To amend the Public Health Service Act to alleviate critical shortages of physicians in the fields of family practice, internal medicine, pediatrics, emergency medicine, general surgery, and obstetrics-gynecology, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``High-Need Physician Workforce 
Incentives Act of 2007''.

SEC. 2. HIGH-NEED PHYSICIAN SPECIALTY WORKFORCE INCENTIVES.

    Page E of title VII of the Public Health Service Act (42 U.S.C. 
294n et seq.) is amended by adding at the end the following:

    ``Subpart 3--High-Need Physician Specialty Workforce Incentives

``SEC. 775. SCHOLARSHIP PROGRAM.

    ``(a) Purpose.--The purpose of this section is to alleviate 
critical shortages of physicians in the fields of family practice, 
internal medicine, pediatrics, emergency medicine, general surgery, and 
obstetrics-gynecology.
    ``(b) Grants.--The Secretary, acting through the Administrator of 
the Health Resources and Services Administration, shall make grants to 
critical shortage health facilities to carry out a scholarship program 
described in this section.
    ``(c) Scholarships.--A health facility receiving a grant under this 
section shall use the grant to enter into contracts with eligible 
individuals under which--
            ``(1) the facility agrees to provide the individual with a 
        scholarship for each school year (not to exceed 4 school years) 
        in which the individual is enrolled as a full-time student in a 
        school of medicine or a school of osteopathic medicine; and
            ``(2) the individual agrees--
                    ``(A) to maintain an acceptable level of academic 
                standing;
                    ``(B) to complete a residency in the field of 
                family practice, internal medicine, pediatrics, 
                emergency medicine, general surgery, or obstetrics-
                gynecology; and
                    ``(C) after completing the residency, to serve as a 
                physician at such facility in such field for a time 
                period equal to the greater of--
                            ``(i) one year for each school year for 
                        which the individual was provided a scholarship 
                        under this section; or
                            ``(ii) two years.
    ``(d) Amount of Scholarship.--
            ``(1) In general.--The amount paid by a health facility to 
        an individual through a scholarship under this section shall 
        not exceed $30,000 for any school year.
            ``(2) Considerations.--In determining the amount of a 
        scholarship to be provided to an individual under this section, 
        a health facility may take into consideration the individual's 
        financial need, geographic differences, and educational costs.
            ``(3) Exclusion from gross income.--For purposes of the 
        Internal Revenue Code of 1986, gross income shall not include 
        any amount received as a scholarship under this section.
    ``(e) Application of Certain Provisions.--The provisions of subpart 
III of part D of title III shall, except as inconsistent with this 
section, apply to the program established under this section in the 
same manner and to the same extent as such provisions apply to the 
National Health Service Corps Scholarship Program established in such 
subpart.
    ``(f) Definitions.--In this subsection:
            ``(1) The term `critical shortage health facility' means a 
        public or private nonprofit health facility that does not serve 
        a health professional shortage area (as such term is defined in 
        section 332), but has a critical shortage of physicians (as 
        determined by the Secretary) in the field of family practice, 
        internal medicine, pediatrics, emergency medicine, general 
        surgery, or obstetrics-gynecology.
            ``(2) The term `eligible individual' means an individual 
        who is enrolled or accepted for enrollment as a full-time 
        student in an accredited school of medicine or school of 
        osteopathic medicine.
    ``(g) Authorization of Appropriations.--To carry out this section, 
there is authorized to be appropriated $5,000,000 for each of fiscal 
years 2008 through 2012.

``SEC. 776. LOAN REPAYMENT PROGRAM.

    ``(a) Purpose.--The purpose of this section is to alleviate 
critical shortages of physicians in the fields of family practice, 
internal medicine, pediatrics, emergency medicine, general surgery, and 
obstetrics-gynecology.
    ``(b) Loans.--The Secretary, acting through the Administrator of 
the Health Resources and Services Administration, shall establish a 
program of entering into contracts with eligible individuals under 
which--
            ``(1) the individual agrees to serve--
                    ``(A) as a physician in the field of family 
                practice, internal medicine, pediatrics, emergency 
                medicine, general surgery, or obstetrics-gynecology; 
                and
                    ``(B) in an area that is not a health professional 
                shortage area (as such term is defined in section 332), 
                but has a critical shortage of physicians (as 
                determined by the Secretary) in such field; and
            ``(2) the Secretary agrees to pay, for each year of such 
        service, not more than $35,000 of the principal and interest of 
        the undergraduate or graduate educational loans of the 
        individual.
    ``(c) Service Requirement.--A contract entered into under this 
section shall allow the individual receiving the loan repayment to 
satisfy the service requirement described in subsection (b)(1) through 
employment in a solo or group practice, a clinic, a public or private 
nonprofit hospital, or any other appropriate health care entity.
    ``(d) Application of Certain Provisions.--The provisions of subpart 
III of part D of title III shall, except as inconsistent with this 
section, apply to the program established in this section to the same 
extent and in the same manner as such provisions apply to the National 
Health Service Corps Loan Repayment Program established in such 
subpart.
    ``(e) Definition.--In this section, the term `eligible individual' 
means an individual with a degree in medicine or osteopathic medicine.
    ``(f) Authorization of Appropriations.--To carry out this section, 
there is authorized to be appropriated $5,000,000 for each of fiscal 
years 2008 through 2012.

``SEC. 777. PRIMARY CARE PHYSICIAN RETENTION AND MEDICAL HOME 
              ENHANCEMENT GRANTS.

    ``(a) Grants.--The Secretary, acting through the Administrator of 
the Health Resources and Services Administration, shall make grants to 
States to provide care management fees to physicians in medically 
underserved communities to support the provision of targeted, 
accessible, continuous, coordinated, and patient-centered care through 
a qualified medical home.
    ``(b) Qualified Medical Homes.--
            ``(1) In general.--In this section, the term `qualified 
        medical home' means a physician-directed practice that is 
        certified as a qualified medical home in accordance with this 
        subsection.
            ``(2) Actions by secretary.--Not later than 90 days after 
        the date of the enactment of this subpart, the Secretary 
        shall--
                    ``(A) designate one or more objective external 
                private-sector entities to certify physician-directed 
                practices as qualified medical homes; and
                    ``(B) issue requirements for such certification.
            ``(3) Requirements.--The requirements referred to in 
        paragraph (2)(B) shall set forth a certification process 
        whereby--
                    ``(A) a physician-directed practice, in 
                consultation with the State where the practice is 
                located, submits an application on a voluntary basis to 
                an entity designated by the Secretary under paragraph 
                (2)(A); and
                    ``(B) the entity certifies the practice as a 
                qualified medical home if the practice demonstrates 
                that the practice has capabilities to achieve 
                improvements in the management and coordination of care 
                of patients described in paragraph (4) by incorporating 
                attributes of the care management model described in 
                paragraph (5).
            ``(4) Eligible patients.--The patients referred to in 
        paragraph (3)(B)--
                    ``(A) are patients determined by the State involved 
                under criteria developed by the Secretary to be 
                underserved, special needs, or high risk patients; and
                    ``(B) shall include individuals who--
                            ``(i) are eligible for medical assistance 
                        under title XIX of the Social Security Act;
                            ``(ii) are eligible for child health 
                        assistance under title XXI of the Social 
                        Security Act; or
                            ``(iii) otherwise lack health insurance.
            ``(5) Care management model.--The care management model 
        referred to in paragraph (3)(B) is a model that uses health 
        information technology and other physician-practice innovations 
        to improve the management and coordination of patient care. 
        Such a model includes the following conditions:
                    ``(A) Physicians advocate for their patients to 
                support the attainment of optimal, patient-centered 
                outcomes that are defined by a care planning process 
                driven by a partnership between physicians, patients, 
                and the patient's family.
                    ``(B) Evidence-based medicine and clinical 
                decision-support tools guide decision making.
                    ``(C) Physicians in the practice accept 
                accountability for continuous quality improvement 
                through voluntary engagement in performance measurement 
                and improvement.
                    ``(D) Patients actively participate in 
                decisionmaking; patients take personal responsibility 
                for their own health through diet and lifestyle 
                changes; and feedback is sought to ensure that 
                patients' expectations are being met.
                    ``(E) Information technology is utilized 
                appropriately to support optimal patient care, 
                performance measurement, patient education, and 
                enhanced communication.
                    ``(F) Patients and families participate in quality 
                improvement activities at the practice level.
    ``(c) Amount of Care Management Fee.--
            ``(1) In general.--As a condition on the receipt of a grant 
        under this section, a State shall agree to determine the amount 
        of each care management fee provided through the grant in 
        accordance with the guidance issued by the Secretary under 
        paragraph (2).
            ``(2) Guidance.--Not later than 90 days after the date of 
        the enactment of this Act, the Secretary shall issue guidance 
        for determining the amount of a care management fee to be 
        provided through a grant under this section. Such guidance 
        shall take into account the costs of implementation, additional 
        time by participating physicians, and training associated with 
        compliance with this section. Such guidance shall include--
                    ``(A) recognition of the value of physician and 
                clinical staff work associated with patient care that 
                falls outside the face-to-face visit, such as the time 
                and effort spent on educating family caregivers and 
                arranging appropriate follow-up services with other 
                health care professionals, such as nurse educators;
                    ``(B) recognition of expenses that the qualified 
                medical home will incur to acquire and utilize health 
                information technology, such as clinical decision 
                support tools, patient registries, and electronic 
                medical records;
                    ``(C) additional performance-based reimbursement 
                payments based on reporting on evidence-based quality, 
                cost of care, and patient experience measures;
                    ``(D) reimbursement for separately identifiable e-
                mail and telephonic consultations, either as 
                separately-billable services or as part of a global 
                management fee;
                    ``(E) recognition of the specific circumstances and 
                expenses associated with physician practices of fewer 
                that 5 full-time employees in implementing the 
                attributes of a qualified medical home and care 
                management model described in subsection (b); and
                    ``(F) recognition and sharing of savings that may 
                result from a qualified medical home.
    ``(d) Application.--A State seeking a grant under this section 
shall submit an application to the Secretary at such time, in such 
manner, and containing such information as the Secretary may require. 
Each such application shall describe the methodologies to be used by 
the State to determine the amount of care managements fees to be 
provided through the grant.
    ``(e) Authorization of Appropriations.--To carry out this section, 
there is authorized to be appropriated $10,000,000 for each of fiscal 
years 2008 through 2012.

``SEC. 778. COMPREHENSIVE GERIATRIC TRAINING GRANTS.

    ``(a) Grants.--The Secretary, acting through the Administrator of 
the Health Resources and Services Administration, shall make grants to 
board-certified entities to establish or expand geriatric fellowship 
programs described in subsection (b).
    ``(b) Geriatric Fellowship Programs.--A geriatric fellowship 
program funded through a grant under this section shall provide 1-year 
fellowships to train physicians practicing in rural areas or in the 
field of family practice, internal medicine, emergency medicine, 
general surgery, or obstetrics-gynecology, at any time during their 
careers, in geriatric medicine.
    ``(c) Amount.--As a condition on the receipt of a grant under this 
section, an entity shall agree to expend not more than $50,000 of the 
grant per fellow.
    ``(d) Preference.--In awarding grants under this section, the 
Secretary shall give preference to entities seeking to establish or 
expand a fellowship program in a rural area, a suburban area, or a 
medically underserved community.
    ``(e) Authorization of Appropriations.--To carry out this section, 
there is authorized to be appropriated $1,000,000 for each of fiscal 
years 2008 through 2012.

``SEC. 779. REPORTS TO CONGRESS.

    ``Not later than 1 year after the date of the enactment of the 
High-Need Physician Workforce Incentives Act of 2007, and annually 
thereafter, the Secretary shall submit a report to the Congress--
            ``(1) identifying the number of grants and loans made under 
        this section during the preceding 12-month period; and
            ``(2) describing the results achieved through such grants 
        and loans, including the extent to which such grants and loans 
        met the needs of the physician workforce in rural areas and in 
        the fields of family practice, internal medicine, pediatrics, 
        emergency medicine, general surgery, and obstetrics-
        gynecology.''.

SEC. 3. EXEMPTION FROM GROSS INCOME FOR CERTAIN COMPENSATION PAID TO 
              PHYSICIANS BY LOCAL GOVERNMENTS FOR SERVICE IN MEDICALLY 
              UNDERSERVED AREAS.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to items specifically excluded 
from gross income) is amended by adding at the end the following new 
section:

``SEC. 139B. CERTAIN COMPENSATION PAID TO PHYSICIANS BY LOCAL 
              GOVERNMENTS FOR SERVICE IN MEDICALLY UNDERSERVED AREAS.

    ``(a) In General.--Gross income does not include compensation 
received by a physician (as defined in section 1861(r) of the Social 
Security Act) from a local government (as defined in section 
1393(a)(5)) for qualified medical service.
    ``(b) Qualified Medical Service.--For purposes of this section, the 
term `qualified medical service' means medical care described in 
section 213(d)(1)(A) which is performed--
            ``(1) in a medically underserved community (as defined in 
        section 799B(6) of the Public Health Service Act), and
            ``(2) under a contract with the local government referred 
        to in subsection (a) for the performance of such services for a 
        period of not less than 4 years.
    ``(c) No Exemption From Employment Taxes.--Compensation shall not 
fail to be taken into account as wages under any provision of subtitle 
C solely because such compensation is excluded from gross income under 
this section.''.
    (b) Clerical Amendment.--The table of sections for part III of 
subchapter B of chapter 1 of such Code is amended by inserting after 
the item relating to section 139A the following new item:

``Sec. 139B. Certain compensation paid to physicians by local 
                            governments for service in medically 
                            underserved areas.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

Summary: High-Need Physician Workforce Incentives Act of 2007 - Amends the Public Health Service Act to require the Secretary of Health and Human Services, acting through the Administrator of the Health Resources and Services Administration, to make grants to critical shortage health facilities for scholarships to individuals agreeing to serve as a physician at such facility after completing residency in the fields of family practice, internal medicine, pediatrics, emergency medicine, general surgery, or obstetrics-gynecology. Excludes such scholarship funds from an individual's gross income.

Requires the Secretary, acting through the Administrator, to: (1) establish a loan repayment program for individuals agreeing to serve as physicians in specified fields in areas that are not health professional shortage areas, but that have a critical shortage of physicians in such field; (2) make grants to states to provide care management fees to physicians in medically underserved communities to support the provision of targeted, accessible, continuous, coordinated, and patient-centered care through a qualified medical home; and (3) make grants to board-certified entities to establish or expand geriatric fellowship programs to train physicians practicing in rural areas or in specified fields in geriatric medicine.

Amends the Internal Revenue Code to exclude from an individual's gross income compensation received by a physician from a local government for medical care performed: (1) in a medically underserved community; and (2) under a contract with the local government for a period of not less than four years.