The California Medical Association (CMA) recently testified before the U.S. Department of Education, urging it to fix the Public Service Loan Forgiveness program to ensure qualifying California and Texas physicians can receive federal loan forgiveness consistent with their colleagues in every other state. 

Represented by Elizabeth McNeil, CMA vice president of federal government relations, CMA told the department that  California and Texas physicians have been placed at a severe disadvantage.

“California and Texas physicians can participate in the program under the statutory language as Congress wrote it,” said McNeil. “But when the implementing regulations were written, the department  unintentionally narrowed it to require participants – in our case physicians – to be ‘hired and paid by’ a non-profit hospital.”

The inadvertent exclusion is severely limiting California’s ability to recruit and retain physicians because they cannot receive loan forgiveness, and the inequity ultimately harms patient access to physicians in community hospitals and clinics.

“Congress has been clear about the intent of the program and the need to fix it,” McNeil said.

A bipartisan group of California and Texas members of Congress recently submitted a joint letter to the U.S. Department of Education, urging it to fix the program to ensure qualifying California and Texas physicians can receive federal loan forgiveness consistent with their colleagues in every other state. The vast majority of the California Congressional Delegation signed on to the letter.

“Our physician counterparts in all other 48 states receive loan forgiveness. This is just not equitable,” said McNeil. “We should not be disqualified because of the unique employment prohibition in our states.”

CMA has been advocating for a fix for many years, but regulators have been unwilling to reopen the regulations and fix the PSLF program to allow all eligible California and Texas physicians to participate. The Dept. of Education recently announced, however, plans to transform and improve the PSLF through the negotiated rulemaking process.

A bipartisan bill has also been introduced in Congress – the Stopping Doctor Shortages Act – which would clarify that physicians in states that prohibit hospitals from directly employing physicians are still eligible for loan forgiveness.