Tax Incentives Aim to Attract Primary Care Preceptors

June 14, 2016 06:34 pm Michael Laff

A shortage of primary care physicians means fewer physicians to train the next generation for primary care, an equation that three states are trying to change by offering tax incentives.  

David Stewart, M.D., (left) chair of the University of Maryland School of Medicine's Department of Family and Community Medicine, consults with a patient while medical student Jonathan King observes.

With a focus on medically underserved areas, Maryland and Colorado have followed Georgia's lead of offering tax breaks to physicians who serve as preceptors to medical students. Preceptors are not always compensated, but state officials realized that boosting the primary care workforce requires new strategies.

All three states offer a $1,000 tax credit for qualifying physicians to serve as preceptors. The legislation passed first in Georgia in 2014, and then in Colorado and Maryland this year. Each state focused its measure on a particular need.

Kentucky and South Carolina considered, but did not pass, similar legislation.

In Maryland there are three medical schools -- the University of Maryland, Johns Hopkins University and the Uniformed Services University -- yet the state ranks last nationally in the number of medical students who choose to enter primary care. The state needs more primary care physicians in underserved areas, said Richard Colgan, M.D., vice chair for medical student education at the University of Maryland School of Medicine and a member of the Maryland AFP.  

Story Highlights
  • Georgia passed the first program to give primary care preceptors a tax credit of $1,000 in 2014; Maryland and Colorado launched similar programs this year.
  • Maryland physicians who serve as preceptors can receive a maximum credit of $10,000 annually.
  • In Colorado, the measure is intended to correct an imbalance in where physicians practice.

The state's preceptor tax incentive increases access to care in those areas and helps bolster primary care training.

"We are the state medical school, so it is incumbent upon us to do everything we can to promote more interest in primary care among medical students," Colgan said. "We also have a lot of underserved areas throughout the state and in Baltimore."

The program's goal is to increase the number of preceptors from the current 150 to 250. Maryland physicians who serve as preceptors can receive a credit of $1,000 per student up to a maximum of $10,000 annually. They must provide at least 12 weeks of clinical training to be eligible for the tax incentive.

"The preceptors are in it because they love the art of teaching and they love primary care medicine," Colgan said.

The state is limiting the tax program to a maximum of $100,000 in payments during the first year. Colgan said the figure could be increased in subsequent years if there is greater demand for the program, which also provides tax credits to nurse practitioner preceptors.

Maryland began working on the tax credit after Denise Kornegay, the executive director of the Georgia Statewide Area Health Education Network who spearheaded the initiative in her state, spoke about it during a Health Resources and Services Administration webinar in 2015. Intrigued, the Maryland AFP invited her to speak at the Maryland Rural Health Association.

Colgan said multiple groups came to support the initiative, including primary care faculty, the state's primary care specialty societies, allied health professional associations and the state medical association.

Georgia's initiative also influenced officials in Colorado, where the tax measure was passed to increase access to care by correcting a geographic imbalance in the state.

Tamaan Osbourne-Roberts, M.D., president of the Colorado AFP, said family physicians are heavily concentrated in the state's urban areas, so rural areas have difficulty recruiting enough physicians to serve as preceptors. The new legislation provides rural preceptors with a $1,000 tax credit regardless of the number of students.

"In family medicine, particularly in rural areas, this is a large step forward," Osbourne-Roberts said.

Osbourne-Roberts has spent the majority of his career practicing throughout rural Colorado. When he left residency six years ago, the time he spent completing clinical rotations in rural areas influenced his decision about what kind of practice was right for him.

"I was able to see what the rural practice style was like, both the benefits and challenges," he said. "The practice style appealed to me, and I felt called to serve there."

Asking physicians to allow medical students to shadow them requires a substantial time commitment, and the tax incentive is meant to acknowledge that.

"What physicians want more than any financial incentive is to be valued and recognized for the work they do," Osborne-Roberts said. "Even though the tax credit is a nominal amount it says, 'We value it and we want (physicians) to keep doing that.'"

Colorado legislators were very explicit about their intent in offering the credits, which are also available to advance practice nurses, physician assistants and dentists -- but only in certain areas.

"A consistent problem is a lack of professional instruction, training and supervision in rural and frontier areas that allows students studying primary care to obtain the requisite professional mentoring and supervision," the law states.

The initiatives in Maryland and Colorado took shape after Georgia became the first state to pass a preceptor tax incentive program( That first program sprung from a conundrum posed by an influx of medical students from outside Georgia. Their sponsors were paying preceptors $3,000 to $6,000, and few of the students who took those slots remained in the state to practice.

At the same time, enrollment at the state's five medical schools had increased by 66 percent over the previous eight years. Forty percent of medical students were training in community-based settings and their preceptors were not compensated for the work.

"We were looking at how we could support primary care in Georgia and our third- and fourth-year rotations," said Kornegay, of the Georgia Statewide Area Health Education Network.

In 2014 the state provided $883,000 worth of tax incentives, the latest figures available, and there is no limit on how much the program will provide. Physicians receive a $1,000 tax credit for every 160 hours of training they provide, up to a maximum credit of $10,000. The incentive is available for preceptors in family medicine, internal medicine, pediatrics, emergency medicine, psychiatry, general surgery and obstetrics.

Kornegay acknowledged the Georgia tax credit cannot match what outside schools are paying, but the program encourages physicians to support students at their alma mater and help the state keep medical students from leaving.

"There are so many more students and all the schools need more rotations, so it gets overwhelming," Kornegay said. "If our state schools can't get sites to train students, then we become exporters."

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