HB229 HD2

SECTION 1. The legislature finds that changes in Hawaii's demographics and the delivery of healthcare services, and an escalation in the cost of educating healthcare professionals have resulted in a shortage of healthcare professionals. The poor distribution of healthcare professionals has also resulted in a surplus of professionals in some areas and a shortage of others in other parts of the state. Health professional shortage areas are often rural areas that have troubled economies and populations with lower per capita incomes. These areas often require more services because their healthcare needs are greater due to poverty or geographic remoteness.

The legislature further finds that healthcare practitioners need to earn high incomes to pay for the high cost of their health professional education. Because they earn less in shortage areas, few healthcare professionals choose to serve in such areas. Encouraging more healthcare professionals to serve in shortage areas is essential to ensuring that rural residents have access to healthcare services.

The purpose of this Act is to establish the Hawaii health corps to provide incentives for healthcare professionals to accept positions in shortage areas.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

HAWAII HEALTH CORPS

§ -1 Definitions. As used in this chapter, unless the context otherwise requires:

"Eligible education and training programs" means education and training programs approved by the school for purposes of this chapter that lead to eligibility for a license as a licensed healthcare professional.

"Eligible expenses" means reasonable expenses associated with the costs of acquiring a professional education such as tuition, books, equipment, fees, room and board, and other expenses determined by the school.

"Eligible student" means a student who has been accepted into an eligible education and training program and has a declared intention to serve in a health professional shortage area upon completion of the education and training program.

"Forgiven" or "to forgive" or "forgiveness" means repayment of monetary debt through the rendering of healthcare services in a health professional shortage area in the state in lieu of monetary repayment.

"Health professional shortage areas" means those areas in the state where licensed healthcare professionals are in short supply as a result of geographic maldistribution or as the result of a short supply of licensed healthcare professionals in specialty healthcare areas and where vacancies exist in serious numbers that jeopardize patient care and pose a threat to the public health and safety.

"Licensed healthcare professional" means a person licensed under chapter 453, 460, 447, 448, 467E, or 457.

"Loan" means a loan made by the school under section ‑10 to be repaid in full or in part by a participant by rendering healthcare services in a health professional shortage area as defined by the school.

"Nonshortage rural area" means a nonurban area that has not been designated as a rural physician shortage area.

"Participant" means a licensed healthcare professional who has received a loan and has commenced practice as a licensed healthcare professional in a designated health professional shortage area, or an eligible student who has received a scholarship under this program.

"Program" means the Hawaii health corps program.

"Required service obligation" means an obligation by the participant to provide healthcare services in a health professional shortage area for a period to be established as provided for in this chapter.

"Rural physician shortage area" means rural geographic areas where primary care physicians are in short supply as a result of geographic maldistribution and where their limited numbers jeopardize patient care and pose a threat to public health and safety.

"Satisfied" means paid-in-full.

"School" means the University of Hawaii John A. Burns school of medicine.

"Scholarship" means a loan that is intended to be forgiven in whole or in part by the eligible student recipient's rendering healthcare services in a health professional shortage area.

"Sponsoring community" means a hospital or county government.

§ -2 Hawaii health corps program. The Hawaii health corps program is established in the University of Hawaii John A. Burns school of medicine to provide licensed healthcare professionals serving in health professional shortage areas. The program shall be administered by the school. In administrating this program, the school shall:

(1) Select licensed healthcare professionals to participate in the loan portion of the program and select eligible students to participate in the scholarship portion of the program;

(2) Adopt rules under chapter 91 and develop guidelines to administer the program;

(3) Collect and manage repayments from participants who do not meet their required service obligations under this chapter;

(4) Publicize the program, particularly to maximize participation by individuals in shortage areas and among ethnic groups expected to experience the greatest growth in the population;

(5) Identify the nonshortage rural areas of the state;

(6) Designate rural physician shortage areas;

(7) Solicit and accept grants and donations from public and private sources for the program; and

(8) Develop criteria for a contract for service in lieu of the required service obligation, where appropriate, that may be a combination of service and payment.

§ -3 Technical assistance for rural communities. The school may provide technical assistance to rural communities that desire to participate in the program for the purpose of identifying prospective students for the program. Additionally, the school shall provide the following assistance:

(1) Assist prospective students to apply to an eligible education and training program;

(2) Make formal agreements with prospective students to provide licensed healthcare services in the community;

(3) Form agreements between rural communities in a service area to share licensed healthcare professionals; and

(4) Fulfill any matching fund requirements.

§ -4 Criteria for selecting participants. The school shall establish a planning committee to assist the school in developing criteria for the selection of participants. The school shall include on the planning committee representatives of the school, department of health, healthcare facilities, provider groups, consumers, community and technical colleges, and other appropriate public and private agencies and organizations.

§ -5 Required service obligations. (a) The school shall:

(1) Establish loans for persons licensed to practice medicine or surgery or as a physician assistant pursuant to chapter 453, osteopathy pursuant to chapter 460, dentistry pursuant to chapter 448, dental hygiene pursuant to chapter 447, clinical social work under chapter 467E, or nursing pursuant to chapter 457. The amount of a loan shall not exceed:

(A) $10,000 per year of service for physicians and osteopathic physicians;

(B) $5,000 per year of service for physician assistants and advanced practice registered nurses; or

(2) Establish a scholarship program for eligible students who have been accepted into an eligible education and training program leading to a license pursuant to chapter 453, 460, 448, or 457. The amount of the scholarship shall not exceed:

(A) $10,000 per year of service for programs for medicine, surgery, osteopathy, or dentistry;

(B) $5,000 per year of service for programs for physician assistants, advanced practice registered nurses, and psychologists;

(D) $2,500 per year of service for programs for clinical social workers and dental hygienists,

and shall be awarded for a maximum of five years of service.

(b) In determining scholarship awards for prospective physicians, the selection criteria shall include requirements that eligible student recipients declare an interest in serving in rural areas of the state. Preference for scholarships shall be given to eligible students who reside in a rural physician shortage area or a nonshortage rural area of the State prior to admission to the eligible education and training program in medicine. Highest preference shall be given to eligible students seeking admission who are recommended by sponsoring communities and who declare an intent to serve as a physician in a rural area. The school may require the sponsoring community located in a nonshortage rural area to financially contribute to the eligible expenses of a medical student if the eligible student serves in the nonshortage rural area.

§ -6 Health professional shortage areas. The school shall:

(1) Determine eligible licensed healthcare professions for the purposes of the loan and scholarship program authorized by this chapter. Eligibility shall be based upon an assessment that determines that there is a shortage or insufficient availability of practitioners of a licensed profession so as to jeopardize patient care and pose a threat to the public health and safety. The school shall consider the relative degree of shortages among professions when determining eligibility. The school may add or remove professions from eligibility based upon the determination that a profession is no longer in shortage. Should a profession no longer be eligible, loan recipients or eligible students who have received scholarships shall be eligible to continue to receive scholarships or loans until they are no longer eligible or until their required service obligations have been completed; and

(2) Determine health professional shortage areas for each of the eligible licensed healthcare professions. In making health professional shortage area designations, the school may be guided by applicable federal standards for health manpower shortage areas, medically underserved areas, and medically underserved populations.

§ -7 Annual award amount; scholarship preferences; required service obligations. The school shall:

(1) Establish the annual award amount for each licensed healthcare profession, which shall be based upon an assessment of reasonable annual eligible expenses involved in training and educating each licensed healthcare profession. The annual award amount may be established at a level less than annual eligible expenses. The annual award amount shall be established by the school for each eligible healthcare profession. The awards shall not be paid for more than a maximum of ten years per individual;

(2) Determine any scholarship awards for eligible students in a manner that requires the recipients to declare an interest in serving in rural areas of the state. Preference for scholarships shall be given to eligible students who reside in a rural physician shortage area or a nonshortage rural area of the state prior to admission to the eligible education and training program in medicine. Highest preference shall be given to eligible students seeking admission who are recommended by sponsoring communities and who declare the intent of serving as a physician in a rural area. The school may require the sponsoring community located in a nonshortage rural area to financially contribute to the eligible expenses of a medical student if the eligible student serves in the nonshortage rural area;

(3) Establish the required service obligation for each licensed healthcare profession, which shall be no fewer than three years and no more than five years of service. The required service obligation may be based upon the amount of the scholarship or loan award such that higher awards involve longer service obligations by the participant; and

(4) Determine eligible education and training programs for purposes of the scholarship portion of the program.

§ -8 Loan and scholarship awards. (a) The school may grant loan and scholarship awards to eligible participants from the funds appropriated for this purpose, or from any private or public funds given to the school for this purpose. An individual is ineligible to receive a loan if the person has received or would be ineligible to receive a scholarship from the program authorized under this chapter.

(b) Funds appropriated for the program may be used by the school for:

(1) Loans or scholarships. The school shall annually establish the total amount of funding to be awarded for loans and scholarships, and such allocations shall be established based upon the best use of funding for that year; and

(2) As a recruitment incentive for activities in state-operated institutions, county public health departments, county human service agencies, federal and state contracted community health clinics, and other healthcare facilities identified by the school as providing substantial amounts of charity care or publicly subsidized healthcare.

§ -9 Discrimination by participants prohibited; violation. In providing healthcare services, the participant shall:

(1) Not discriminate against a person on the basis of the person's ability to pay for services or because payment for the healthcare services provided to these persons will be made under the insurance program established under Part A or B of Title XVIII of the federal Social Security Act or under a state plan for medical assistance, including Title XIX of the federal Social Security Act; and

(2) Agree to accept assignment under Section 1842(b)(3)(B)(ii) of the federal Social Security Act for all services for which payment may be made under Part B of Title XVIII of the federal Social Security Act and enter into an appropriate agreement with the school for medical assistance under Title XIX of the federal Social Security Act to provide services to individuals entitled to medical assistance under the plan.

Participants found by the school to be in violation of this section shall be declared ineligible to receive assistance under the program authorized by this chapter.

§ -10 Participant obligation; loans. (a) A participant who is awarded a loan shall receive payment from the program for the purpose of repaying educational loans secured while attending a program of healthcare professional training which led to a license as a licensed healthcare professional in the state.

(b) Each participant shall agree to meet the required service obligation in a designated health professional shortage area.

(c) Repayment amounts shall be limited to those attributable to eligible expenses as determined by the school and shall include principal and interest.

(d) Loans from both government and private sources may be repaid by the program. Participants shall agree to allow the school access to loan records and to acquire information from lenders necessary to verify eligibility and to determine payments. Loans may not be renegotiated with lenders to accelerate repayment.

(e) Loan repayments established pursuant to this program shall begin no later than ninety days after the individual has become a participant. Payments to the participant shall be made quarterly or more frequently if deemed appropriate by the school until:

(1) The educational loan has been repaid;

(2) The participant becomes ineligible due to discontinued service in a health professional shortage area; or

(3) The required service obligation ends when eligibility discontinues,

whichever occurs first.

(f) If a participant discontinues providing service in a health professional shortage area, payments for educational loans of that participant shall cease to be effective on the date that the participant discontinues service.

(g) Except for circumstances beyond their control, participants who serve less than the required service obligation shall be obligated to repay to the program an amount equal to twice the total amount paid by the program on their behalf, in addition to any payments on the unsatisfied portion of the principal and interest. The school shall determine the applicability of this subsection.

(h) The school shall be responsible for the collection of debts to the school from participants who discontinue providing service before completion of the required service obligation. The school shall exercise due diligence in making collections and maintaining all necessary records to ensure that the maximum amount of payment made on behalf of the defaulting participant is recovered. Collection under this section shall be pursued using the full extent of the law, including wage garnishment if necessary.

(i) The school shall not be held responsible for any outstanding payments on principal and interest to any lenders once a participant's eligibility expires.

§ -11 Participant obligation; scholarships. (a) Participants who are awarded scholarships incur an obligation to repay the scholarship, with interest, unless they serve the required service obligation in a health professional shortage area in the state.

(b) The interest rate shall be eight per cent for the first four years of repayment and ten per cent beginning with the fifth year of repayment.

(c) The period for repayment shall coincide with the required service obligation, with payments of principal and interest accruing quarterly commencing no later than nine months from the date the participant completes or discontinues the course of study or completes or discontinues the required residency. Provisions for deferral of payment shall be determined by the school.

(d) The entire principal and interest of each payment shall be forgiven for each payment period in which the participant serves in a health professional shortage area until the entire repayment obligation is satisfied. Should the participant cease to serve in a health professional shortage area of this state before the participant's repayment obligation is completed, payments on the unsatisfied portion of the principal and interest shall begin the next payment period and continue until the remainder of the participant's repayment obligation is satisfied. Except for circumstances beyond their control, participants who serve less than the required service obligation shall be obligated to repay to the program an amount equal to twice the total amount paid by the program on their behalf.

(e) The school shall be responsible for the collection of repayments made under this section and shall exercise due diligence in making collections and maintaining all necessary records to ensure that maximum repayments are made. Collection and servicing of repayments under this section shall be pursued using the full extent of the law, including wage garnishment if necessary. The school shall forgive all or parts of the required repayments under the criteria established in this section and shall maintain all necessary records of forgiven payments.

(f) Moneys collected that are paid by or on behalf of participants under this section, shall be deposited in the Hawaii health corps fund and shall be used to cover the costs of granting the scholarships, maintaining necessary records, and making collections under subsection (e). The school shall maintain accurate records of these costs, and all moneys beyond those necessary to pay such costs shall be used to grant scholarships to eligible students.

(g) Sponsoring communities who financially contribute to the eligible expenses of eligible medical students may enter into agreements with the student to require repayment should the student not serve the required service obligation in the community as a primary care physician. The school may develop criteria for the content of those agreements with respect to reasonable provisions and obligations between communities and eligible students.

(h) The school may make exceptions to the conditions for participation and repayment obligations should circumstances beyond the control of individual participants warrant those exceptions.

§ -12 Hawaii health corps fund. (a) There is established in the state treasury the Hawaii health corps fund which shall be a revolving fund to be administered by the school. Any funds appropriated by the legislature for the program or any other public or private funds intended for loans or scholarships under this program shall be placed in the Hawaii health corps fund.

(b) All moneys received from the program shall be deposited into the fund. The school may authorize expenditures from the fund for purposes of this chapter."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $1 or so much thereof as may be necessary for fiscal year 2007-2008 and the same sum or so much thereof as may be necessary for fiscal year 2008-2009 for purposes of the Hawaii health corps program and for the establishment of two full-time equivalent (2.00 FTE) permanent administrative assistant positions in the University of Hawaii John A. Burns school of medicine to assist in the administration of Hawaii health corps program.

The sums appropriated shall be expended by the University of Hawaii John A. Burns school of medicine for the purposes of this Act.

SECTION 4. This Act shall take effect on July 1, 2007.

HOUSE OF REPRESENTATIVES	H.B. NO.	229
TWENTY-FOURTH LEGISLATURE, 2007		H.D. 2
STATE OF HAWAII