Health Care Provider Shortage Minimization Act of 2025
- Sponsor
- Rep. Carter, Earl L. "Buddy" [R-GA-1]
- Committees
- Ways and Means Committee (primary)
- Last action
- Feb 10, 2025
Bottom line
The bill clarifies the independent contractor status of temporary healthcare providers to reduce administrative burdens and encourage their use in addressing healthcare shortages.
What it actually does
This bill amends the Internal Revenue Code of 1986 to explicitly classify qualified locum tenens physicians and advanced care practitioners as independent contractors for federal tax purposes. It specifies that these individuals, the entities they work for, and any contracting agencies will not be treated as employers or employees, and their remuneration will not be considered employment income, provided they meet certain criteria including a temporary service period and a written contract.
Proponents argue
Supporters argue that clarifying the independent contractor status for locum tenens providers will reduce administrative and tax complexities for both providers and healthcare facilities, making it easier and more attractive for these professionals to fill temporary staffing gaps, especially in underserved areas. This, they contend, will help alleviate physician and advanced care practitioner shortages and improve access to care.
Opponents contend
Opponents might argue that this classification could strip temporary healthcare providers of certain employee benefits and protections, such as employer-sponsored health insurance, retirement contributions, and unemployment benefits, shifting more financial risk onto the individual. They may also raise concerns about potential impacts on federal tax revenue due to changes in payroll tax obligations.
The bill is very short and clear, making it highly accessible for a reader to understand its core provisions quickly.
Section 2(a), adding new Section 3513 to Chapter 25 of the Internal Revenue Code of 1986
Clarification of Independent Contractor Status for Locum Tenens Providers
This provision establishes that qualified locum tenens physicians and advanced care practitioners are to be treated as independent contractors, not employees, for federal tax purposes. This means that neither the healthcare facilities utilizing their services nor any agencies contracting with them will be considered employers, and the payments made to these providers will not be subject to employment-related taxes or obligations. This aims to streamline the engagement of temporary medical staff.
Supporters argue
Supporters argue this provision removes ambiguity and reduces the administrative and financial burden on healthcare providers and facilities, making it easier to utilize temporary staff to address critical shortages, especially in rural and underserved communities. It provides certainty for a common staffing model.
Critics contend
Critics might contend that this explicit classification could lead to a reduction in benefits and protections for these healthcare professionals, as independent contractors typically do not receive employer-sponsored health insurance, paid leave, or contributions to social security and Medicare from the hiring entity, potentially making the profession less attractive for some.
Tradeoffs
The bill balances the desire to ease staffing shortages and reduce administrative overhead for healthcare facilities against potential concerns regarding worker protections and benefits for locum tenens professionals. It also navigates the tension between simplifying tax compliance and the broader implications for the gig economy and worker classification.
The definition of a 'qualified locum tenens physician or advanced care practitioner' includes a limitation that services must be performed for 'not more than one continuous year at a site of service.'
Section 2(b)(1)(A)
Why it matters:This is standard legislative practice for defining terms and their limitations within a bill. It's a necessary boundary for the independent contractor classification.
Case for: This limitation ensures that the independent contractor status is applied only to genuinely temporary assignments, preventing its misuse for long-term, effectively permanent positions that should be classified as employment.
Case against: Some might argue that a one-year limit could be arbitrary or too restrictive for certain long-term temporary needs, potentially forcing facilities to rotate providers more frequently than necessary or to hire them as employees when a temporary independent contractor arrangement would be more suitable.
Estimated impact: This clause defines the scope of the bill's application, ensuring that only truly temporary engagements (up to one year) qualify for the independent contractor tax treatment.