This is an archive page. The links are no longer being updated.
Date: Tuesday, Jan. 20, 1998 FOR IMMEDIATE RELEASE Contact: HRSA Press Office(301) 443-3376
These HEAL defaulters were referred to the HHS Inspector General's office for exclusion from Medicare and Medicaid participation for failure to repay the federally guaranteed HEAL loans. Altogether the defaulters owe more than $107 million on the loans, which were used to help pay for their health professions education.
The names of the defaulters will be published in the Federal Register this week. They have also been referred to the Department of Justice for further possible litigation and enforced collection through wage garnishment, attachment of prop erty and seizure of bank accounts. Other actions include withholding tax refunds and reporting names to credit bureaus.
The list of names was also posted on the Internet today at www.defaulteddocs.dhhs.gov.
"Health care professionals who have defaulted on taxpayer-supported education loans should not be collecting Medicare or Medicaid payments," said Secretary Shalala. "Every available resource is being used to keep taxpayers from foo ting the bill for hard-core defaulters. They must pay up or lose out -- on Medicare and Medicaid participation and good credit ratings."
For at least three years, payment has been solicited by the original lenders of the federally-guaranteed loans, and by HHS' Health Resources and Services Administration.
"We are taking tough measures to force defaulters to live up to their contracts," said Claude Earl Fox, M.D., M.P.H., acting administrator of HRSA. "We can't let a few bad apple defaulters get away with taking advantage of the Amer ican public and bringing dishonor to their profession."
The majority of defaulters are from California, Florida, Georgia, New York, Pennsylvania and Texas. Chiropractors lead the list of HEAL defaulters; others are dentists, physicians, podiatrists and other health care professionals.
HEAL funds have helped finance more than 160,000 students' health professions education. Approximately 95 percent of HEAL borrowers honor their loan obligation and set up schedules to repay their loans.
The loans for the HEAL program, guaranteed by the federal government, were made by private banks, pension funds, credit unions, and other private and state lending institutions to health professions students. Federal loan guaranty means the feder al government pays the lender if students default. Federal payments on defaulted loans are made from the Student Loan Insurance Fund, which is supported by an insurance premium paid by the borrower and by congressional appropriation when the premiums are insufficient to cover default costs.
HRSA, located in Rockville, Md., is the lead HHS agency for delivery of primary health care services to underserved individuals and families, and for addressing the needs of health professional shortage areas. The HEAL program was established in 1979 to offer federally insured loans of last resort to students in health professions education.