Linking Title IV of the College Cost Reduction and Access Act to EMTALA.
The benefits of the Public Sector loan forgiveness clause.
Recently, current medical students and residents received a scare after the passage of HR 2669 – The College Cost Reduction and Access Act. As many now know, the language in the bill would have ended the so-called 20/220 debt-to-income rule that allows most residents to receive economic deferment status of federal loan repayment during postgraduate training. It is possible to qualify for the 20/220 pathway if an individual’s debt burden is greater than 20% of income and if their debt to income ratio is less than 220% of the federal poverty level for a two person household. Any resident with $100,000 of federal loans (2/3s of all medical school graduates) would qualify for the deferment during all three or four years of post-graduate training.
Instead, the CCRAA would have implemented an income-sensitive repayment plan. There is an important difference between deferment and forbearance in regards to delaying repayment and many residents would have had to seek forbearance during their training. Deferment means that subsidized student loans will continue to be subsidized during the deferment period. When the CCRAA passed, 20/220 pathway to deferment looked to be out the window. Furthermore, the income-sensitive repayment plan proposed a cap on borrower’s repayments at 15% of their income with a minimum of $4,200 per year. This would result in approximately a payment of $350 per month beginning in 2009 and given residents and unwelcome choice between this large monthly bill or the accumulation of interest.
Here is the problem with that in comparison to the old plan: If you pay $350 per month during 3 years of residency ($12,600 over 36 months) you have essentially just taken a pay cut of about $4,000 per year and you will still owe the same on your loans as you would have under the old deferment model that paid the interest for you. Why? Assuming you have the maximum aggregate subsidized loan, you will only be touching the interest during that 36 month period – the interest that would have been paid by the government in the deferment model. Thus, residency salaries essentially decrease by $4K.
Fortunately, while the CCRAA did pass, the 20/220 rule was NOT eliminated thanks to hard work by the AAMC, AMA and AMSA. You can help ensure that the 20/220 stays intact by supporting S. 2303 and visiting www.ama-assn.org/go/cola for more information.
So, now that the fear of monetary loss has subsided, is there anything good about the CCRAA? Does it have any impact on EM or medicine more broadly? Well, indirectly the answer is “yes”, more directly, the answer is “maybe”. Let’s take a look at the CCRAA and explore some ways I think that the bill’s language might allow improvements in our own discipline by putting this law in the context of other federal legislature such as EMTALA (or at the very least brings in to question some areas of EMTALA that could be improved by further advocacy).
First of all, the CCRAA does some very important things that should be commended: the law increases the amount of a federal Pell grant by almost $1100 by 2012 and establishes a $4,000 a year grant for future teachers. For those of us in or near repayment, the new bill also decreases Stafford loan interest rates to 6.8% if disbursed between 2006 and 2008. Eventually, interest rates will be 3.4% for loans disbursed in 2012. The new law also increases grant funding through College Access Challenge Grants for underserved student populations. In addition, specific funds are disbursed to minority serving institutions.
While all of these aspects of the CCRAA are laudable, I would like to turn our focus to Title IV of the legislation. This part of the CCRA discusses loan forgiveness and outlines a program to increase public service employment among new graduates. More specifically, the portion of the bill allows for full Federal Direct Loan forgiveness after 120 months of income sensitive payments occurring simultaneously with 120 months of public service employment. Borrowers who have FFEL or other federal loans could consolidate/reconsolidate their loans under the Direct Loan program to qualify.
So, what qualifies as a “public service job”? Well, let’s look at the language of HR 2669. The CCRAA defines a public service job as follows:
A full-time job in emergency management, government, military service, public safety, law enforcement, public health, public education (including early childhood education), social work in a public child or family service agency, public interest law services (including prosecution or public defense or legal advocacy in low-income communities at a nonprofit organization), public child care, public service for individuals with disabilities, public service for the elderly, public library sciences, school-based library sciences and other school-based services, or at an organization that is described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code; or Teaching as a full-time faculty member at a Tribal College or University as defined in section 316(b) and other faculty teaching in high-needs areas, as determined by the Secretary.
Is “EM physician” a public service job? I would argue that the answer to this question is “yes” for two reasons.
1. The language of the bill specifically states that those with a full-time job in emergency management are considered public service employees. Certainly, an EM Physicians manages patient services, an emergency department, as well as broader aspects of emergency care (including EMS and disaster planning). These are all components of the job duties found in emergency medicine physician positions.
2. Federal mandates to treat all comers defined by EMTALA specifically link emergency medicine services to public service. The ED is often the last resort for patient care in our current health care setting. There is a legal and ethical responsibility to treat every patient that enters our doors and this responsibility is taken up by EM physicians when other fields refuse. This treatment, however, does not come with any guarantees for reimbursement nor are we protected from litigation resulting from undesired outcomes. The services we provide to the community and the risks of increasing our legal exposure during difficult cases suggest that we provide a public-service as a full time job. Thus, EM physicians should be eligible to qualify for the loan forgiveness provision.
When the CCRAA was passed this year, no one envisioned the potential burden to current and future medical residents. This was an unintentional consequence and, once it was pointed out, was quickly resolved. Now, we are left we a CCRAA that will likely be modified to make the 20/220 pathway permanent. Therefore, we can turn our attention to positive aspects of the CCRAA. We have invested heavily into higher education in this country. The interest on our student loans will finance education in this country for the next generation. Thus, as heavily invested shareholders, we have a stake and claim to an associated piece of legislature that affects the economic and monetary rewards of that system. The recognition of EM physician as a public service job will lead to some relief from a heavy loan debt for many young members of this field.
The issue of funding in relationship to EMTALA can be taken a step further (and outside the context of the CCRAA). This debate reminds us that, while we are obligated to treat all-comers to the ED, there is no guarantee of monetary reimbursement associated with that responsibility. Whether we work through the language in the CCRAA or not, we must continue to advocate progress in the current structure of EMTALA. More specifically, until funding and exposure issues are resolved, we will continue to fail at resolving the problems laid out in the 2006 IOM report on emergency medicine. The on-call shortage is inherently linked to this issue and, in the current context of medico-legal liability, it is up to us to find creative approaches at raising awareness to the problems that exist within emergency medicine. If that means using a new law as a tool for advocacy, so be it.