Tuesday, December 5, 2023

Changes to California’s J-1 Waiver Program Have Significant Consequences for Healthcare Employers

The California Department of Health Care Access and Information (HCAI) recently announced a series of changes to California’s Conrad 30 J-1 exemption program that have important implications for California healthcare employers seeking to hire foreign physicians. Notably, specialists can now apply for a J-1 exemption at the same time as primary care physicians at the beginning of the application cycle. Previously, medical specialists in California were not allowed to apply for a waiver until July 1 for the fiscal year that began in October and ended in September. But by this point, most doctors have already completed their training and must obtain a waiver to ensure they can remain in the U.S. legally. Because California’s application deadlines have historically been so unfavorable to specialists, the large and populous state has often had no applicants fill its 30 allotted waiver spots.

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Fortunately, the HCAI has just changed its application process and is now accepting applications from both primary care physicians and specialists from October 1st to October 31st each year. This is a positive change that will allow more specialists to obtain a J-1 exemption through California’s J-1 exemption program. Additionally, this long-awaited change to California’s application cycle will bring more specialists to clinics and hospitals in medically underserved areas of California where hiring a U.S. physician is more difficult. The change also makes it more likely that all 30 waiver positions in California will be filled each year, providing much-needed relief to healthcare employers in the state.

Another change is that California’s J-1 waiver program prioritizes rural training sites. If all 30 J-1 exemption slots are not filled, a second application cycle will open from December 1, 2023 to December 31, 2023 during which HCAI will accept additional J-1 exemption applications. This makes it even less likely that any of California’s J-1 waiver slots will be wasted. Additionally, the hiring requirements of California’s J-1 waiver application will now be slightly less burdensome: employers will instead be required to provide evidence that they have attempted to hire a U.S. physician for the vacant position for a period of at least six months to a full year .

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While most of the changes are positive, one change will pose a problem for certain employers and J-1 physicians. To be eligible for a J-1 exemption based on the facility’s location in a medically underserved area (MUA) or population (MUP), the U.S. Department of Health and Human Services designation must have been updated within the last four years. However, none of California’s MUAs or MUPs have been updated in the last four years. In practice, the HCAI’s new requirement makes it impossible for J-1 exempt physicians to work in facilities located in areas designated as MUA or MUP only. Only facilities located in Health Professional Shortage Areas (HPSAs) and Mental Health Professional Shortage Areas (MHPSAs) for psychiatrists are eligible for California’s new requirement. Finally, unlike other states, California continues to not accept FLEX applications from physicians who wish to practice in areas that are not considered underserved. If an employer would like to sponsor a J-1 exempt physician who would work in a MUA/MUP but not an HPSA, the employer should contact Clark Hill to determine whether alternative options exist.

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