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Surgeon pays price for defaulting on loan deal
A surgeon has agreed to work at an underserved hospital in Arizona for the next three years as part of a deal to work off half of $1.07 million in unpaid medical school loans, interest and treble damages she incurred by defaulting on a federal loan-forgiveness program.
The U.S. Attorney’s Office in Maryland filed the action against Dr. Anathea C. Powell on July 10, in U.S. District Court in Greenbelt, for defaulting on the National Health Service Corps scholarships she used for medical school.
Powell received less than $160,000 from the program while attending medical school between 2000 and 2003.
Under the settlement filed on Aug. 22, she agreed to work 1,095 days as a general surgeon at the Phoenix Indian Medical Center, an Indian Health Service hospital. She began a full-time clinical practice on July 29, working a minimum of 40 hours a week for at least 45 weeks per year. The consent order stipulates that no more than eight hours per week may be spent on non-clinical duties like research or teaching, and time spent “on call” does not count toward the settlement.
At the same time, Powell must repay the government $539,959 — half the amount the government claimed was due — in $4,500 monthly increments over the next 10 years.
According to the agreement, failing to meet the conditions at any point will trigger an immediate request for what remains of the full $1.07 million.
Powell, reached by phone on Thursday at the Phoenix Indian Medical Center, declined to comment on the case.
Maryland U.S. Attorney Rod J. Rosenstein said the “creative” settlement might deter others who use federal scholarship money without living up to the commitments.
“This is important because the government gave the scholarship to Dr. Powell, and someone else didn’t get it,” Rosenstein said. “You don’t go to jail for breaking this contract, but you do have to pay it back.”
The program was designed to bring primary health care providers to areas with limited access to care. In exchange for paying off her student loans, the program required Powell to work for three years in an underserved area.
The Phoenix Indian Medical Center “is the kind of place that she would have been working at if she had fulfilled her obligation,” Rosenstein said.
According to court documents, Powell took the loan for three of the four years she attended medical school at Boston University. After graduating in 2004, she entered a general surgery residency.
That violated the terms of the scholarship, because surgery is not an eligible specialty under the NHSC program. The program requires that participants pick a specialty that will benefit underserved communities, areas such as obstetrics, family medicine or pediatrics.
The U.S. Department of Health and Human Services, which runs the NHSC, notified Powell that she was in default and would need to repay the scholarship amount, $158,981, by July 1, 2005.
Powell did not do so, the government’s lawsuit claimed.
Under the terms of the NHSC contract, treble damages applied in default cases, so when Rosenstein’s office filed the lawsuit, the initial scholarship jumped to $476,943, with an additional $602,975 in interest.
Her 10-year repayment plan will cover half that amount, and the remaining half will be worked off at the Phoenix hospital.
A biography of Powell, published after she won the American Medical Association Foundation’s 2009 Leadership Award, said she was completing a three-year surgical oncology research fellowship at the National Cancer Institute and was a general surgery resident at the New York University School of Medicine.
She listed her policy interests as “bringing essential surgical services to underserved populations in the United States and abroad.” She is also reportedly active with the American College of Surgeons and its volunteerism section, Operation Giving Back.
UNITED STATES OF AMERICA V. POWELL
Court:
U.S. District Court, Greenbelt
Case No.:
8:12-cv-02047-RWT
Judge:
Roger W. Titus
Outcome:
Consent judgment $1.07M, with half to be repaid in 120 monthly installments of $4,500 and half to be forgiven through three years of service at Phoenix Indian Medical Center.
Dates:
Event: School years 2000-2003
Suit filed: July 10, 2012
Judgment: Aug. 22, 2012
Plaintiffs’ Attorneys:
Thomas F Corcoran, Office of the United States Attorney.
Defendant’s Attorney:
No appearances entered.
Counts:
Student loan contract violations.
