
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 42USC254n]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                    CHAPTER 6A--PUBLIC HEALTH SERVICE
 
                SUBCHAPTER II--GENERAL POWERS AND DUTIES
 
                       Part D--Primary Health Care
 
       subpart iii--scholarship program and loan repayment program
 
Sec. 254n. Private practice


(a) Application for release of obligations; conditions

    The Secretary shall, to the extent permitted by, and consistent 
with, the requirements of applicable State law, release an individual 
from all or part of his service obligation under section 254m(a) of this 
title or under section 234 \1\ of this title (as in effect on September 
30, 1977) if the individual applies for such a release under this 
section and enters into a written agreement with the Secretary under 
which the individual agrees to engage for a period equal to the 
remaining period of his service obligation in the full-time private 
clinical practice (including service as a salaried employee in an entity 
directly providing health services) of his health profession--
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    \1\ See References in Text note below.
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        (1) in the case of an individual who received a scholarship 
    under the Scholarship Program or a loan repayment under the Loan 
    Repayment Program and who is performing obligated service as a 
    member of the Corps in a health professional shortage area on the 
    date of his application for such a release, in the health 
    professional shortage area in which such individual is serving on 
    such date or in the case of an individual for whom a loan payment 
    was made under the Loan Repayment Program and who is performing 
    obligated service as a member of the Corps in a health professional 
    shortage area on the date of the application of the individual for 
    such a release, in the health professional shortage area selected by 
    the Secretary; or
        (2) in the case of any other individual, in a health 
    professional shortage area (designated under section 254e of this 
    title) selected by the Secretary.

(b) Written agreement; fee rates; ability to pay; health insurance; 
        regulations; actions to ensure compliance

    The written agreement described in subsection (a) of this section 
shall--
        (1) provide that during the period of private practice by an 
    individual pursuant to the agreement--
            (A) any person who receives health services provided by the 
        individual in connection with such practice will be charged for 
        such services at the usual and customary rate prevailing in the 
        area in which such services are provided, except that if such 
        person is unable to pay such charge, such person shall be 
        charged at a reduced rate or not charged any fee; and
            (B) the individual in providing health services in 
        connection with such practice (i) shall not discriminate against 
        any person on the basis of such person's ability to pay for such 
        services or because payment for the health services provided to 
        such person will be made under the insurance program established 
        under part A or B of title XVIII of the Social Security Act [42 
        U.S.C. 1395c et seq. and 1395j et seq.] or under a State plan 
        for medical assistance approved under title XIX of such Act [42 
        U.S.C. 1396 et seq.], and (ii) shall agree to accept an 
        assignment under section 1842(b)(3)(B)(ii) of such Act [42 
        U.S.C. 1395u(b)(3)(B)(ii)] for all services for which payment 
        may be made under part B of title XVIII of such Act and enter 
        into an appropriate agreement with the State agency which 
        administers the State plan for medical assistance under title 
        XIX of such Act to provide services to individuals entitled to 
        medical assistance under the plan; and

        (2) contain such additional provisions as the Secretary may 
    require to carry out the purposes of this section.

For purposes of paragraph (1)(A), the Secretary shall by regulation 
prescribe the method for determining a person's ability to pay a charge 
for health services and the method of determining the amount (if any) to 
be charged such person based on such ability. The Secretary shall take 
such action as may be appropriate to ensure that the conditions of the 
written agreement prescribed by this subsection are adhered to.

(c) Breach of service contract

    If an individual breaches the contract entered into under section 
254l or 254l-1 of this title by failing (for any reason) to begin his 
service obligation in accordance with an agreement entered into under 
subsection (a) of this section or to complete such service obligation, 
the Secretary may permit such individual to perform such service 
obligation as a member of the Corps.

(d) Travel expenses

    The Secretary may pay an individual who has entered into an 
agreement with the Secretary under subsection (a) of this section an 
amount to cover all or part of the individual's expenses reasonably 
incurred in transporting himself, his family, and his possessions to the 
location of his private clinical practice.

(e) Sale of equipment and supplies

    Upon the expiration of the written agreement under subsection (a) of 
this section, the Secretary may (notwithstanding any other provision of 
law) sell to the individual who has entered into an agreement with the 
Secretary under subsection (a) of this section, equipment and other 
property of the United States utilized by such individual in providing 
health services. Sales made under this subsection shall be made at the 
fair market value (as determined by the Secretary) of the equipment or 
such other property, except that the Secretary may make such sales for a 
lesser value to the individual if he determines that the individual is 
financially unable to pay the full market value.

(f) Malpractice insurance

    The Secretary may, out of appropriations authorized under section 
254k of this title, pay to individuals participating in private practice 
under this section the cost of such individual's malpractice insurance 
and the lesser of--
        (1)(A) $10,000 in the first year of obligated service;
        (B) $7,500 in the second year of obligated service;
        (C) $5,000 in the third year of obligated service; and
        (D) $2,500 in the fourth year of obligated service; or
        (2) an amount determined by subtracting such individual's net 
    income before taxes from the income the individual would have 
    received as a member of the Corps for each such year of obligated 
    service.

(g) Technical assistance

    The Secretary shall, upon request, provide to each individual 
released from service obligation under this section technical assistance 
to assist such individual in fulfilling his or her agreement under this 
section.

(July 1, 1944, ch. 373, title III, Sec. 338D, formerly title VII, 
Sec. 753, as added Pub. L. 94-484, title IV, Sec. 408(b)(1), Oct. 12, 
1976, 90 Stat. 2285; amended Pub. L. 96-538, title IV, Sec. 403, Dec. 
17, 1980, 94 Stat. 3192; renumbered Sec. 338C and amended Pub. L. 97-35, 
title XXVII, Sec. 2709(a), (d), Aug. 13, 1981, 95 Stat. 908, 910; 
renumbered Sec. 338D and amended Pub. L. 100-177, title II, Sec. 201(2), 
title III, Sec. 307, Dec. 1, 1987, 101 Stat. 992, 1005; Pub. L. 101-597, 
title IV, Sec. 401(b)[(a)], Nov. 16, 1990, 104 Stat. 3035.)

                       References in Text

    Section 234 of this title, referred to in subsec. (a), was repealed 
by Pub. L. 94-484, title IV, Sec. 408(b)(1), Oct. 12, 1976, 90 Stat. 
2281, effective Oct. 1, 1977.
    The Social Security Act, referred to in subsec. (b)(1)(B), is act 
Aug. 14, 1935, ch. 531, 49 Stat. 620, as amended. Parts A and B of title 
XVIII of the Social Security Act are classified generally to parts A 
(Sec. 1395c et seq.) and B (Sec. 1395j et seq.) of subchapter XVIII of 
chapter 7 of this title. Title XIX of such Act is classified generally 
to subchapter XIX (Sec. 1396 et seq.) of chapter 7 of this title. For 
complete classification of this Act to the Code, see section 1305 of 
this title and Tables.

                          Codification

    Section was formerly classified to section 294v of this title prior 
to its renumbering by Pub. L. 97-35.


                            Prior Provisions

    A prior section 338D of act July 1, 1944, was renumbered section 
338E by section 201(2) of Pub. L. 100-177 and is classified to section 
254o of this title.


                               Amendments

    1990--Subsec. (a)(1), (2). Pub. L. 101-597 substituted reference to 
health professional shortage area for reference to health manpower 
shortage area wherever appearing.
    1987--Subsec. (a). Pub. L. 100-177, Sec. 307(1)-(3), made technical 
amendment to reference to section 254m of this title to reflect 
renumbering of corresponding section of original act, in introductory 
provisions, in par. (1) inserted ``who received a scholarship under the 
Scholarship Program or a loan repayment under the Loan Repayment Program 
and'' after ``individual'' the first time it appeared as the probable 
intent of Congress, and inserted ``or in the case of an individual for 
whom a loan payment was made under the Loan Repayment Program and who is 
performing obligated service as a member of the Corps in a health 
manpower shortage area on the date of the application of the individual 
for such a release, in the health manpower shortage area selected by the 
Secretary'', and in par. (2) inserted ``selected by the Secretary''.
    Subsec. (b). Pub. L. 100-177, Sec. 307(4), inserted at end ``The 
Secretary shall take such action as may be appropriate to ensure that 
the conditions of the written agreement prescribed by this subsection 
are adhered to.''
    Subsec. (c). Pub. L. 100-177, Sec. 307(5), inserted reference to 
section 254l-1.
    Subsec. (e). Pub. L. 100-177, Sec. 307(b), designated par. (2) as 
entire subsection and struck out par. (1) which read as follows: ``The 
Secretary may make such arrangements as he determines are necessary for 
the individual for the use of equipment and supplies and for the lease 
or acquisition of other equipment and supplies.''
    1981--Subsec. (a). Pub. L. 97-35, Sec. 2709(d)(1), inserted 
provision respecting requirements of applicable State law, substituted 
references to sections 254m(a) and 234 of this title, for reference to 
section 294u(a) of this title, and in cl. (2) struck out priority 
requirement under section 254f(c) of this title.
    Subsec. (b)(1)(B). Pub. L. 97-35, Sec. 2709(d)(2), inserted ``(i)'' 
before ``shall not'' and added cl. (ii).
    Subsecs. (c) to (g). Pub. L. 97-35, Sec. 2709(d)(3), added subsecs. 
(c) to (g).
    1980--Subsec. (a). Pub. L. 96-538 substituted in par. (2) ``which 
has'' for ``which (A) has'' and struck out subpar. (B) which referred to 
a health manpower shortage area which has a sufficient financial base to 
substain private practice and provide the individual with income of not 
less than the income of members of the Corps, and struck out provision 
following par. (2) which provided that in the case of an individual 
described in par. (1), the Secretary release the individual from his 
service obligation under this subsection only if the Secretary 
determines that the area in which the individual is serving met the 
requirements of cl. (B) of par. (2).


                             Effective Date

    Section effective Oct. 1, 1977, see section 408(b)(1) of Pub. L. 94-
484, set out in part as a note under section 254l of this title.


 Effective Date; Savings Provision; Credit for Period of Internship or 
     Residency Before September 30, 1977, Towards Service Obligation

    See section 408(b)(2) of Pub. L. 94-484, set out as a note under 
section 254l of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 242a, 254d, 254l, 254l-1, 
254m, 254o, 254p, 294cc, 11709 of this title.
