payments from the Medicaid and Medicare programs;

     b.    use a sliding fee scale for patients falling under 250% of the federal poverty levels; and

     c.    not discriminate against any patient in the provision of health care services on the basis of that person's ability to pay or source of payment.1

 

     1[4.] 5.1  a.  In administering the program, the authority or its designated agent shall contract only with a physician.

     b.    The contract shall require a program participant to1[:

     (1)]1 serve at least a 1[10-year] four-year1 period at an approved site in the full-time 1or half-time service of a1 clinical practice of primary care or specialized care1[;

     (2)   charge for professional services at the usual and customary rate prevailing in the area in which the approved site is located, but allow a patient who is unable to pay that charge to pay at a reduced rate or receive care at no charge;

     (3)   not discriminate against any patient in the provision of health care services on the basis of that person's ability to pay or source of payment; and

     (4)   agree not to impose any charge in excess of the limiting fee for a service, as determined by the United States Secretary of Health and Human Services, to a recipient of benefits under the federal Medicare program established pursuant to Pub.L.89-97 (42 U.S.C.s.1395 et seq.)]1.

     c.    The contract shall also specify the applicant's dates of required service 1[and] ,1 the total amount of eligible qualifying loan expenses to be redeemed by the State in return for service, and 1[stipulate that the applicant has knowledge of and agrees to the six-month probationary period required prior to final acceptance into the program pursuant to section 6 of this act] the schedule of payments for the term of the contract1.

 

     1[5.] 6.1     Maximum redemption of a loan under the loan redemption program shall be 100% of the eligible qualifying loan expenses 1for full-time service and 50% of the eligible qualifying loan expenses for half-time service1, subject to the maximum amount authorized by the federal government pursuant to section 338I of the Public Health Service Act (42 U.S.C. s.254q-1), in return for 1[10] four1 years of service, to be reimbursed as follows:

     a.  first year of service, 1[5%] 18%1 of principal and interest;

     b.  second year of service, 1[5%] 26%1 of principal and interest;

     c.  third year of service, 1[10%] 28%1 of principal and interest; 1and1

     d.  fourth year of service, 1[10%] 28%1 of principal and interest1[;

     e.  fifth year of service, 10% of principal and interest;

     f.  sixth year of service, 10% of principal and interest;

     g.  seventh year of service, 10% of principal and interest;

     h.  eighth year of service, 10% of principal and interest;

     i.  ninth year of service, 10% of principal and interest; and

     j.  tenth year of service, 20% of principal and interest]1.

     No amount of eligible qualifying loan expenses shall be redeemed for services performed for less than a full year.

 

     1[6. Each program participant shall serve a six-month probationary period upon initial placement at an approved site.  During that period, the primary care or specialty staff, as appropriate, of the approved site, together with the program participant and the executive director or his designee, shall evaluate the suitability of the placement for the program participant.  At the end of the probationary period, the primary care or specialty staff shall recommend the continuation of the program participant's present placement, a change in placement, or its determination that the program participant is an unsuitable candidate for the program.  If the primary care or specialty staff of the approved site recommends a change in placement, the executive director or a designee shall approve an alternate placement at an approved site.  If the primary care or specialty staff determines that the program participant is not a suitable candidate for the program, the executive director or his designee shall take this recommendation into consideration in regard to the program participant's final acceptance into the program.  No loan redemption payment shall be made during the six-month probationary period; however, a program participant shall receive credit for the six-month period in calculating the first year of required service under the loan redemption contract.]1

 

     7.    The executive director or his designee, in consultation with the Commissioner of Health, shall match program participants to State designated 1medically1 underserved areas. 1Nothing in this section shall prohibit a program applicant or participant from identifying an approved site for consideration and approval of the program.1

 

     8.    The executive director or his designee shall select the program participants from among those applicants who meet the eligibility criteria established pursuant to section 3 of this act, subject to available funds and available approved sites. 1[In the event that there are insufficient funds or approved sites to select all of the applicants who meet the eligibility criteria, the] The1 executive director or his designee shall accord priority to applicants in the following manner:

     a.    first, to any applicant who is 1[closest to completing the loan redemption contract] willing to fill openings at an approved site with the most significant physician shortages1;

     b.    second, to any applicant 1[according to the severity of the physician shortage in the area or specialty selected by the applicant] whose residence in the State at the time of initiating application was within a State designated medically underserved area or within five miles of a State designated medically underserved area1; and

     c.    third, to any applicant 1[whose residence in the State at the time of entry into postsecondary education was within a State designated underserved area] who graduated from a high school or institution of higher education in New Jersey, or graduated from a New Jersey medical school or residency program1.

     In the event that there are more applicants who have the same priority than there are program positions, the executive director or his designee shall select program participants by means of a lottery or other form of random selection.

 

     9.    a.  A program participant, as a condition of participation, shall be required to adhere to performance standards established by the executive director or his designee.

     b.    The standards shall include, but not be limited to, requirements that a participant:

     (1)   maintain residency in the State;

     (2)   maintain a license or certification to practice medicine in the State;

     (3)   remain current with payments on student loans;

     (4)   enter into a mutually acceptable contract with an approved site;

     (5)   maintain satisfactory performance of services rendered at an approved site; and

     (6)   report to the authority or its designee, on a form and in a manner prescribed by the authority or its designee, on the program participant's performance of services rendered at an approved site prior to repayment of the annual amount eligible for redemption.

 

     10.  A program participant who has previously entered into a contract with the authority may nullify the agreement by notifying the authority in writing and reassuming full responsibility for the remaining outstanding balance of the loan debt.  In no event shall service at an approved site for less than the full calendar year of each period of service entitle the program participant to any benefits under the program.  A program participant seeking to nullify the contract before completing the 1[tenth] fourth1 full year of service shall be required to pay 50% of the redeemed portion of indebtedness in not more than one year following nullification of the agreement.

 

     11.  In case of a program participant's death or total and permanent disability, the authority or its designee shall nullify the service obligation of the program participant.  The nullification shall terminate the authority's obligations under the loan redemption contract1[, except in] . In1 the event 1[that] of1 a program participant's death or total and permanent disability 1[occurs during the eighth year of service]1, the authority shall not require repayment of the prior redeemed portion of indebtedness.  1[When continued enforcement of the contract may result in extreme hardship, the authority or its designee may nullify or suspend the service obligation of the program participant.]1

     12.  A person who knowingly or willfully furnishes any false or misleading information for the purpose of receiving loan redemption benefits under the program is guilty of a crime of the fourth degree.

 

     13.  a.  The executive director or his designee is authorized to terminate the program participant's service in the program in the case of:

     (1)   a program participant's conviction of a crime or an act of gross negligence in the performance of service obligations;

     (2)   suspension or revocation of the program participant's license or certification to practice; or

     (3)   a program participant's breach of the performance standards established pursuant to section 9 of this act.

     b.    A program participant who fails to repay an amount due the authority under the program may be subject to actions initiated by the authority or its designee, which may include, but are not limited to, recovery of the amount due by an action brought in a court of competent jurisdiction or through the offset of State tax refunds or rebates, making this information available to credit reporting agencies, and exclusion from eligibility for any student assistance benefits administered by the authority, as well as action by the federal government, to the extent that loan redemption benefits are federally funded, to recover any amount due it as permitted by federal law.  In any action brought by the authority or its designee in a court of competent jurisdiction pursuant to this subsection, the program participant shall be liable for: the debt incurred, interest on the debt at the maximum legal prevailing rate as determined by the United States Treasurer, and the administrative and court costs associated with collection of the debt.

 

     14.  A student who is participating in the federally administered National Health Service Corps Loan Repayment Program, section 338B of the Public Health Service Act (42 U.S.C.s.254 l-1), or in the Primary Care Practitioner Loan Redemption Program, N.J.S.18A:71C-32 et seq., shall not be eligible to participate simultaneously in the Physician Loan Redemption Program.

 

     15.  1[The executive director or his designee may, within the limits of available funds and in accordance with eligibility criteria determined by the executive director or his designee, make payments in a reasonable amount, as determined by the executive director or his designee, to reimburse a program participant for all or part of any increased tax liability incurred by the participant,] The redemption of eligible qualifying loan expenses under this program shall be exempt from the program participant's individual New Jersey State income tax1 pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.1[, which results from the redemption of eligible qualifying loan expenses under the program.]1

 

     116.  In the case of an approved site that is a private primary care physician practice that has hired a loan redemption program participant, it shall have a State income tax exemption for all practice revenues received from providing services under the Medicaid program.1

 

     117.  On or after the date of enactment of this act, the authority shall not contract with a physician for participation in the Primary Care Practitioner Loan Redemption Program.  A physician who entered into a contract with the authority pursuant to that program prior to the date of enactment shall be eligible to remain in the program according to the terms of the contract.1

 

     118.  In Fiscal Year 2015 and each fiscal year thereafter, no more than $750,000 shall be appropriated annually to the Primary Care Practitioner Loan Redemption Program.1

 

     119.  In Fiscal Year 2015 and each fiscal year thereafter, no less than $750,000 shall be appropriated annually to the Physician Loan Redemption Program.1

 

     1[16.] 20.1  This act shall take effect immediately, except that 1[the Higher Education Student Assistance Authority may take such anticipatory administrative action in advance as shall be necessary for the implementation of the act] sections 18 and 19 of this act shall take effect on July 1, 20141.

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