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42 U.S. Code § 1395ccc. Offset of payments to individuals to collect past-due obligations arising from breach of scholarship and loan contract
(a) In general
(1)
(A)
Subject to subparagraph (B), the Secretary shall enter into an agreement under this section with any individual who, by reason of a breach of a contract entered into by such individual pursuant to the National Health Service Corps Scholarship Program, the Physician Shortage Area Scholarship Program, or the Health Education Assistance Loan Program, owes a past-due obligation to the United States (as defined in subsection (b)).
(B) The Secretary shall not enter into an agreement with an individual under this section to the extent—
(i)
(I)
the individual has entered into a contract with the Secretary pursuant to section 204(a)(1) of the Public Health Service Amendments of 1987, and
(II)
the individual has fulfilled or (as determined by the Secretary) is fulfilling the terms of such contract; or
(ii)
the liability of the individual under such section 204(a)(1) has otherwise been relieved under such section; or
(iii)
the individual is performing such physician’s [1] service obligation under a forbearance agreement entered into with the Secretary under subpart II of part D of title III of the Public Health Service Act [42 U.S.C. 254d et seq.].
(2) The agreement under this section shall provide that—
(A)
deductions shall be made from the amounts otherwise payable to the individual under this subchapter, in accordance with a formula and schedule agreed to by the Secretary and the individual, until such past-due obligation (and accrued interest) have been repaid;
(B)
payment under this subchapter for services provided by such individual shall be made only on an assignment-related basis;
(C) if the individual does not provide services, for which payment would otherwise be made under this subchapter, of a sufficient quantity to maintain the offset collection according to the agreed upon formula and schedule—
(i)
the Secretary shall immediately inform the Attorney General, and the Attorney General shall immediately commence an action to recover the full amount of the past-due obligation, and
(ii)
subject to paragraph (4), the Secretary shall immediately exclude the individual from the program under this subchapter, until such time as the entire past-due obligation has been repaid.