Rural America faces a severe shortage of health care professionals, as we pointed out in our report The Top 10 Issues for Health Care Reform. Large parts of rural America are considered Health Professional Shortage areas or Medically Underserved Areas, and only nine percent of the nation’s physicians practice in rural communities. Trends and practice patterns may also worsen the situation. Only three percent of recent medical school graduates plan to practice in rural areas. Now two new bipartisan bills in Congress help address this looming crisis.

S. 860, introduced by Sen.Ben Nelson of Nebraska along with Senators Barrasso(Wyoming), Merkley (Oregon), Johanns (Nebraska), Carper (Delaware), Klobuchar(Minnesota) and Kaufman (Delaware) seeks to address a tax situation for new health care professionals that exists in at least 17 states. In order to promote rural practices among debt-strapped graduates of medical, dental and other health care professional schools, state programs help repay student loans in return for a promise to practice in rural areas. Rural communities in need of health care professionals often contribute an amount as an incentive for the new graduate to come to the community.

 

Unfortunately, in at least 17 states the loan repayment amount and the community incentive amount become taxable income to the new health care professional. This obviously works as a disincentive for any doctor, dentist or other health care professional to accept the state loan repayment amount or the community’s well-intentioned incentive. S. 860 simply excludes from an individual’s gross income any amounts received from federal or state health care professional loan repayment or loan forgiveness programs.

 

Another disincentive for health care professionals in rural areas is the amount health care providers receive from federal programs such as Medicare as reimbursement for their services. The disparity between rural and non-rural reimbursement rates is a long-standing issue that has consequences for the ability of health care professionals to practice in rural areas and for health care providers in rural areas to remain economically viable.

 

H.R. 2201, the “Medicare Equity and Accessibility Act of 2009,” hopes to address this issue by increasing and creating a floor for the geographic cost factor in the Medicare Program. It is another bipartisan proposal introduced by Reps. Braley (Iowa), Smith (Nebraska), Barrow(Georgia), Teague (New Mexico), Boucher(Virginia) and Kind (Wisconsin). The bill would increase reimbursements for rural health care providers and remove some of the current rural disparity in reimbursement rates. Ultimately, this proposal would make practicing in rural areas a bit more attractive for health care professionals.

 

Proposals such as these are important contributions on how to reform the health care system so it works for rural people and rural communities. As the larger health care reform debate begins in Congress, we hope that proposals such as S. 860 and H.R. 2201 are considered.

 

Contact: Jon Bailey, jonb@cfra.org or 402.687.2103 x 1013 for more information.