COLLECTION OF PAST-DUE AMOUNTS OWNED BY PHYSICIANS WHO BREACHED CONTRACTS UNDER THE NATIONAL HEALTH SERVICE CORPS SCHOLARSHIP PROGRAM.

SEC. 4052. COLLECTION OF PAST-DUE AMOUNTS OWNED BY PHYSICIANS WHO BREACHED CONTRACTS UNDER THE NATIONAL HEALTH SERVICE CORPS SCHOLARSHIP PROGRAM. (a) In General.— Title XVIII of the Social Security Act, as previously amended by this subtitle, is amended by adding at the end thereof the following new section: “offset of payments to physicians to collect past-due obligations arising from breach of scholarship contract “Sec. 1892. (a) In General.— “(1) (A) Subject to subparagraph (B), the Secretary shall enter into an agreement under this section with any physician who, by reason of a breach of a contract entered into by such physician pursuant to the National Health Service Corps Scholarship Program, owes a past-due obligation to the United States (as defined in subsection (b)). “(B) The Secretary shall not enter into an agreement with a physician under this section to the extent— “(i) (I) the physician has entered into a contract with the Secretary pursuant to section 204(a)(1) of the Public Health Service Amendments of 1987, and “(II) the physician has fulfilled or (as determined by the Secretary) is fulfilling the terms of such contract; or “(ii) the liability of the physician under such section 204(a)(1) has otherwise been relieved under such section; or “(iii) the physician is performing such physician’s service obligation under a forbearance agreement entered into with the Secretary under subpart II of part D of title III of the Public Health Service Act. “(2) The agreement under this section shall provide that— “(A) deductions shall be made from the amounts otherwise payable to the physician under this title, in accordance with a formula and schedule agreed to by the Secretary and the physician, until such past-due obligation (and accrued interest) have been repaid; “(B) payment under this title for services provided by such physician shall be made only on an assignment-related basis; “(C) if the physician does not provide services, for which payment would otherwise be made under this title, of a sufficient quantity to maintain the offset collection according to the agreed upon formula and schedule— “(i) the Secretary shall immediately inform the Attorney General, and the Attorney General shall immediately commence an action to recover the full amount of the past-due obligation, and “(ii) subject to paragraph (3), the Secretary shall immediately exclude the physician from the program under this title, until such time as the entire past-due obligation has been repaid. “(3) If the physician refuses to enter into an agreement or breaches any provision of the agreement— “(A) the Secretary shall immediately inform the Attorney General, and the Attorney General shall immediately commence an action to recover the full amount of the past-due obligation, and 101 STAT. 1330–96 “(B) subject to paragraph (3), the Secretary shall immediately exclude the physician from the program under this title, until such time as the entire past-due obligation has been repaid. “(4) The Secretary shall not bar a physician pursuant to paragraph (2)(C)(ii) or paragraph (3)(B) if such physician is a sole community physician or sole source of essential specialized services in a community. “(b) Past-Due Obligation.— For purposes of this section, a past-due obligation is any amount— “(1) owed by a physician to the United States by reason of a breach of a scholarship contract under section 338E of the Public Health Service Act, and “(2) which has not been paid by the deadline established by the Secretary pursuant to section 338E of the Public Health Service Act, and has not been canceled, waived, or suspended by the Secretary pursuant to such section. “(c) Collection Under This Section Shall Not Be Exclusive.— This section shall not preclude the United States from applying other provisions of law otherwise applicable to the collection of obligations owed to the United States, including (but not limited to) the use of tax refund offsets pursuant to section 3720A of title 31, United States Code, and the application of other procedures provided under chapter 37 of title 31, United States Code. “(d) Collection from Providers and Health Maintenance Organizations.— “(1) In the case of a physician who owes a past-due obligation, and who is an employee of, or affiliated by a medical services agreement with, a provider having an agreement under section 1866 or a health maintenance organization or competitive medical plan having a contract under section 1833 or section 1876, the Secretary shall deduct the amounts of such past-due obligation from amounts otherwise payable under this title to such provider, organization, or plan. “(2) Deductions shall be in accordance with a formula and schedule agreed to by the Secretary, the physician and the provider, organization, or plan. The deductions shall be made from the amounts otherwise payable to the physician under this title as long as the physician continued to be employed or affiliated by a medical services agreement. “(3) Such deduction shall not be made until 6 months after the Secretary notifies the provider, organization, or plan of the amount to be deducted and the particular physicians to whom the deductions are attributable. “(4) A deduction made under this subsection shall relieve the physician of the obligation (to the extent of the amount collected) to the United States, but the provider, organization, or plan shall have a right of action to collect from such physician the amount deducted pursuant to this subsection (including accumulated interest). “(5) No deduction shall be made under this subsection if, within the 6-month period after notice is given to the provider, organization, or plan, the physician pays the past-due obligation, or ceases to be employed by the provider, organization, or plan. “(6) The Secretary shall also apply the provisions of this subsection in the case of a physician who is a member of a group101 STAT. 1330–97 practice, if such group practice submits bills under this program as a group, rather than by individual physicians. “(e) Transfer from Trust Funds.— Amounts equal to the amounts deducted pursuant to this section shall be transferred from the Trust Fund from which the payment to the physician, provider, or other entity would otherwise have been made, to the general fund in the Treasury, and shall be credited as payment of the past-due obligation of the physician from whom (or with respect to whom) the deduction was made.”. (b) Conforming Reference.— Section 338E(b)(1) of the Public Health Service Act (42 U.S.C. 254o(b)(l)) is amended by adding at the end thereof the following new sentence: “Amounts not paid within such period shall be subject to collection through deductions in Medicare payments pursuant to section 1892 of the Social Security Act.”. (c) Effective Date.— The amendments made by this section shall be effective on the date of the enactment of this Act.