National Health Service Corps: Changes in Funding and Impact on Recruitment

Summary

The National Health Service Corps (NHSC) recruits and places trained individuals in underserved communities to provide health care services at approved sites. In exchange for a two-year service commitment in federally designated health professional shortage areas (HPSAs), individuals receive scholarships or loan repayments. NHSC clinicians may fulfill their service commitment at approved Federally Qualified Health Centers (FQHCs), FQHC Look-Alikes, Rural Health Clinics, Critical Access Hospitals, and other approved sites.

The primary objective of the NHSC is to increase the availability of primary care services to underserved populations. The NHSC offers scholarships, loan repayments, and loan forgiveness to individuals in selected health professions. In FY2015, an estimated 8,495 NHSC clinicians will provide medical, dental, and other health care services to 8.9 million individuals in underserved communities. Also, in FY2015, the NHSC will award an estimated 2,272 new loan repayment agreements; 1,629 continuing loan repayment agreements; 100 student to service loan repayments; 464 state loan repayments; 163 new scholarships; and 14 continuing scholarships to individuals in various health professions.

The NHSC was established in the Emergency Health Personnel Act of 1970 (P.L. 91-623), and it has been amended and reauthorized several times since its inception. Most recently, Congress revised the NHSC in the Patient Protection and Affordable Care Act of 2010 (ACA; P.L. 111-148) by amending statutory authorities associated with part-time service, teaching credits toward service obligations, and exclusions from an individual’s gross income for those payments from state loan repayment or loan forgiveness programs that seek to increase health care access in HPSAs or other designated underserved areas. The NHSC is based within the Health Resources and Services Administration (HRSA), an agency in the Department of Health and Human Services (HHS).

The ACA created a new Community Health Center Fund (CHCF) and required that a total of $1.5 billion in mandatory CHCF appropriations be transferred to the NHSC over the course of FY2011 through FY2015. Prior to the ACA, Congress had appropriated funds for the NHSC solely through the discretionary appropriations process for the Departments of Labor, Health and Human Services, and Education, and Related Agencies (Labor-HHS-ED). Since FY2012, in the absence of discretionary funding, the CHCF has been the NHSC’s only funding source. On April 16, 2015, the President signed P.L. 114-10, Medicare Access and CHIP Reauthorization Act (MACRA), which amends the ACA to extend mandatory funding for the NHSC from FY2015 through FY2017. Total NHSC funding, regardless of the source, affects the size of the NHSC health workforce that is available to provide health services in underserved areas. This report briefly summarizes the NHSC programs, describes recent trends in clinician service, reviews funding trends for FY2009 through FY2015, and includes data from the President’s FY2016 budget.