Health Care Provider Shortage Minimization Act of 2025

Bill Number

H.R. 1160

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Taxation

Status

Introduced

Latest Action

2025-02-10: Referred to the House Committee on Ways and Means.

Last Updated

2026-07-07T08:05:25Z

AI-Generated Summary

Purpose

The Health Care Provider Shortage Minimization Act of 2025 aims to address physician shortages, particularly in underserved areas, by clarifying the tax treatment of temporary healthcare workers known as "locum tenens" physicians and advanced care practitioners. It ensures these professionals are treated as independent contractors (self-employed individuals, not employees) under federal tax law, reducing administrative burdens on healthcare facilities and encouraging more flexible staffing.

Key Provisions

• Tax Treatment Clarification: Adds a new section (Section 3513) to Chapter 25 of the Internal Revenue Code of 1986, stating that for tax purposes:
• Locum tenens physicians and advanced care practitioners are not considered employees.
• Healthcare facilities, contracting agencies, or payers (those who pay for services) are not treated as employers.
• Payments for these services are not classified as wages subject to employment taxes (e.g., Social Security, Medicare withholding).
• Definition of Qualified Individuals:
• Must provide temporary services at a single site for no more than one continuous year.
• Includes licensed doctors of medicine, osteopathy, dental surgery, dental medicine, podiatry, or optometry; physicians as defined under Social Security Act or federal employee health laws; and advanced care practitioners (nurse practitioners, physician assistants, or certified registered nurse anesthetists).
• Services must be under a written contract explicitly stating the individual is not an employee for tax purposes.
• Effective Date: Applies to services performed after the date of enactment.

Significant Changes to Existing Law

• Prior to this bill, the tax status of locum tenens workers could be ambiguous, potentially leading to disputes over whether they are employees (requiring employers to withhold and pay employment taxes) or independent contractors (where workers handle their own taxes). This legislation explicitly codifies them as independent contractors for federal tax obligations, eliminating uncertainty and aligning with common industry practices.
• No changes to state laws or non-tax employment regulations; focuses solely on federal income tax treatment.

Potential Impacts

• On Government Agencies: The Internal Revenue Service (IRS) may see simplified enforcement and fewer audits related to worker classification, but could experience reduced revenue from employment taxes on these services. No direct impact on other agencies like the Department of Health and Human Services.
• On Citizens: Improves access to healthcare in underserved or rural areas by making it easier and cheaper for facilities to hire temporary providers, potentially reducing wait times and addressing shortages without increasing costs to patients.
• On International Relations: None apparent; the bill is domestic and focused on U.S. tax and healthcare policy.

Main Stakeholders Affected

• Locum Tenens Physicians and Advanced Care Practitioners: Gain clearer independent contractor status, simplifying their tax filing (e.g., self-employment taxes via Schedule C) and allowing more flexibility in taking short-term assignments.
• Healthcare Facilities and Hospitals: Benefit from lower administrative costs (no need to withhold taxes or provide benefits), enabling faster hiring to fill gaps, especially in rural or shortage areas.
• Contracting Agencies: Avoid employer tax liabilities, making it easier to place workers.
• Patients and Underserved Communities: Indirectly helped through better-staffed clinics and hospitals.
• Taxpayers and IRS: Shift in tax collection from employment taxes to self-employment taxes, with potential for overall revenue neutrality.

Notable Legal, Constitutional, or Political Implications

• Legal: Reinforces the common-law tests for employee vs. independent contractor status (e.g., behavioral control, financial risk) but provides a safe harbor specifically for locum tenens roles, reducing litigation risk under IRS rules. Does not override other labor laws (e.g., Fair Labor Standards Act for overtime).
• Constitutional: No apparent issues; falls within Congress's authority to regulate taxation under Article I, Section 8 of the U.S. Constitution.
• Political: Supports bipartisan efforts to tackle healthcare workforce shortages, potentially appealing to rural and conservative districts. Could face opposition from labor groups concerned about worker protections, though the bill maintains existing non-tax employee rights.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Carter, Earl L. "Buddy" [R-GA-1]

Cosponsors (9)

Rep. Dunn, Neal P. [R-FL-2], Rep. Tenney, Claudia [R-NY-24], Rep. Crenshaw, Dan [R-TX-2], Rep. Weber, Randy K. Sr. [R-TX-14], Rep. Grothman, Glenn [R-WI-6], Rep. Moore, Blake D. [R-UT-1], Rep. Owens, Burgess [R-UT-4], Rep. Van Orden, Derrick [R-WI-3], Rep. Onder, Robert F. [R-MO-3]

Recent Actions

• 2025-02-10: Referred to the House Committee on Ways and Means.
• 2025-02-10: Introduced in House
• 2025-02-10: Introduced in House

Bill Versions

• Health Care Provider Shortage Minimization Act of 2025 — issued 2025-02-10 — PDF (4 pages)