J-1 visas allow foreign nationals to participate as exchange visitors in cultural and educational programs in the United States. USIA is responsible for managing the J-1 visa program and designates organizations as program sponsors. In 1995, over 9,000 foreign physicians with J-1 visas were in the United States for graduate medical education or training. These exchange visitors constituted about one-tenth of all individuals receiving graduate medical education (see app. II). Because many exchange visitors are in the United States for several years for graduate medical education and training, each year a few thousand new physicians receive J-1 visas and enter the United States to begin graduate medical education and training while a few thousand complete their training. To ensure that the J-1 visa program works as intended in passing learning and experience to other countries, the Congress has imposed restrictions on J-1 visa holders, including physicians in graduate medical education. These physicians are required to return to their home country (or to their country of last legal residence) for at least 2 years after completion of training. However, they may obtain a waiver of this requirement and remain in the United States. For most physicians, the waivers are requested on their behalf by a federal agency or by a state agency or department that is responsible for public health issues. These federal agencies and states generally request waivers of the 2-year foreign residence requirement so that the physicians can practice for several years in underserved areas (see table 1). The federal agencies and states submit these requests to USIA. USIA reviews the program, policy, and foreign relations aspects of the case and forwards its recommendations to the INS Commissioner. For waiver requests made by interested U.S. government agencies or states, INS may only grant the waiver if USIA submits a favorable recommendation. Figure 1 illustrates the waiver process. While HHS is the federal agency responsible for addressing physician shortages it does not use waivers to do so. HHS endorses the philosophy that exchange visitors return home after completing their training to make their new knowledge and skills available to their home countries. As a result, HHS does not support waivers for physicians to remain in the United States to practice in underserved areas. Instead, HHS administers other federal programs, such as NHSC, to address physician shortages in the United States. NHSC supplies physicians and other health professionals to underserved areas primarily by (1) awarding scholarships to students who agree to serve in a shortage area after their health professions training is complete and (2) repaying a set amount of educational loan debt for each year of service in a shortage area. On December 31, 1995, 848 NHSC physicians and 685 other NHSC professionals who received scholarships or federal loan repayment were practicing in underserved areas of the country. In addition to NHSC, HHS has other programs to address medical underservice. For example, HHS provides federal grant funding to community health centers that are required to accept all patients regardless of their ability to pay. Begun as an exceptions policy, the number of physicians receiving waivers of the 2-year foreign residence requirement for J-1 exchange visitors has grown more than tenfold in the past 5 years. Several factors have contributed to the increase: more hospitals and other facilities have found the waiver to be a means to fill their empty positions; more agencies and states are making requests; and physicians are actively seeking waivers, in some cases allegedly paying recruiters and immigration attorneys to find them a position. Waiver physicians are practicing in virtually every state; most are primary care physicians. The number of waivers being processed for physicians to practice in underserved areas each year has grown from 70 in 1990, to 1,374 in 1995 (see fig. 2). In 1995, the number of waivers being processed for physicians was greater than the number of NHSC physicians (1,267) practicing in underserved areas, and it was enough to offset about 27 percent of the total physician shortage identified by HHS. Indications are that in 1995, about half of the foreign physicians that were supposed to return home were granted waivers of this requirement to practice in an underserved area in the United States. Why do facilities want to employ foreign physicians through the use of the waivers? In responding to our survey and during our visits to health centers, physician offices, clinics, and other health care facilities where these physicians were practicing, many officials said that their facilities had turned to these physicians because they were unable to recruit U.S. physicians. For example, the administrator of a county public health unit in Florida commented that most U.S. physicians are not willing to work in rural areas, but she has found many physicians with J-1 visas who had excellent references and credentials and who were willing to practice there. She said it would be a “travesty” to health care in rural areas if these waiver physicians were not available. Other reasons cited for hiring these physicians are their superior foreign language skills and cultural familiarity with a facility’s patient population. For example, several physicians received waivers to practice at a migrant health center in Eastern Washington. These physicians were recruited, in part, because they are native Spanish speakers, which enables them to effectively treat the center’s Spanish-speaking patients. The sudden increase in the number of waivers being processed in 1994 and 1995 probably reflects the fact that facilities had additional places to turn to for requesting the waivers. By 1995, four U.S. government agencies and 23 states were requesting waivers of J-1 visa requirements for physicians. Before 1993, the only agency requesting waivers for a number of physicians to practice in underserved areas was ARC. ARC began requesting waivers in the 1980s for physicians to practice in Appalachia. However, ARC requested around 200 or fewer waivers per year, peaking at 266 waivers in 1993. In addition to ARC, since 1993 the Department of Transportation (DOT) has requested waivers for a handful of physicians to practice in one rural area where the U.S. Coast Guard operates. The rapid growth in waivers began in late 1993 and 1994, when the U.S. Departments of Agriculture (USDA) and Housing and Urban Development (HUD) began requesting them for physicians to serve their rural and urban constituents. Senior officials at both agencies said that they initially responded to a constituent request to support a specific physician; however, their offices were subsequently flooded with requests for waivers for other physicians. Agency officials said that they would like to limit the number of waivers processed by their agencies, but have not found a way of effectively restricting them. The number of waivers also increased because the authority for states to request waivers was passed in 1994, and 23 states requested waivers in calendar year 1995. As a result of the entry of these federal agencies and states, physicians seeking waivers were no longer limited to practice locations in Appalachia and areas serving DOT personnel; instead, they could practice in rural and urban areas across the country. However, HUD officials have recently decided to reassess the department’s waiver policy and stopped accepting requests after August 30, 1996, to conduct a review. Table 2 shows the number of waiver requests submitted to USIA by each agency in 1995 and the reason for the requests. For information on the number of waivers requested by each agency since 1990, see appendix V. Another factor in the increase in waivers may be the interest among physicians with J-1 visas themselves. Health care facility officials, as well as state and federal health officials, said that they have been inundated with inquiries from physicians who would like to obtain a waiver by working in a shortage area. In addition, officials at several facilities said that they were contacted by professional recruiters or immigration attorneys regarding the availability of a physician to meet their facility’s needs if the physician could obtain a waiver. Some facility officials and physicians reported paying up to $25,000 in immigration attorney or recruiter fees for assistance in matching a physician with a facility and processing the waiver. During our site visits to facilities where physicians who had received waivers were practicing, physicians cited several reasons why they wanted waivers, including that (1) they would not be able to apply the medical skills they had learned in the United States in their home countries, (2) they were concerned about violence in their home countries, (3) they wanted to serve in an underserved area, (4) their families and relatives were in the United States, and (5) they had a general desire to stay in the United States. In 1996, waiver physicians were practicing in 49 states and the District of Columbia—every state except Alaska. However, the degree to which they are relied on to relieve physician shortages varies greatly from state to state. To measure the extent of this reliance, we compared the number of waivers granted or in process in 1994 and 1995 with the number of physicians identified by HHS as needed to remove the shortage area designations in a state. In five states (Alabama, Kansas, Kentucky, North Dakota, and West Virginia), the number of physicians for whom waivers were processed equaled more than 75 percent of the number of physicians needed to remove these designations in the state. In other states, such as California, such physicians equal less than 10 percent of the identified need. Physicians with waivers are practicing in a variety of settings. Our survey results show that more than one-third of physicians who received their waivers through federal agencies are practicing in nonprofit community or migrant health centers and about one-fourth are in a private or group practice. The rest are practicing in hospitals, for-profit health centers, or other settings (see fig. 3). See appendix VI for more detailed information on the results of our survey of facilities. Using our survey results, we estimate that almost all physicians practicing on January 1, 1996, whose waivers were processed through federal agencies were practicing in primary care specialties.