Medical residency loan program advanced

A bill that would create a loan repayment program for medical residents advanced from general file May 13.

LB196, introduced by Lincoln Sen. Kathy Campbell, would amend the Rural Health Systems and Professional Incentive Act by creating a resident loan repayment program. Campbell said the program would serve as an incentive to medical residents to practice their specialties in designated shortage areas in Nebraska.

Under the bill, a qualified applicant must be enrolled or accepted in an approved medical specialty residency program in Nebraska and agree to one year of full-time practice in a designated health profession shortage area. The medical resident also would be required to accept Medicaid patients in his or her practice.

Loan repayment would be limited to $40,000 per each year of residency, not to exceed $120,000 per recipient. A resident who did not adhere to the terms of the act would be required to repay the state 150 percent of the outstanding loan principal at an 8 percent annual interest rate from the date of default.

Campbell said adding residents to the state’s health care provider incentive program would help Nebraska create a stronger health care system.

“The chief goal is to create an incentive for health professionals to practice in shortage areas,” she said.

The bill also would increase the financial assistance limits of two existing programs under the act.

Limits on student loans would increase from $20,000 to $30,000 per year, not to exceed $120,000 for medical, dental or doctoral-level mental health students. Limits on loan repayment for physicians, dentists and psychologists would increase from $20,000 to $30,000 per year of full-time practice in a designated health profession shortage area, not to exceed $90,000 per recipient.

Loan repayment limits would increase from $10,000 to $15,000 per year, not to exceed $45,000 per recipient, for physician assistants, nurse practitioners, pharmacists, physical therapists, occupational therapists and mental health practitioners.

Campbell offered an amendment, adopted 38-2, that would cancel any repayment obligations under the act in the event of a recipient’s total and permanent disability or death.

LB196 advanced to select file 40-2.

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