State Budget Includes $1 Million Increase for Loan Forgiveness and Residency Slots

During this year’s state budget process, the Pennsylvania Medical Society (PAMED) was engaged on several issues on behalf of Pennsylvania physicians and patients that were ultimately successful. Gov. Corbett signed the fiscal year 2014-2015 state budget into law on July 10.

Under the budget for Department of Health programs, the Primary Health Care Practitioner appropriation was increased by $1 million. This funding — a more than 27 percent increase from the previous year — will provide additional opportunities for medical student loan forgiveness and create new primary care residency slots. Pennsylvania physicians and physicians-in-training, along with PAMED, advocated for loan repayment assurance as a strategy to retain more physicians in medically underserved areas and meet the commonwealth’s growing health care needs.

Funding also increased for the Pennsylvania Health Care Cost Containment Council (PHC4), which helps improve the quality and restrain the cost of health care in Pennsylvania. While legislative reauthorization is pending, in the interim, the council was extended by executive order. PAMED has worked with PHC4 during its more than 20-year existence and has great confidence in the value it brings to the marketplace.

PAMED was also pleased to see that the final budget includes a number of other investments in health and human services, including increased funding for: community-based healthcare clinics, services for older Pennsylvanians and those with disabilities, the Children’s Health Insurance Program (CHIP), sexual and domestic violence programs, child advocacy centers, and child care assistance. Funding for Medical Assistance also grew, despite reductions in the Medicaid benefit package, due to an expected increase in enrollment.

With the commonwealth facing a $1.5 billion deficit for the coming year, all potential sources of revenue were clearly “on the table” this budget cycle. PAMED took a proactive approach to ensure that the Mcare Fund’s accrued balance wasn’t at risk of being redirected to meet general budget obligations by reminding legislators that Mcare is funded solely through physician-paid assessments for mandated medical liability insurance and that a lawsuit is still pending over the last time they raided it. Fortunately, while the final state spending plan for ’14-15 relies on a number of controversial one-time fund transfers, PAMED was successful in making sure the Mcare Fund remained untouched.

While ultimately signing the budget, Gov. Corbett commented that the document sent to him by the General Assembly was insufficient, lacking critical pension reforms. As a result, the Governor vetoed $72 million in legislative spending and called on the House and Senate to return to Harrisburg to work on this “unfinished business.”