National Health Service Corps: Background, Funding, and Programs
Released: 2017-04-18T00:00:00

Summary:
The National Health Service Corps (NHSC) is a pipeline for clinician recruitment and training. Its program objective is to increase the availability of primary care services to populations in Health Professional Shortage Areas (HPSAs). It aims to increase clinician availability by making loan repayments and awarding scholarships to individuals in exchange for their agreement to serve as NHSC clinicians (or providers) at approved sites. NHSC providers are mainly physicians, physician assistants, nurse practitioners, and behavioral/mental health professionals who must serve for a minimum of two years at an approved facility. An approved facility, for example, may be a Federally Qualified Health Center (FQHC) and FQHC Look-Alike, American Indian and Native Alaska Health Clinic, Rural Health Clinic, Critical Access Hospital, School-Based Clinic, Mobile Unit, Free Clinic, or Community Mental Health Center, and must be located in a federally designated HPSA. All NHSC providers must fulfill a minimum of two-year service commitment at an NHSC-approved site. The NHSC is administered by the Health Resources and Services Administration (HRSA), within the Department of Health and Human Services (HHS). Congress created the NHSC in the Emergency Health Personnel Act of 1970 (P.L. 91-623), and since then has reauthorized and amended its programs several times. The Patient Protection and Affordable Care Act of 2010 (ACA; P.L. 111-148) permanently reauthorized the NHSC.
Legislation to potentially repeal or replace all or parts of the ACA, depending on its scope, may impact NHSC authorization and funding. In 2010, Congress implemented major revisions in the NHSC through the ACA. Most notably, the ACA permanently authorized the NHSC and created the Community Health Center Fund (CHCF), a source of mandatory funding for the NHSC from FY2011 through FY2015. This funding was subsequently extended in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA, P.L. 114-10). MACRA provided $310 million to support the NHSC in FY2016 and FY2017 through the CHCF. MACRA is the sole source of NHSC funds in FY2017. (Because this fund is subject to the mandatory spending sequester, the FY2017 funding level is $289 million.) In addition, the ACA amended statutory authorities pertaining to the NHSC's requirements for 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 federally designated HPSAs.
In FY2015, the most recent annual data available, the NHSC awarded 2,934 new loan repayment agreements; 1,841 continuing loan repayment agreements; 96 student-to-service loan repayments; 620 state loan repayments; 196 new scholarships; and 11 continuing scholarships. In FY2014, the NHSC issued the largest number of awards, 5,620, in a single year. Mental health providers, physicians, and nurse practitioners represented the largest number of NHSC clinicians in recent years. Also, in recent years, congressional appropriators have expressed concerns about updating the methodology for designating areas where NHSC providers are placed, and interest in the possibility of authorizing pharmacists as NHSC clinicians. The 21st Century Cures Act (P.L. 114-255) expanded the list of NHSC providers to include child and adolescent psychiatrists. This report summarizes the NHSC's recruitment and retention programs, and the NHSC's funding trends from FY2010 through FY2017.

subsections: section_title: Introduction
paragraphs: The National Health Service Corps (NHSC) is a clinician recruitment and retention program that Congress created to reduce health workforce shortages in locations where providers historically have not served or have not served in numbers sufficient to address the needs of the local population. The NHSC consists of federal and state programs that recruit qualified individuals who agree to serve at approved facilities located in federally designated health professional shortage areas (HPSAs) for a minimum of two years. The federal program awards scholarships to, and makes loan repayment agreements with, individuals; the state programs make loan repayment agreements, only, to individuals. All NHSC scholars and loan repayers (federal and state) must agree to serve for a minimum of two years at an NHSC-approved facility that is located in a HPSA.
The federal portion of the NHSC program awards scholarships to individuals studying in (1) a qualified academic program that leads to a degree in medicine (allopathic or osteopathic) or a degree in dentistry, or (2) a qualified program that trains physician assistants, nurse-midwives, or nurse practitioners. Further, NHSC makes loan repayment agreements with eligible providers who may be dental hygienists and mental and behavioral/mental health (BMH) providers, in addition to the aforementioned list of professionals who are scholarship-eligible. In December 2016 Congress passed legislation to clarify that child and adolescent psychiatrists are eligible providers for the NHSC loan repayment program.
The state portion of the NHSC's loan repayment program may support all providers who are eligible to participate in the federal scholarship and loan repayment programs, and each state may choose to expand the list of eligible providers to include those who are trained in other disciplines (such as pharmacy or optometry). 
The NHSC's programs are managed within the Bureau of Health Workforce (BHW) in the Health Resources and Service Administration (HRSA), an agency in the Department of Health and Human Services (HHS). The NHSC was created in the Emergency Health Personnel Act of 1970 to provide an adequate supply of trained health providers in federally designated HPSAs. Throughout its four decades of existence, legislators have authorized and revised the program several times, with the most recent authorization in the Patient Protection and Affordable Care Act (ACA). In 2010, Congress permanently authorized the NHSC in the ACA. In addition, the ACA
established the Community Health Center Fund (CHCF), which authorized mandatory appropriations for the NHSC (and the Federal Health Centers Program) from FY2011 through FY2017; required the Secretary of HHS to redefine how HPSAs and Medically Underserved Areas/Populations are designated; implemented a part-time option from which NHSC clinicians (or providers) may choose to fulfill their service commitments; authorized a policy that excludes from taxed income the money that an individual receives from NHSC and similar loan repayment and scholarship programs that are designed to increase health care access in HPSAs or other designated underserved areas; and authorized a policy that permits NHSC clinicians to count time spent teaching at teaching health centers toward the fulfillment of their NHSC service commitment.
In addition to this background, this report provides funding trends from FY2011 through FY2017, and a summary of the programs for the NHSC.
section_title: Funding
paragraphs: Until FY2009, and dating back to its inception in 1972, annual discretionary appropriations were the sole funding source for the NHSC. Now the opposite is true, with mandatory funding accounting for all (through FY2017) funding for NHSC. The ACA created the CHCF and provided mandatory funding for it over a five-year period (FY2011-FY2015). The act also directed the transfer of $11 billion total from the CHCF over that period to support the NHSC and federal health center programs; the NHSC received various amounts beginning in FY2011. For FY2016 and FY2017, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA, P.L. 114-10 ) extended the CHCF funding for the NHSC funding transfers, as shown in Table 1 . The FY2017 NHSC funding level is $288.6 million for this program, following a mandatory spending sequester for FY2017 of 6.9% (pursuant to the Balanced Budget and Emergency Deficit Control Act of 1985, as amended).
From FY2012 through FY2016, the CHCF was the sole funding source for the NHSC, as no discretionary funds were appropriated to this program during this period. In each of FY2013 through FY2015, these mandatory funds were subject to the mandatory spending sequestration that was required by the Balanced Budget and Emergency Deficit Control Act of 1985, as amended.
In FY2015, when authority for NHSC funding through the CHCF expired, this authority was extended through the enactment of MACRA on April 16, 2015. MACRA extended the mandatory funding for the CHCF and authorized a transfer of funds to the NHSC in the amount of $310 million for each of FY2016 and FY2017. However, because this funding extension was enacted after the mandatory spending sequester for FY2016 was calculated by OMB, the FY2016 funding for the NHSC was not included in OMB's sequester calculation, and thus no sequester was ordered. The final FY2016 funding for the NHSC was $310 million, whereas the final FY2017 funding level is estimated to be $288.6 million due to the 6.9% mandatory sequester for FY2017.
section_title: Recruitment and Retention Programs
paragraphs: Various sections in Title III of the Public Health Service Act (PHS Act) authorize clinician recruitment and retention programs as part of the NHSC. NHSC participants must agree to a period of service in a federally designated HPSA in exchange for scholarships and/or loan repayment. If NHSC scholars and loan repayers are in good standing and eligible for additional awards, they may receive continuation awards, thereby extending the clinician's length of service in a HPSA. 
The NHSC supports programs at the federal and state levels. The federal program supports loan repayments and scholarships, with the loan repayment program making the majority of all federal awards. States participating in the NHSC receive federal funding in the form of matching funds. Nearly all NHSC programs offer continuation agreements to qualified individuals, with the objective of increasing the NHSC clinician field strength and length of time served in a HPSA. Each state has the authority to make awards for loan repayments according to its needs, but in a manner that is consistent with federal regulation. 
subsections: section_title: Federal Scholarship Program
paragraphs: PHSA Section 338A establishes the NHSC Scholarship Program, which recruits students who are enrolled in medical school, physician assistant programs, dental school, or advance practice nursing school. Qualified students may receive financial support through scholarships, which include tuition, reasonable education expenses, and a monthly living stipend. They must be enrolled in a fully accredited training program, and may receive up to four years of benefits in exchange for a service commitment. With each full year (or partial year) of support after the first year, the student must agree to provide an additional year of service in a HPSA. For example, if a full-time service a scholar receives three years of scholarship support the scholar would owe three years of full-time service at an approved facility. The number of school years of NHSC scholarship support received by the scholar may not exceed four school years.
section_title: Federal Loan Repayment Program
paragraphs: PHSA Sections 338B and 331(i) establish the Federal Loan Repayment Program, which is designed to recruit licensed professionals, including physicians, physician assistants, dentists, dental hygienists, advanced practice nurses, and behavioral/mental health workers. These professionals must be employed or have accepted an offer to be employed at an NHSC-approved work site. Federal loan repayers have a choice of service options based on full- or part-time service.
For full-time service, a loan repayer may receive amounts up to $50,000 for an initial two-year obligation, when serving at an NHSC-approved site with a HPSA score of 14 or above. Also, for full-time service, a loan repayer who serves at an NHSC service site with a HPSA score of 13 or lower is eligible to receive up to $30,000 for an initial two years of service. 
section_title: Federal Students to Service (S2S) Loan Repayment Program
paragraphs: PHSA Section 338B establishes authority for the Secretary of HHS to create the Students to Service (S2S) Loan Repayment Program, which began in 2012. The S2S program provides assistance of up to $120,000 to medical students (allopathic and osteopathic) in their final year of medical school. In return for the loan repayment, the S2S loan repayer must complete an approved primary care residency in a HPSA of the greatest need for at least three years (full-time option) or six years (half-time option). Instead of completing a primary care residency, the S2S loan repayer may complete post-graduate training as an intern or geriatrics fellow in an approved specialty for a period of one year. 
section_title: State Loan Repayment Program
paragraphs: PHSA Section 338I authorizes the State Loan Repayment Program. The State Loan Repayment Program is similar to the Federal Loan Repayment Program, except that (1) it is a matching grant between the state and the NHSC, and (2) states may choose to expand or contract the number of clinicians (or providers) in their program. States have the option of addressing their unique workforce needs by choosing from additional types of professionals, such as registered nurses and pharmacists (who are ineligible to participate in the federal loan repayment program). Federal statute, regulation, and a program document provide additional guidance for clinician selection in the State Loan Repayment Program.
section_title: Special Loans for Former Corps Members to Enter Private Practice
paragraphs: PHSA Section 338G establishes an additional option for NHSC participants. This provision authorizes the Secretary to make a single loan to an NHSC member on the condition that the member must serve as a full-time private practice provider in a HPSA for a minimum of two years, in exchange for a loan in amounts up to $25,000. This option has never been implemented.
section_title: Trends in Recruitment
paragraphs: From FY2011 through FY2016, the most recent data, the NHSC offered an estimated 27,000 loan repayment agreements and scholarship awards to individuals who have agreed to serve for a minimum of two years in a HPSA. The following is a summary of those awards: 
23,854 federal loan repayment agreements (new and continuing), 1,084 scholarship awards (new and continuing), 322 students to service agreements (new only), and 2,206 state loan repayment awards (defined by each state).
The NHSC awarded an estimated 15,303 new federal loan repayments from FY2011 through FY2016, averaging 3,061 new federal loan repayments annually. A significant increase in new federal loan repayments was awarded in FY2011, when the NHSC awarded 4,113 new federal loan repayments, the largest number of new loan repayments issued in a single year during FY2011-FY2015. This increase was made possible by a larger program appropriation in FY2011. Table 2 shows NHSC clinician recruitment activity for the NHSC's active programs, by type of award, from FY2011 through FY2016 (the FY2017 operating budget is not yet available). 
section_title: Trends in Field Strength and Composition
paragraphs: NHSC recruits, who remain committed to serve in a HPSA, eventually become the providers that make up its field strength. Field strength is the number of NHSC providers who are fulfilling a service obligation in a HPSA in exchange for a scholarship or loan repayment agreement. In FY2015, the most recent data available, total NHSC field strength was 9,683, which enabled NHSC providers to serve an estimated 10.2 million individuals in HPSAs. Changes in the size of the NHSC's field strength are shaped by appropriation levels. For example, increases in funding from FY2010 to FY2011 resulted in a 36% increase in field strength, from 7,530 to 10,279. 
As the NHSC's field strength size has increased or decreased, the number of individuals served by NHSC providers has been affected. For example, in FY2011, when the NHSC appropriation peaked at $315 million, NHSC providers served 10.5 million individuals, compared with 9.3 million individuals in FY2013 and 10.2 million individuals in FY2015 (see Figure 1 ). 
The NHSC's workforce composition consists of an increasingly diverse set of health professionals representing mental and behavioral health, medical, nursing, dental and other disciplines. Since FY2010, behavioral/mental health providers are the largest group of providers making up the NHSC's field strength. Physicians and nurse practitioners are the next largest group of providers constituting NHSC field strength. Over time, Congress has requested that the Secretary of HHS consider adding other disciplines to the NHSC. In FY2015, Congress recognized the Secretary's authority to add other disciplines to the NHSC, and urged the Secretary to include pharmacists as eligible to participate in NHSC loan repayment and scholarship programs. In FY2012, the Secretary of HHS expanded eligibility for the NHSC State Loan Repayment Program (SLRP) to include pharmacists.
In FY2015, the most recent year for which complete data are available, the following three professional groups made up 73% of the NHSC:
30% are mental and behavioral health providers, 24% are allopathic and osteopathic physicians, and 21% are nurse practitioners (including nurse midwives).
The composition of the NHSC workforce continues to be a subject of debate. In FY2009, physicians accounted for nearly 35% of providers and were the largest group of providers in the NHSC. Some argue for diversification of the NHSC workforce, arguing that many rural populations have little or no access to different types of providers, while opponents argue that the NHSC mission might be spread too thin if too many specialists were added to the program. In December 2016, child and adolescent psychiatrists were the newest group of professionals to be added to the list of NHSC-eligible providers for the loan repayment program. Figure 2 shows the NHSC's workforce by provider type in FY2015, the most recent year for which complete data are obtained.