Doctors who received National Health Service Corps scholarships from the Health and Human Services Department and then ignored their obligation to repay the government, with either medical services or money, still collect millions of dollars in Medicare and Medicaid doctor fees each year, according to a report by the HHS inspector general.
Under the scholarship program, medical students who get tuition and stipends from HHS are obligated to work at least two years in areas where doctors are in short supply, such as on Indian reservations.
If they fail to meet that obligation, they must pay back between one and three times the amount of their scholarship, plus interest and late charges.
Inspector General Richard P. Kusserow said department records show that, as of December 1983, 1,813 scholarship recipients had broken their service agreements and defaulted on $61.3 million in repayment obligations, but that many had worked out payment arrangements.
However, 426 had made no payments and were delinquent. Kusserow obtained the names of 254 of them who owed $9 million in principal and matched them against lists of doctors who are receiving payments for treating Medicare and Medicaid patients.
The match showed that 80 of them had received payments totaling $3.5 million between 1982 and the first quarter of 1984. Payments ranged from $1,100 to $309,000. Eleven of them got $100,000 or more, and one, who owed the government more than $50,000, received $152,000. Kusserow said the government could have recovered at least $2.3 million by deducting the debts from their Medicare and Medicaid payments.
Kusserow also said that doctors who were making some repayment on their debts often could have paid much more. For example, one doctor who owed $43,000 in principal and interest was paying off $400 a month, which barely covered accumulating interest. Meanwhile, the report said, he "used his financial resources to acquire real estate costing $318,000 and an automobile for $14,000."