Physician pay is decreasing while the cost of a medical education continues to increase. What’s to be done? Can physician loan repayment programs make a difference? Specifically, are physician loan repayment programs good for primary care? Considering there is a projected shortage of 68,020 full-time primary care physicians by 2036, improvements to the primary care workforce are critical to our nation’s healthcare delivery. 

Let’s take a closer look. 

Medical Education Costs 

Becoming a doctor is an investment, and 70 percent of medical students borrow money to attend medical school. According to the Association of American Medical Colleges (AAMC), in 2023 the average medical school debt was more than $200,000 — which with interest can balloon to $300,000 over the life of the loan. 

Four years of medical school costs between $268,476 for public medical school and $363,836 for private medical schools, according to the AAMC. And that doesn’t include costs like living expenses, textbooks, or supplies. It also doesn’t include the cost of an undergraduate education.  

Undergraduate tuition is going up, and has been for the last two decades. In 2023-24, the average cost of attending a 4-year, in-state public college was $28,840, compared to $60,420 at a private institution, with out-of-state public colleges costing 62 percent to more than 100 percent more than in-state. The average cost of an undergraduate education increased for 2024-25 academic year for both public and private schools, according to a new report from U.S. News. Once again, that cost doesn’t factor in room, board, and textbooks, which can add thousands more to the bill. It’s worth noting that grants and other aid can reduce the costs of an undergraduate education. 

Bottom line: Despite incurring substantial costs — and debt — to become a physician, the upward trajectory for education costs unfortunately isn’t matched by physician pay. 

Physician Pay

After several years of modest or declining growth, average pay for physicians increased by 5.9 percent in 2023, according to Doximity’s “2024 Physician Compensation Report” published this past May. At first glance this appears to be positive step forward, especially considering 2022 saw a drop of 2.4 percent. 

Unfortunately inflationary pressures continue to negatively impact physicians’ real income. Plus Medicare physician payment has decreased 22 percent since 2001. And in addition to the Centers for Medicare and Medicaid Services (CMS) cutting overall physician pay 1.25 percent in 2024, a proposed new CMS payment rule could see Medicare reimbursement fall by an average of 2.9 percent next year. 

Bottom line: Inflation plus declining reimbursements combine to create contracting physician pay, with primary care physicians already making significantly less than specialists — and nearly $100,000 less per year than the average for all physicians. 

Physician Loan Repayment Programs

Increasing debt and declining physician pay combine to create and exacerbate risks — like the physician shortage, specialty gaps, and physician stress and burnout, which comes from overwork, among other factors. The ultimate loser is patient care. 

Can physician loan repayment programs make a difference? Specifically, are physician loan repayment programs good for primary care? The answer to both is “yes.” They can certainly make an impact on a physician’s debt — which then has an impact on decisions like specialty as well as where a physician decides to practice. 

Offered as a recruiting incentive, educational loan repayment is an attractive benefit. In exchange for an employment commitment, a recruiting hospital or other facility will pay a physician’s medical loans. An April article by the American Medical Association (AMA) cites 2023 stats from recruiting firm AMN Healthcare’s Physician Solutions division indicating 18 percent of searches included loan repayment benefits. The average amount in 2022-23 was $98,665, and most applicants were required to stay in their position for 3 years or more. The range of incentive amounts offered varied from $10,000 to $400,000. 

Other opportunities for physician loan repayment also are available — and specifically for primary care. Due to the exceptional need for primary care physicians, loan forgiveness programs are more widely available for these fields than other specialties. 

Through the Health Resources & Services Administration (HRSA), the National Health Service Corps (NHSC) offers loan repayment to licensed primary care physicians in exchange for serving at least 2 years at an NHSC-approved site in a Health Professional Shortage Area (HPSA). HPSAs can be defined by geography, population, or facility type, like private medical facilities, correctional facilities, or Federally Qualified Health Centers (FQHCs). In fact, this April the HRSA increased loan repayment amounts by 50 percent for primary care providers who commit to practicing in high-need and rural areas. 

Public Service Loan Forgiveness (PSLF) programs are also an option. Physicians must complete full-time public service employment by a 501(c)3 tax-exempt nonprofit or public institution, and includes working in areas that are underserved or have a high need for medical professionals. In this program, borrowers must make monthly payments for 10 years during PSLF-qualified work, after which the federal government will forgive their remaining debt. 

Military programs are another option. Military branches offer tuition assistance for students who are service members, but even doctors who have already graduated and are practicing can enroll in military service to get student loan assistance. Programs vary by branch. 

For state programs, the Association of American Medical Colleges (AAMC) maintains a searchable database of loan repayment and other programs for students and residents. 

Although loan repayment programs are obviously a benefit more geared toward younger physicians, as established physicians have a higher likelihood of having paid off their debt and have already selected their area of specialty, they can be a terrific way to reduce large portions of debt early in a physician’s career. They can also encourage physicians to specialize in high-need areas, as well as serve high-need populations — specifically in primary care. 

The Reimbursement Team at Hancock, Daniel & Johnson, P.C. provides legal representation to providers and health systems embroiled in disputes with government and private payors.

In the event of audits, our clients often come to us immediately to assist in responding to record requests, but it is sometimes appropriate for a provider to handle the initial production internally.

In those cases, we provide the following tips to avoid common mistakes in responding to an auditor’s request for records and to maximize the opportunity for good audit results:

1. Start early to respond to a request for medical records. As soon as a notice of an audit and request for documents is received, develop a plan for responding. The process is time-consuming and could require multiple reviews of medical records.
2. Identify who is conducting the audit and note when the audit is being conducted by a governmental regulatory body that typically reviews for fraud, waste, and abuse. In those situations, it may be best for Hancock Daniel’s Reimbursement Team to help navigate the document production.
3. Determine, if possible, what issue is under audit. Is it medical necessity, E&M code leveling, or something else? This will help determine whether to produce more records than those requested. For example, if the audit involves a medical necessity review, a clinician should be involved in identifying which records to submit because proving medical necessity may require a review of records before the date of service at issue and not just the office note from that date.
4. Make note of the deadline for submitting the records. If necessary, request an extension and be sure to get the extension in writing. Do not miss the deadline for submitting the records. Missing deadlines can result in procedural defaults and force the provider to defend an overpayment and recoupment request. It can also unnecessarily force the provider into the appeals process, which can be expensive and time consuming.
5. Collect the records and do not send the request to a medical record vendor. Responding to an auditor’s medical records request is different than responding to a request made for other purposes and it should not be put in the hands of a record vendor.
6. Once the records are collected, ensure they are complete. One of the most common errors providers make is sending incomplete records. This can have devastating consequences because the auditor may conclude that the records do not exist and/or the care was not provided and refer the matter to regulatory bodies to consider whether there is fraud, waste, and abuse.
7. Do not include extraneous or irrelevant records. Do not send the entire electronic medical record unless it is requested. Sending unnecessary records such as nursing flowsheets and administrative forms can complicate the review process and potentially raise questions about compliance practices.
8. Be sure the records are legible. The goal is to make it easy for the auditor to find the information in the records that justifies the claim paid for that service. Do not submit a printed and scanned copy of the records because they are often illegible, and the auditor will have a more difficult time finding the necessary information.
9. Organize the records. Do not send a pile of unorganized records without any context or explanation. This can make the audit process needlessly challenging. Organize and label records in a logical manner that demonstrates the office is managed well, has a commitment to regulatory compliance, and can be trusted to provide accurate claims for payment.
10. Review the records for any potential issues that the auditor may find. Identify any errors (incorrect patient or date of service) or omissions (missing signatures). Never modify or alter records in response to audit requests. It is imperative to maintain the integrity of the medical records and produce them in the original, unaltered state. Any attempts to manipulate, falsify, or add documentation can create exposure to severe legal consequences. While records cannot be altered, any issues can be identified and explained to the auditor in the cover letter to mitigate potential concerns. This review can also reveal risk exposure and provide information about whether to engage legal counsel before submitting the records.
11. Draft a cover letter to send with the record production. Include sufficient information that identifies the date of the records request, the date the records are submitted, and a description of what records are being submitted. In the cover letter, send a message of transparency to the auditor. Avoid any defensiveness or indication that you do not want the auditor to see the medical records. They have a right to see the records that support your claims, either through regulations or by contract.
12. IMPORTANT. Keep a copy of the cover letter and a complete copy of the exact records produced in case an appeal is necessary in the future.
13. When the audit results are received, review them and if an overpayment is noted, immediately contact a member of Hancock Daniel’s Reimbursement Team to help determine whether an appeal would be appropriate.

Click here for a full PDF version of this advisory.

The information contained in this advisory is for general educational purposes only. It is presented with the understanding that neither the author nor Hancock, Daniel & Johnson, P.C., is offering any legal or other professional services. Since the law in many areas is complex and can change rapidly, this information may not apply to a given factual situation and can become outdated. Individuals desiring legal advice should consult legal counsel for up-to-date and fact-specific advice. Under no circumstances will the author or Hancock, Daniel & Johnson, P.C. be liable for any direct, indirect, or consequential damages resulting from the use of this material.