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. More than 6,100 foreign physicians with J-1 visas took part in U.S. graduate medical education programs during academic year 2004–05. This number was about 40 percent lower than a decade earlier, when about 10,700 foreign physicians with J-1 visas were in U.S. graduate medical education programs. 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 the physician has agreed to practice in, or work at a facility that treats residents of, 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. Initially, states were authorized to request waivers for up to 20 physicians each fiscal year; in 2002, the annual limit was increased to 30 waivers per state. Physicians who receive waivers may work in various practice settings, including federally funded health centers and private hospitals, and they may practice both primary care and nonprimary care specialties. States and federal agencies may impose additional limitations on their programs beyond federal statutory requirements, such as limiting the number of requests they will make for physicians to practice nonprimary care specialties. Obtaining a J-1 visa waiver through a state request involves multiple steps. A physician must first secure a bona fide offer of employment from a health care facility that is located in, or that treats residents of, an underserved area. The physician, the prospective employer, or both then submit an application to a state to request the waiver. The state submits a request for the waiver to the Department of State. If the Department of State recommends 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 a waiver is granted. According to officials involved in recommending and approving waivers at the Department of State and USCIS, after review for compliance with statutory requirements and security issues, nearly all states’ waiver requests are recommended and approved. Once physicians are granted waivers, they must work at the site specified in their waiver applications for a minimum of 3 years. During this period, although states do not have explicit responsibility for monitoring physicians’ compliance with the terms and conditions of their waivers, states may conduct monitoring activities at their own initiative. For purposes of J-1 visa waivers, HHS has specified two types of underserved areas in which waiver physicians may practice: health professional shortage areas (HPSAs) and medically underserved areas and populations (MUA/Ps). In general, HPSAs are areas, population groups within areas, or facilities that HHS has designated as having a shortage of primary care health professionals and are identified on the basis of, among other factors, the ratio of population to primary care physicians. MUA/Ps are areas or populations that HHS has designated as having shortages of health care services and are identified using several factors in addition to the availability of primary care providers. In 2004, Congress gave states the flexibility to use up to 5 of their 30 waiver allotments each year— which we call “flexible waivers”—for physicians to work in facilities that serve patients who reside in a HPSA or MUA/P, regardless of the facilities’ location. No one federal agency is responsible for managing or tracking states’ and federal agencies’ use of J-1 visa waivers to place physicians in underserved areas. Further, no comprehensive data are available on the total number of waivers granted for physicians to practice in underserved areas. HHS’s Health Resources and Services Administration is the primary federal agency responsible for improving access to health care services, both in terms of designating underserved areas and in administering programs— such as the NHSC programs—to place physicians and other providers in them. However, HHS’s oversight of waiver physicians practicing in underserved areas has generally been limited to those physicians for whom HHS has requested J-1 visa waivers. J-1 visa waivers continue to be a major means of supplying physicians to underserved areas in the United States, with states and federal agencies reporting that they requested more than 1,000 waivers in each of fiscal years 2003 through 2005. We estimated that, at the end of fiscal year 2005, the number of physicians practicing in underserved areas through the use of J-1 visa waivers was roughly one and a half times the number practicing there through NHSC programs. In contrast to our findings a decade ago, states are now the primary source of waiver requests for physicians to practice in underserved areas. In fiscal year 2005, more than 90 percent of the waiver requests for physicians were initiated by the states, compared with fewer than 10 percent in 1995. (See fig. 1.) Every state except Puerto Rico and the U.S. Virgin Islands reported requesting waivers for physicians in fiscal year 2005, for a total of 956 waiver requests. In 1995—the first full year that states had authority to request waivers—nearly half of the states made a total of 89 waiver requests. During the past decade, the two federal agencies that requested the most waivers for physicians to practice in underserved areas in 1995—the Department of Agriculture and the Department of Housing and Urban Development—have discontinued their programs. These federal agencies together requested more than 1,100 waivers for physicians to practice in 47 states in 1995, providing a significant source of waiver physicians for some states. For example, these federal agencies requested a total of 149 waivers for physicians to practice in Texas, 134 for New York, and 105 for Illinois in 1995. In fiscal year 2005, the three federal agencies that requested waivers for physicians to practice in underserved areas—the Appalachian Regional Commission, the Delta Regional Authority, and HHS—requested a total of 56 waivers for physicians to practice in 15 states. With diminished federal participation, states now obtain waiver physicians primarily through the 30 waivers they are allotted each year. The number of waivers states actually requested, however, varied considerably among the states in fiscal years 2003 through 2005. For example, in fiscal year 2005, about one-quarter of the states requested the maximum of 30 waivers, while slightly more than a quarter requested 10 or fewer (see fig. 2). Collectively, the 54 states requested 956 waivers, or roughly 60 percent of the maximum of 1,620 waivers that could have been granted at their request. Of the waivers states requested in fiscal year 2005, about 44 percent were for physicians to practice exclusively primary care, while about 41 percent were for physicians to practice exclusively in nonprimary care specialties, such as anesthesiology or cardiology. An additional 7 percent were for physicians to practice psychiatry. A small proportion of requests (5 percent) were for physicians to practice both primary and nonprimary care—for example, for individual physicians who practice both internal medicine and cardiology (see fig. 3). More than 90 percent of the states that requested waivers in fiscal year 2005 reported that, under their policies in place that year, nonprimary care physicians were eligible to apply for waiver requests. Some of these states limited these requests. For example, some states restricted the number of hours a physician could practice in a nonprimary care specialty. Further, two states reported that they accepted applications from, and requested waivers for, primary care physicians only. Regarding practice settings, more than three-fourths of the waivers requested by states in fiscal year 2005 were for physicians to practice in hospitals and private practices, including group practices. In addition, 16 percent were for physicians to practice in federally qualified health centers—facilities that provide primary care services in underserved areas—or rural health clinics—facilities that provide outpatient primary care services in rural areas (see fig. 4). More than 80 percent of the states requesting waivers in fiscal year 2005 reported requiring facilities where the physicians worked—regardless of practice setting—to accept some patients who were uninsured or covered by Medicaid. Although states do not have explicit responsibility for monitoring physicians’ compliance with the terms and conditions of their waivers, in fiscal year 2005, more than 85 percent of the states reported conducting at least one monitoring activity. The most common activity—reported by 40 states—was to require periodic reports by the physician or the employer (see table 1). Some states required these reports to specify the number of hours the physician worked or the types of patients—for example, whether they were uninsured—whom the physician treated. Not all states that requested waivers conducted monitoring activities. Six states, which collectively accounted for about 13 percent of all state waiver requests in fiscal year 2005, reported that they conducted no monitoring activities in that year. The majority of the states reported that the annual limit of 30 waivers per state was at least adequate to meet their needs for J-1 visa waiver physicians. When asked about their needs for additional waiver physicians, however, 11 states reported needing more. Furthermore, of the 44 states that did not request their 30-waiver limit in each of fiscal years 2003 through 2005, more than half were willing, at least under certain circumstances, to have their unused waiver allotments redistributed to other states in a given year. Such redistribution would require legislation.