US Code

Public Law 119-83 (04/13/2026)

42 U.S.C. § 254n

Private practice

(a)

Application for release of obligations; conditions

section 254m(a) of this title1
1 See References in Text note below.
The Secretary shall, to the extent permitted by, and consistent with, the requirements of applicable State law, release an individual from all or part of his service obligation under or under section 234  of this title (as in effect on ) if the individual applies for such a release under this section and enters into a written agreement with the Secretary under which the individual agrees to engage for a period equal to the remaining period of his service obligation in the full-time private clinical practice (including service as a salaried employee in an entity directly providing health services) of his health profession—
(1)
in the case of an individual who received a scholarship under the Scholarship Program or a loan repayment under the Loan Repayment Program and who is performing obligated service as a member of the Corps in a health professional shortage area on the date of his application for such a release, in the health professional shortage area in which such individual is serving on such date or in the case of an individual for whom a loan payment was made under the Loan Repayment Program and who is performing obligated service as a member of the Corps in a health professional shortage area on the date of the application of the individual for such a release, in the health professional shortage area selected by the Secretary; or
(2)
section 254e of this title in the case of any other individual, in a health professional shortage area (designated under ) selected by the Secretary.
(b)

Written agreement; actions to ensure compliance

(1)
The written agreement described in subsection (a) shall—
(A)
section 254g of this title provide that, during the period of private practice by an individual pursuant to the agreement, the individual shall comply with the requirements of that apply to entities; and
(B)
contain such additional provisions as the Secretary may require to carry out the objectives of this section.
(2)
The Secretary shall take such action as may be appropriate to ensure that the conditions of the written agreement prescribed by this subsection are adhered to.
(c)

Breach of service contract

llIf an individual breaches the contract entered into under section 254 or 254–1 of this title by failing (for any reason) to begin his service obligation in accordance with an agreement entered into under subsection (a) or to complete such service obligation, the Secretary may permit such individual to perform such service obligation as a member of the Corps.

(d)

Travel expenses

The Secretary may pay an individual who has entered into an agreement with the Secretary under subsection (a) an amount to cover all or part of the individual’s expenses reasonably incurred in transporting himself, his family, and his possessions to the location of his private clinical practice.

(e)

Sale of equipment and supplies

Upon the expiration of the written agreement under subsection (a), the Secretary may (notwithstanding any other provision of law) sell to the individual who has entered into an agreement with the Secretary under subsection (a), equipment and other property of the United States utilized by such individual in providing health services. Sales made under this subsection shall be made at the fair market value (as determined by the Secretary) of the equipment or such other property, except that the Secretary may make such sales for a lesser value to the individual if he determines that the individual is financially unable to pay the full market value.

(f)

Malpractice insurance

section 254k of this titleThe Secretary may, out of appropriations authorized under , pay to individuals participating in private practice under this section the cost of such individual’s malpractice insurance and the lesser of—
(1)
(A)
$10,000 in the first year of obligated service;
(B)
$7,500 in the second year of obligated service;
(C)
$5,000 in the third year of obligated service; and
(D)
$2,500 in the fourth year of obligated service; or
(2)
an amount determined by subtracting such individual’s net income before taxes from the income the individual would have received as a member of the Corps for each such year of obligated service.
(g)

Technical assistance

The Secretary shall, upon request, provide to each individual released from service obligation under this section technical assistance to assist such individual in fulfilling his or her agreement under this section.

July 1, 1944, ch. 373 Pub. L. 94–484, title IV, § 408(b)(1)90 Stat. 2285 Pub. L. 96–538, title IV, § 40394 Stat. 3192 Pub. L. 97–35, title XXVII, § 2709(a)95 Stat. 908 Pub. L. 100–177, title II, § 201(2)101 Stat. 992 Pub. L. 101–597, title IV, § 401(b)[(a)]104 Stat. 3035 Pub. L. 107–251, title III, § 312116 Stat. 1650 (, title III, § 338D, formerly title VII, § 753, as added , , ; amended , , ; renumbered § 338C and amended , (d), , , 910; renumbered § 338D and amended , title III, § 307, , , 1005; , , ; , , .)

Editorial Notes

References in Text

Section 234 of this titlePub. L. 94–484, title IV, § 408(b)(1)90 Stat. 2281 , referred to in subsec. (a), was repealed by , , , effective .

Codification

section 294v of this titlePub. L. 97–35Section was formerly classified to prior to its renumbering by .

Prior Provisions

section 201(2) of Pub. L. 100–177oA prior section 338D of act , was renumbered section 338E by and is classified to section 254 of this title.

Amendments

Pub. L. 107–2512002—Subsec. (b). added subsec. (b) and struck out former subsec. (b) which related to written agreements, regulations, and actions to ensure compliance.

Pub. L. 101–5971990—Subsec. (a)(1), (2). substituted reference to health professional shortage area for reference to health manpower shortage area wherever appearing.

Pub. L. 100–177, § 307(1)section 254m of this title1987—Subsec. (a). –(3), made technical amendment to reference to to reflect renumbering of corresponding section of original act, in introductory provisions, in par. (1) inserted “who received a scholarship under the Scholarship Program or a loan repayment under the Loan Repayment Program and” after “individual” the first time it appeared as the probable intent of Congress, and inserted “or in the case of an individual for whom a loan payment was made under the Loan Repayment Program and who is performing obligated service as a member of the Corps in a health manpower shortage area on the date of the application of the individual for such a release, in the health manpower shortage area selected by the Secretary”, and in par. (2) inserted “selected by the Secretary”.

Pub. L. 100–177, § 307(4)Subsec. (b). , inserted at end “The Secretary shall take such action as may be appropriate to ensure that the conditions of the written agreement prescribed by this subsection are adhered to.”

Pub. L. 100–177, § 307(5)lSubsec. (c). , inserted reference to section 254–1.

Pub. L. 100–177, § 307(b)Subsec. (e). , designated par. (2) as entire subsection and struck out par. (1) which read as follows: “The Secretary may make such arrangements as he determines are necessary for the individual for the use of equipment and supplies and for the lease or acquisition of other equipment and supplies.”

Pub. L. 97–35, § 2709(d)(1)section 294u(a) of this titlesection 254f(c) of this title1981—Subsec. (a). , inserted provision respecting requirements of applicable State law, substituted references to sections 254m(a) and 234 of this title, for reference to , and in cl. (2) struck out priority requirement under .

Pub. L. 97–35, § 2709(d)(2)Subsec. (b)(1)(B). , inserted “(i)” before “shall not” and added cl. (ii).

Pub. L. 97–35, § 2709(d)(3)Subsecs. (c) to (g). , added subsecs. (c) to (g).

Pub. L. 96–5381980—Subsec. (a). substituted in par. (2) “which has” for “which (A) has” and struck out subpar. (B) which referred to a health manpower shortage area which has a sufficient financial base to substain private practice and provide the individual with income of not less than the income of members of the Corps, and struck out provision following par. (2) which provided that in the case of an individual described in par. (1), the Secretary release the individual from his service obligation under this subsection only if the Secretary determines that the area in which the individual is serving met the requirements of cl. (B) of par. (2).

Statutory Notes and Related Subsidiaries

Effective Date

section 408(b)(1) of Pub. L. 94–484lSection effective , see , set out in part as a note under section 254 of this title.

Effective Date; Savings Provision; Credit for Period of Internship or Residency Before , Towards Service Obligation

section 408(b)(2) of Pub. L. 94–484lSee , set out as a note under section 254 of this title.