TESTIMONY OF BRYAN B. MITCHELL ACTING DEPUTY INSPECTOR GENERAL DEPARTMENT OF HEALTH AND HUMAN SERVICES BEFORE THE SUBCOMMITTEE ON ENERGY, NUCLEAR COMMITTEE ON GOVERNMENTAL AFFAIRS ON COLLECTIONS UNDER THE NATIONAL HEALTH SERVICE CORPS SCHOLARSHIP PROGRAM APRIL 12, 1984 Good morning, I am Bryan Mitchell, Deputy Inspector General, Department of Health and Human Services. I am pleased to appear before you today to discuss some preliminary findings of our puter assisted analysis of the National Health Service Corps (NHSC) scholarships delinquencies. This is not our first appearance before you on an issue relating to debt collection. As you know, we have worked very closely in the past with your staff on various aspects of the debt collection problem associated with federal programs, and will continue to do so in the future. Your leadership in this area has been extremely instrumental in introducing legislation and initiatives which have helped to reduce delinquencies, increase collections and lessen the interest burden for federal financing We had already begun a review of this program as part of our on-going PHS loan-scholarship review activities. However, at you request, we undertook several computer assisted matches to determine and identify which of the defaulting doctors and dentists are receiving Medicare and Medicaid payments. The NHSC, initially authorized in 1970, was designed to meet the health care needs of persons usually located in rural areas where there was a serious shortage of primary health care professionals. By training physicians and dentists and placing them in areas of health manpower shortages, the objectives of this program can be met. The scholarships offered the professional formal education in exchange for their commitment to service an area of need for a minimum of two years. Persons awarded such scholarships and who fail to perform their tour of duty, are given up to three years to repay their scholarships, plus penalties or otherwise, become delinquent. According to figures provided our auditing staff by the Public Health Service (PHS) on the NHSC program, 1,813 scholars have breached their scholarship agreements, as of December, 1983. of this number, 426 have made no payment on their debt. 254 of these delinquents are health care providers, doctors and dentists, who are in a position to claim Medicare/Medicaid service reimbursement. Our work, to date, has primarily focused on identifying defaulters who were receiving Medicare and Medicaid reimbursement. In the National Health Service Corps Scholarship program, we compared the list of defaulting scholars based on a last known address, as provided by PHS, against the State Medicaid providers listings in 45 states and the Medicare carriers providers listings. We also matched the same information against a listing of all Departmentally employed persons. Our review provided some interesting preliminary findings. None of the defaulting students are employeed by PHS or the Department, a marked improvement compared to findings two years ago with respect to the HPSL and NSL programs. However, of the 254 unaudited health providers we have identified, tentatively, 63 defaulters are recipients of approximately $2.8 million in Medicare or Medicaid reimbursements. Their present indebtedness however, amounts to $1.9 million. It should be noted that the $2.8 million in payments identified by us could be substantially higher since many doctors receiving Medicare and Medicaid payments are associated with group practices. In these cases Medicare and Medicaid records do not identify specific payments made to individual doctors. I must stress that these are very preliminary findings, but if verified, it shows again that physicians with high incomes have not been attentive in paying off their debts. For example, a physician who failed to fulfill his scholarship obligation received $102,000 in Medicaid payments. He broke his scholarship contract in January, 1981. At present, he is not making payments and still owes PHS $50,000 in principal. I have attached for your information, a list of the ten defaulter who are highest receipents of Medicare and Medicaid payments. In undertaking this match, we have also uncovered a few cases where the health care provider was also in default on HEAL loan in addition to his scholarship indebteness. For instance, -3 a doctor who had received 15,500 from the HEAL program in 1979, was found to owe the NHSC scholarship program $81,273 in principal. The debtor breeched his NHSC agreement. He has also defaulted on his HEAL loan. On January 3, 1984, PHS paid off He is the HEAL loan plus interest, an amount totalling $25,415. still in default of his NHSC scholarship. We also made a limited review of 21 of the 266 doctors and dentists who PHS reports are presently making payments in lieu of fulfilling their scholarship requirements. These persons are not delinquent. However, the preliminary review indicates that: For example, we have found a case of a doctor in Texas who used his resources to acquire assets and significantly increased his net worth before liquidating his debt. While payments have been made since October 1981, they did not start until three years after contract breach. The debt at that time was approximately $35,000. The amount currently due is $42,871 |