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ices, the Secretary will consider: terminations, the Secretary will con

costs to the National Health Serv- siderCorps of providing the health serv- (1) The costs necessary to adequately i; the costs to the health manpower support the health services provided by rtage area for providing the serv- the assigned National Health Service 3; and the charges for similar serv- Corps personnel and the income and fi3 by other practitioners or facilities nancial resources available to meet the i or nearby the health manpower costs; ortage area. However, if assigned Na- (11) The ability of the applicant to obnal Health Service Corps personnel tain credit from suppliers, lending in3 providing services within the stitutions, private organizations and mework of an established health individuals; rvices delivery system, the Secretary (iii) The need of the health manpower ay approve the fees charged under shortage area for health services; and at system without regard to the fore- (iv) The extent to which the National ving factors.

Health Service Corps site utilizes (C)(1) No charge or a nominal charge health professions personnel. ill be made for health services pro- (2) A significant percentage of the inded by assigned National Health dividuals who are located in the health ervice Corps personnel to individuals manpower shortage area and are reithin the health manpower shortage ceiving the health services of the asrea with annual incomes at or below signed National Health Service Corps he “CSA Income Poverty Guidelines" personnel are elderly, living in poverty, 15 CFR 1060.2). However, no individual or have other characteristics which invill be denied health services based dicate an inability to pay. For purposes ipon inability to pay for the services. of this section, "elderly” means perAny individual who has an annual in- sons 65 years or older and the "CSA Income above the "CSA Income Poverty come Poverty Guidelines" will be used Guidelines,” but whose income does as the standard for determining whethnot exceed 200 percent of the CSA lev- er individuals are living in poverty. els, will receive health services at a Other characteristics indicating inabilnominal charge. However, charges will ity to pay include, but are not to be be made for services to the extent that limited to, the ratio of unemployment * payment will be made by a third party in the health manpower shortage area

which is authorized or under legal obli- and the area's cost-of-living index. - gation to pay the charges.

(b) The Secretary may waive in * (2) The provisions of this paragraph whole or in part the reimbursement re

also apply with respect to services pro- quirements of section 334(1)(1) of the : vided by an individual who is fulfilling Act if he or she determines that the : an NHSC scholarship obligation under National Health Service Corps site is a El section 753 or who received a special small health center (as defined by secgrant under section 755.

tion 334(f)(5) of the Act) that needs all

or part of the amount otherwise pay1823.10 Under what circumstances may able to a National Health Service Corps

(1) Expand or improve its provision of site's reimbursement obligation to

health services; the Federal Government be waived?

(2) Increase the number of individuals (a) The Secretary may waive in served; whole or in part the reimbursement re- (3) Renovate or modernize facilities quirements of section 334(a)(3) of the for its provision of health services; Act if he determines that:

(4) Improve the administration of its (1) The National Health Service health service programs; or Corps site is financially unable to meet (5) Establish a financial reserve to asthe reimbursement requirements or sure its ability to continue providing that compliance with those require- health services; ments will unreasonably limit the abil- (c) Where the Secretary determines ity of the site to adequately support that a National Health Service Corps the provision of services by assigned site is eligible for a waiver under paraCorps personnel. In making these de- graph (a)(1) or (2) of this section. the


Secretary may waive the application of the reimbursement requirements of section 334(a)(3) of the Act and apply the reimbursement requirements of section 334(1)(1) of the Act. The Secretary may waive in whole or in part the reimbursement requirements of section 334(1)(1) for such a site if he or she determines that the National Health Service Corps site meets the requirements of paragraph (a)(1) of this section. Funds retained by a National Health Service Corps site as a result of such waiver must be used for the purposes set forth in paragraphs (b)(1) through (5) of this section.

(d) Requests for a prospective or retrospective waiver must be made at the time and in the manner and contain the documentation prescribed by the Secretary. (45 FR 12790, Feb. 27, 1980, as amended at 51 FR 31948, Sept. 8, 1986) 8 23.11 Under what circumstances may

the Secretary sell equipment or other property of the United States used by the National Health Service

Corps site? (a) Upon expiration of the assignment of all Corps personnel to a health manpower shortage area, the Secretary may sell equipment and other property of the United States used by the assigned personnel. The equipment may be sold at the fair market value or less than the fair market value to any entity providing health services in or to a health manpower shortage area if the Secretary determines that an entity is unable to pay the fair market value. In determining whether an entity is financially unable to purchase equipment or property at fair market value, the Secretary will consider (1) the present financial resources of the entity available to purchase the equipment or property based upon its current liabilities, and (2) the entity's ability to obtain the funds necessary to purchase the equipment or property. However, the Secretary will not sell the equipment or property for less than fair market value to a profitmaking organization unless the organization gives reasonable assurance that it will use the equipment or property to provide health services in or to the health manpower shortage area.

(b) The Secretary will give price to sales to an entity providing reas able assurance that it will use = equipment or property for the parte of retaining within the health a power shortage area National He Service Corps personnel who have ce pleted their assignments. 8 23.12 Who will supervise and cont

the assigned personnel? Assigned National Health Serr.. Corps personnel will at all times main under the direct supervision & control of the Secretary. Observance : institutional rules and regulations the assigned personnel is a mere in dent of the performance of their Fe eral functions and does not alter the direct professional and administrati responsibility to the Secretary. 8 23.13 What nondiscrimination quirements apply

Natiota Health Service Corps sites? National Health Service Corps site are advised that in addition to comply ing with the terms and conditions a this regulation, the following laws an: regulations are applicable

(a) Title VI of the Civil Rights Acto 1964 (43 U.S.C. 2000d et seq.) and its inplementing regulations, 45 CFR part & (prohibiting discrimination in federally assisted programs on the grounds or race, color, or national origin); and

(b) Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and its implementing regulations, 45 CFR part 64 (prohibiting discrimination in federally assisted programs on the basis of handicap).

(c) The Age Discrimination Act of 1975 (42 U.S.C. 6101 et seq.) and its implementing regulations, 45 CFR part 91 (prohibiting nondiscrimination on the basis of age in HHS programs or activities receiving Federal financial assistance). (45 FR 12790, Feb. 27, 1980, as amended at 49 FR 38109, Sept. 27, 1984)

Subpart B-Private Practice Spe

cial Loans for Former Corps Members

SOURCE: 51 FR 31948, Sept. 8, 1986, unless otherwise noted.

823.24 In what amounts are loans

made? The Secretary may make loans either in the amount of $12,500, if the recipient agrees to practice in accordance with the loan agreement for a period of at least 1 year but less than 2 years, or $25,000, if the recipient agrees to practice in accordance with the loan agreement for a period of at least 2 years.

8 23.25 How will interest rates for

loans be determined? Interest will be charged at the Treasury Current Value of Funds (CVF) rate in effect on April 1 immediately preceding the date on which the loan is approved and will accrue from the date the loan funds are disbursed to the borrower.

23.21 Definitions. As used in this subpart, terms have le same meanings as those given to nem in subpart A, $23.2. In addition: National Health Service Corps scholarzip recipient means an individual reeiving a scholarship under the Public ealth and National Health Service orps Scholarship Training Program uthorized by section 225 of the Act as n effect on September 30, 1977, and rerealed on October 1, 1977, or a scholarhip under the NHSC Scholarship Prosram authorized by section 338A of the Act, formerly section 751 of the Act.

Private full-time clinical practice means che provision of ambulatory clinical services for a minimum of 40 hours per week for at least 45 weeks a year, inaluding the provision of hospital coverage services appropriate to meet the needs of patients treated and to assure continuity of care. The 40 hours per week must be performed in no less than 4 days per week with no more than 12 hours of work being performed in any 24-hour period. $8 23.22 What is the purpose of a private practice loan?

urpose The purpose of the private practice loan is to assist NHSC scholarship recipients in establishing private fulltime clinical practices in designated

health manpower shortage areas. vi 8 23.23 Who is eligible to receive a pri

vate practice option loan? I

(a) Eligibility for loans is limited to NHSC scholarship recipients who have * completed at least 2 years of their servi ice obligations at a NHSC site. NHSC

scholarship recipients remain eligible 3: for loans under this subpart for 1 year

after they have completed their service B! obligations at a NHSC site.

(b) Scholarship recipients who are in arrears 31 days or more on a Health Professions Student Loan (42 U.S.C. 294m et seq.), Health Education Assistance Loan (42 U.S.C. 294, et seq.), Nursing Student Loan (42 U.S.C. 297a et seq.), or any other Federally guaran

teed or direct student loan are ineli3

gible for this loan program. 0

(C) NHSC scholarship recipients who have received loans under either this subpart or subpart C of this part are ineligible for loans under this subpart.

8 23.26 How is the loan repaid?

Payments shall be made at monthly intervals, beginning 1 month from the date of the loan disbursement, in accordance with the repayment schedule established by the Secretary and set forth in the loan agreement. Only interest payments are required during the first 2 years. The repayment schedule may be extended in accordance with $23.31(a).

8 23.27 What happens if scheduled pay

ments are late? (a) Failure to make full payment of principal and/or interest when due will subject the borrower to the assessment of administrative costs and penalty charges, in addition to the regular interest charge, in accordance with 45 CFR part 30.

(b) Failure to make full payment of principal and/or interest when due may result in the Secretary placing the borrower in default of the loan. See $23.28(a).

$ 23.28 What events constitute default?

The following events will constitute defaults of the loan agreement:

(a) Failure to make full payment of principal and/or interest when due, and continuance of that failure for a period of sixty (60) days, or a lesser period of time if the Secretary determines that more immediate action is necessary in

(b) No waiver, full or partial, d: payment of the loan will be ga except that the obligation of s I rower to repay a loan shall be cance upon the death or total and permes disability of the borrower, as dez mined by the Secretary.

(c) In order to make a determinaunder paragraph (a) or (b) of this s tion, the Secretary may requires porting medical, financial, or documentation.

order to protect the interests of the Government.

(b) Failure to perform or observe any of the terms and conditions of the loan agreement and continuance of that failure for a period of sixty (60) days.

(c) The institution of bankruptcy proceedings, either voluntary or involuntary, under any State or Federal statute, which may adversely affect the borrower's ability to comply with the terms and conditions of the agreement or the promissory note. $23.29 What happens in the case of a

default? (a) In the event of default, the Secretary may declare the entire amount owed (including principal, accrued interest and any applicable charges) immediately due and payable. Collection of the amount owed will be made in accordance with 45 CFR part 30.

(b) The borrower is not entitled to written notice of any default and the failure to deliver written notice of default in no way affects the Secretary's right to declare the loan in default and take any appropriate action under the loan agreement or the promissory note.

(c) The failure of the Secretary to exercise any remedy available under law or regulation shall in no event be construed as a waiver of his or her right to exercise that remedy if any subsequent or continued default or breach occurs.

8 23.32 What conditions are impor

on the use of the loan funds? (a) The borrower must use the toamount of the loan to purchases lease, or both, equipment and suppe to hire authorized personnel to 25 in providing health services andło: renovate facilities for use in prović health services in his or her priva; practice. Equipment and supplies pt chased and/or leased, personnel hirt and facilities renovated shall be lisited to the items requested in the loss application and approved by the Sec retary.

(b) The borrower must expend the loan funds within 6 months from date of the loan or within such othe time as the Secretary may approve Documentation of the expenditure a funds must be furnished to the Sec retary upon request.

$23.30 May the loan be prepaid?

The borrower shall have the option to prepay the balance of any part of the loan, together with accrued interest, at any time without prepayment penalty.

8 23.33 What security must be given for

these loans? The Secretary may require the bor rower to pledge to the Secretary & Se curity interest in specified collateral.

8 23.31 May loan payments be post

poned or waived? (a) Whenever health, economic, or other personal problems affect the borrower's ability to make scheduled payments on the loan, the Secretary may allow the borrower an extension of time or allow the borrower to make smaller payments than were previously scheduled; however, interest will continue to accrue at the rate specified in the promissory note until the loan is repaid in full. The loan must be fully repaid within 10 years after it was made.

§ 23.34 What other conditions are in

posed? (a) The borrower must sign a loan agreement describing the loan and practice conditions, and a promissory note agreeing to repay the loan plus interest.

(b) The borrower must agree to enter into private full-time clinical practice in a HMSA for the time period spectfied in the loan agreement.

(c) The borrower must accept assigt. ment, for the time period specified in the loan agreement, under section 1842(b)(3)(B)(ii) of the Social Security Act as full payment for all services for

ich payment may be made under supplies in amounts adequate to rea't B of title XVIII of that Act.

sonably protect the borrower from 1) The borrower must enter into an risk, including public liability, fire, propriate agreement, for the time theft, and worker's compensation. iod specified in the loan agreement, (i) If the Secretary retains a security ch the State agency which admin- interest pursuant to $23.33, the borers the State plan for medical assist- rower must keep and preserve all docuce under title XIX of the Social Se- ments which affect that security interrity Act to provide services to indi- est for the period of the loan repayluals entitled to medical assistance ment and allow the Secretary or his or der the plan.

her designee access, during normal e) During the time period specified working hours, to those documents.

the loan agreement, the borrower (j) The borrower must maintain the ust provide health services to indi- loan proceeds in a separate account duals at the usual and customary from his or her other transactions and te prevailing in the HMSA in which must agree to draw upon this account rvices are provided; however, services and expend the loan proceeds in accord(ust be provided at no charge or at a ance with $23.32. ominal charge to those persons unable (k) The Secretary may impose other 5) pay for these services.

conditions which he or she deems ap(f) The borrower must keep and pre- propriate under law or regulation to erve all documents, including bills, re- protect the Government's interests. eipts, checks, and correspondence

EFFECTIVE DATE NOTE: At 51 FR 31948, hich affect the operation of the pri

Sept. 8, 1986, $ 23.34 was added. Paragraphs (1), ate practice and the expenditure of (h), and (1) contain information collection reoan funds for the period of the prac- quirements which will not be effective until cice obligation specified in the loan approval has been obtained from the Office greement plus 3 years. Accounts will of Management and Budget. A notice will be de maintained under one of the ac

published in the FEDERAL REGISTER. counting principles identified by the

8 23.35 What criteria are used in makSecretary in the loan agreement.

ing loans? (8) The borrower must provide the Secretary and the Controller General Approval of loan applications will be of the United States, or their rep

based on the criteria set forth below: resentatives, access during normal

(a) The need in the HMSA for the apworking hours to accounts, documents,

plicant's health profession as deterand records for the purposes of audit or

mined under section 332 of the Act; evaluation; and must permit the Sec

(b) The applicant's need for the loan retary or his or her representative to

funds; and inspect the private practice at reason

(c) The comments from State or local able times during the period of the

health professional societies on the appractice obligation specified in the propriateness of the applicant's inloan agreement plus 3 years. All infor

tended private practice; and mation as to personal facts and cir

(d) The applicant's credit worthiness cumstances about recipients of services

and projected financial ability to repay shall be held confidential, and shall not

the loan. be divulged without the individual's consent except as may be required by Subpart c-Private Startup Loans law or as may be necessary to provide medical service to the individual or to

8 23.41 What conditions are applicable provide for medical or fiscal audits by

to loans under this subpart? the Secretary or his or her designee The regulations set out in subpart B with appropriate safeguards for con- of this part are fully applicable to fidentiality of records.

loans awarded under section 338C(e)(1) (h) For the entire period of loan re- of the Public Health Service Act, expayment, the borrower must acquire, cept as noted below; maintain, and when requested must (a) Eligibility. (1) In lieu of $23.23(a), provide the Secretar

of the following applies to loans made policies of insurance



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