2. Background. On October 10, 1997, the President signed P.L. 105-61, reauthorizing the Federal Physicians Comparability Allowance until September 30, 2000. This Act extends authority to pay annual bonuses for Federal physicians serving in areas or specialties with documented recruitment and retention problems.

3. Due Date. Agencies must submit the requested data by May 29, 1998. FY 1999 PCA Plans must be submitted by September 15, 1998.

4. Termination Date. This Bulletin will terminate as soon as the requested data have been submitted.

Franklin D. Raines
Director

Attachments

ATTACHMENT A

Agencies with currently approved PCA Plans

Agencies that have employed or now employ physicians eligible for PCA

NOTE: Agencies not listed that employ physicians eligible for PCA are also covered by this Bulletin.

ATTACHMENT B

Physicians Comparability Allowance (PCA) Report and Worksheets

Authority.

Coverage. This Bulletin covers all agencies that employ physicians eligible for PCA. This includes both agencies with currently approved PCA plans that are eligible to pay PCA bonuses, whether or not they actually do pay the bonuses, and agencies without approved plans that employ physicians eligible for PCA. Attachment A lists those agencies that currently have an approved PCA plan, as well as agencies that do not currently have an approved plan but are known to have employed physicians eligible for PCA. Agencies not listed that employ physicians eligible for PCA are still covered by this Bulletin.

Submission Requirement. (1) Each agency should review and update the 1997 PCA reporting worksheet submitted by that agency. (Copies of the 1997 data have been given to the appropriate OMB staff. Agencies should contact their OMB examiners if they need a copy of the 1997 data.) Please verify that all FY 1994 - FY 1997 figures in the worksheet are correct and add a new column providing FY 1998 estimates. See below for instructions on how to calculate figures.

Information Contact: Inquiries should be addressed to Melany Nakagiri, telephone (202) 3954926.

Instructions for Preparing Worksheets

General guidance

Definitions-General

Definitions-Physician Categories

Description Worksheets to Be Submitted to OMB

(1) Total Number Employed: The total number of agency physicians eligible for PCA (includes all eligible physicians, whether or not they actually received PCA bonuses) should be supplied for the fiscal years 1994, 1995, 1996, 1997, and 1998 in Part 1. The total number of agency physicians actually receiving or expected to receive PCA should be supplied for the fiscal years 1994, 1995, 1996, 1997, and 1998 in Part II. The same data should be provided by category for each of the fiscal years.

(2) Number of Physicians Signing One-Year and Two-Year PCA: Under the PCA program, physicians may elect to sign a one-year or two-year PCA service agreement. For those physicians actually receiving or expected to receive PCA (Part II), the number of physicians signing one-year and two-year agreements should be supplied for each fiscal year.

(3) Average Compensation per Physician: Average annual compensation per physician should exclude the PCA bonus, but include base pay and all other bonuses and awards. The average compensation for agency physicians eligible for PCA should be supplied for the fiscal years 1994. 1995, 1996, 1997, and 1998 in Part I. The average compensation for agency physicians actually receiving or expected to receive PCA should be supplied for the fiscal years 1994, 1995, 1996, 1997, and 1998 in Part II. The same data should also be provided by category for each fiscal year.

(4) Average PCA Amount per Physician, by Category: The average annual PCA bonus paid per physician for all categories, as well as for each individual category of physician, should be supplied for each fiscal year in Part II.

(5) Average PCA Amount per Physician, by Length of Service Agreement: The average annual PCA bonus paid per physician should be supplied for physicians with a one-year service agreement and two-year service agreement and for each fiscal year in Part II.

(6) Average PCA Amount per Physician, by Length of Federal Service: The average annual PCA bonus paid per physician with (a) less than two years creditable Federal service, and (b) two or more years creditable Federal service, should be supplied for each fiscal year in Part II.

(7) Average Number Years Continuous Service: The average number of years of continuous creditable Federal service as a physician for those eligible (Part I) and actually receiving or expected to receive PCA (Part II) should be supplied for each fiscal year. The average should be calculated as of the end of the fiscal year in question (e.g. for an agency with one eligible physician who began Federal service as a physician under the General Schedule on October 1, 1996, would have one-year creditable Federal service for purposes of PCA for fiscal year 1998).

(8) Number of Accessions: The total number of accessions for all physicians (Part 1) and for those receiving PCA (Part II) should be supplied for each fiscal year. The number of accessions by category for each fiscal year should also be supplied.

(9) Number of Separations: The total number of separations for all physicians (Part I) and for those receiving PCA (Part II) should be supplied for each fiscal year. The number of separations by category for each fiscal year should also be supplied.

(10) Number of Unfilled Full-Time Equivalent Physician Positions: The number should be equivalent to the total number of physician positions for which the agency has budgeted for the fiscal year in question less the number of physicians on-board during the fiscal year. For example, the agency may have budgeted for 12 full-time equivalent physician positions for the prior fiscal year, but had only 9.5 physicians on-board for the entire year (9 physicians on-board the entire year, and one on-board for six-months of the year). The number of unfilled full-time equivalent physician positions in this case is equal to 2.5.

The total number for all physicians (Part I) and for those receiving PCA (Part II) should be supplied for each fiscal year. The number by category for each fiscal year should also be supplied.

(11) Average Length of Time Physician Positions Remained Unfilled: The time should be reported in months as of the end of the fiscal year (e.g., as of the end of the prior fiscal year the average length of time vacant physician positions remained unfilled might be 13 months, and for the current fiscal year it may have declined to an average of 8 months). Only the time during which the agency was actively searching for candidates should be counted. The total number for all physicians (Part I) and for those receiving PCA (Part II) should be supplied for each fiscal year. The number by category for each fiscal year should also be supplied.

UNITED STATES
OFFICE OF PERSONNEL MANAGEMENT'
WASHINGTON. D.C. 20415

JULY 18, 1997

OFFICE OF THE DIRECTOR

Honorable Newt Gingrich
Speaker of the House of Representatives
Washington, DC 20515

Dear Mr. Speaker:

The purpose of this letter is to transmit a report on Physicians Comparability Allowances (PCA's), as required by section 5948(j) of title 5, United States Code. The report was prepared by the Office of Management and Budget using data gathered from those agencies with approved plans.

The enclosed report describes which agencies have entered into PCA agreements, the recruiting and retention problems justifying their use, the number of physicians entering into PCA agreements and the duration of the agreements, the size of the allowances provided, and the degree to which recruitment and retention problems are alleviated by the allowance.

The report also recommends a simple 3-year reauthorization of the PCA authority to September 30, 2000. Under the current PCA authority (5 U.S.C. 5948), no PCA service agreement may be entered into later than September 30, 1997.

Enclosure

Presidential Report on the Physicians Comparability Allowance

Introduction

Public Law 103-114 requires the President to report to Congress on the operation of the Physicians Comparability Allowance (PCA), including information on:

• which agencies use the allowance;
• the nature and extent of recruiting and retention problems justifying the use of the allowance by each agency;
• number of physicians with whom agreements were entered into by each agency;
• size of the allowances and duration of the agreements;
• and the degree to which the allowance alleviates recruiting and retention problems.

To prepare this report, the Office of Management and Budget (OMB) asked all agencies with PCA eligible physicians to provide data on:

• number of physicians they employ, type of work they do (clinical research, occupational health or disability evaluation), how many are eligible for the allowance and how many actually receive it;
• average compensation (excluding PCA) of physicians receiving and not receiving the allowance, size of the average PCA, and size of allowances provided to eligible physicians by category of work and length of PCA agreement;
• average number of years of continuous service per physician, number of accessions and separations the agency experienced, number of unfilled physician positions and average length of time positions were vacant;
• descriptions of the physicians' work, and recruiting and retention problems justifying payment of PCA.

Using these data, the report describes the use of PCA by Federal agencies. It also addresses the Federal physician recruiting and retention situation, and the effectiveness of PCA in improving the situation.

Reauthorization of PCA

Under 5 U.S.C. 5948, the current PCA authority extends to September 30, 1997. Based on information presented in this and previous reports to Congress, PCA has been effective in assisting Federal agencies to address recruitment and retention problems for physicians. Consistent with these findings, the Administration supports a simple, 3-year reauthorization of PCA to September 30, 2000. The simple reauthorization will allow OMB and the Office of Personnel Management (OPM) to continue to monitor the impact of PCA on the recruitment and retention of Federal physicians.

Background

The Physicians Comparability Allowance authorizes agencies documenting severe recruitment and retention problems to pay annual bonuses to physicians, up to $14,000 per year for physicians with less than two years Federal service and up to $20,000 for physicians with more than two years Federal service. PCA was originally authorized by P.L. 95-603 in 1978 (5 U. S. C. 5 94 8) and has been reauthorized a number of times, including 1979, 1981, 1983, 1987, 1990 and 1993. Most of the reauthorizations were simple extensions of the PCA authority. The 1987 reauthorization doubled the maximum allowable bonuses to the current 1evels.

PCA is authorized only to solve severe, documented physician recruitment and retention problems. For the purpose of this allowance, severe recruitment and retention problems are considered to exist if all of the following conditions exist: long-lasting position vacancies; high turnover rates in positions requiring well-qualified physicians; applicants do not have the superior qualifications necessary for the position; and existing vacancies cannot be f:illed with well-qualified candidates without PCA. Some agencies use alternative programs to improve recruitment and retention of physicians such as the physician special pay authority under title 38, United States Code, that are not covered by this report.

Summary of PCA Usage Throughout the Federal Government

Table 1. Number and Compensation of Federal Physicians Receiving PCA

As of FY 1996, the last year for which we have complete data, 1,841 physicians in Federal employment received PCA, out of 2,402 who were eligible. The average allowance paid was $15,765. The largest users of PCA were the Department of Health and Human Services (HHS), which gave bonuses to 1,019 physicians and the Department of Defense, which gave bonuses to 487 physicians.

The recruiting and retention problems that justify the allowance vary greatly. Some agencies require physicians with special expertise such as aeronautics or agriculture. Other agencies require physicians to live and work in remote areas. Still other agencies suffer difficulties because local non-Federal competition for physicians has driven salaries past the standard government pay scale.

The percentage of physicians receiving PCA has risen from FY 1994 to FY 1996, but estimates for FY 1997 indicate a decline from FY 1996. The average compensation (excluding PCA) for physicians has risen consistently over the years, and estimates for FY 1997 indicate this trend will continue. From FY 1994 to FY 1997, PCA has constituted roughly 17% of the income of the physicians who receive the allowance.

Table 2. Data on Number and Compensation of Federal Physicians by Length of Agreement