Many foreign physicians who enter U.S. graduate medical education programs do so as participants in the Department of State’s Exchange Visitor Program—an educational and cultural exchange program aimed at increasing mutual understanding between the peoples of the United States and other countries. Participants in the Exchange Visitor Program enter the United States with J-1 visas. Nearly 6,200 foreign physicians with J-1 visas took part in U.S. graduate medical education programs during academic year 2004–05. Physicians participating in graduate medical education on J-1 visas are required to return to their home country or country of last legal residence for at least 2 years before they may apply for an immigrant visa, permanent residence, or certain nonimmigrant work visas. They may, however, obtain a waiver of this requirement from the Department of Homeland Security at the request of a state or federal agency if they have agreed to practice in an underserved area for at least 3 years. States were first authorized to request J-1 visa waivers on behalf of foreign physicians in October 1994. Federal agencies were first authorized to request J-1 visa waivers for physicians in graduate medical education in September 1961. In general, waiver physicians must practice in areas that HHS has designated as underserved. HHS has specified that waiver physicians may practice in HPSAs or medically underserved areas or populations (MUA/P). HPSAs are geographic areas, population groups within areas, or facilities that HHS has designated as having a shortage of health professionals; HPSAs for primary care are generally identified on the basis of the ratio of population to primary care physicians and other factors. MUA/Ps are areas or populations that HHS has designated as having shortages of health care services; these are identified using several factors in addition to the ratio of population to primary care physicians. HPSAs and MUA/Ps can overlap; as a result, a facility can be located in both a HPSA and an MUA/P. States and federal agencies have some discretion in shaping their J-1 visa waiver programs to address particular needs or priorities. For example, while states and federal agencies can request waivers for physicians to work in both primary care and nonprimary care specialties and in a variety of practice settings, they may choose to limit the number of waivers they request for physicians to practice nonprimary care or require that waiver physicians work in certain practice settings. States and federal agencies may also choose to conduct monitoring activities to help ensure that physicians are meeting their waiver agreements—for example, that they are working at the facilities for which their waivers were granted. Although states and federal agencies are generally subject to the same statutory provisions regarding requests for J-1 visa waivers for physicians, there are two notable distinctions. First, states are limited in the number of waivers that may be granted in response to their requests each year. Initially, states were authorized to request waivers for up to 20 physicians each fiscal year; in 2002, the limit was increased to 30 waivers per state per year. Federal agencies are not statutorily limited in the number of waivers that may be granted in response to their requests each year. Second, while federal agencies’ waiver requests must be for physicians to practice in underserved areas, Congress gave states the flexibility, in December 2004, to use up to 5 of their 30 waiver allotments each year for physicians to work in facilities located outside of HHS-designated undeserved areas, provided that the facilities treat patients who reside in underserved areas. We refer to these waivers as “flexible waivers.” Obtaining a J-1 visa waiver at the request of a state or federal agency to practice in an underserved area involves multiple steps (see fig. 1). A physician must submit an application to obtain a case number from the Department of State and must secure a bona fide offer of employment from a health care facility that is located in an underserved area or, in the case of flexible waivers, from a health care facility that treats residents of an underserved area. The physician, the prospective employer, or both apply to a state or federal agency to request a waiver on the physician’s behalf. If, after reviewing the application, the state or federal agency decides to request a waiver, the state or federal agency submits a letter of request to the Department of State affirming that it is in the public interest for the physician to remain in the United States. If the Department of State decides to recommend the waiver, it forwards its recommendation to the Department of Homeland Security’s U.S. Citizenship and Immigration Services (USCIS). USCIS is responsible for making the final determination and notifying the physician when the waiver is granted. According to officials involved in recommending and approving waivers at the Department of State and USCIS, after a review for compliance with statutory requirements and security issues, nearly all waiver requests are recommended and granted. Once the physician is granted the waiver, the employer petitions USCIS for the physician to obtain H-1B status (a nonimmigrant classification used by foreign nationals employed temporarily in a specialty occupation). The physician must work at the facility specified in the waiver application for a minimum of 3 years, unless the physician obtains approval from USCIS to transfer to another facility. USCIS considers transfer requests only in extenuating circumstances, such as closure of the physician’s assigned facility. Once the physician fulfills the employment contract, the physician may apply for permanent residence, continued H-1B status, or other nonimmigrant status, if the physician wishes to remain in the United States. No single federal agency is responsible for managing or tracking the use of J-1 visa waivers for physicians to practice in underserved areas. HHS is the primary federal agency responsible for addressing physician shortages, both in terms of administering NHSC programs that place physicians and other providers in areas experiencing shortages of health professionals and in designating areas as underserved. HHS’s oversight of waiver physicians practicing in underserved areas, however, has generally been limited to the few physicians for whom it has requested J-1 visa waivers. USCIS and the Department of State process J-1 visa waiver requests but do not maintain comprehensive information about waiver physicians’ numbers, practice locations, and practice specialties. States and federal agencies that request waivers maintain such information for the physicians for whom they request waivers, but this information is not centrally collected and maintained by any federal agency. Although the use of J-1 visa waivers has not been systematically tracked, available data indicate that the pool of physicians who could seek waivers—that is, the number of foreign physicians in graduate medical education with J-1 visas—has declined in recent years. In academic year 1996–97, a little more than 11,600 foreign physicians took part in U.S. graduate medical education programs with J-1 visas; by academic year 2004–05 this number had decreased more than 45 percent to slightly less than 6,200. The reasons for this decrease are not completely understood. States and federal agencies reported requesting more than 1,000 J-1 visa waivers in each of fiscal years 2003 through 2005 (see fig. 2). We estimated that, at the end of fiscal year 2005, there were roughly one and a half times as many waiver physicians practicing in underserved areas (3,128) as U.S. physicians practicing in underserved areas through NHSC programs (2,054). In contrast to our findings a decade ago, states have become the primary source of waiver requests for physicians to practice in underserved areas, accounting for 90 percent or more of requests in each of fiscal years 2003 through 2005. The number of states that reported ever having requested a J-1 visa waiver has grown steadily since they were first authorized to do so, from 20 states in fiscal year 1995 to 53 states (all but Puerto Rico) as of fiscal year 2005. States varied, however, in the number of waivers they requested in fiscal years 2003 through 2005. For example, in fiscal year 2005, about one-quarter of the 54 states requested the maximum of 30 waivers, about one-quarter requested 10 or fewer, and two (Puerto Rico and the U.S. Virgin Islands) requested no waivers (see fig. 3). The number of waivers requested by federal agencies has decreased significantly since 1995, with the exit of the two agencies that requested the most waivers for physicians to practice in underserved areas that year. The Department of Agriculture, which stopped requesting waivers for physicians to practice in underserved areas in 2002, and the Department of Housing and Urban Development, which stopped in 1996, together requested more than 1,100 waivers for physicians to practice in 47 states in 1995, providing a significant source of physicians for some states. Federal agencies accounted for about 94 percent of waiver requests that year, in contrast to fiscal year 2005, when federal agencies made about 6 percent of requests. Of the 1,012 waivers requested by states and federal agencies in fiscal year 2005, ARC, DRA, and HHS accounted for 56 requests for physicians to practice in 14 states. States and federal agencies requested waivers for physicians to practice a variety of specialties, with states requesting waivers for physicians to practice both primary and nonprimary care and federal agencies generally focusing on primary care. Although the waivers states and federal agencies requested were for physicians to work in diverse practice settings, most were for physicians to work in hospitals and private practices. These practice settings were about equally divided between rural and nonrural areas. Additionally, less than half of the states opted to request flexible waivers for physicians to work outside of designated underserved areas. Overall, a little less than half (46 percent) of the waivers requested by states and federal agencies in fiscal year 2005 were for physicians to practice exclusively primary care, while a slightly smaller proportion (39 percent) were for physicians to practice exclusively nonprimary care (see fig. 4).