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

Clark Hill PLC

The California Department of Health Care Access and Information (HCAI) recently announced a series of changes to the California Conrad 30 J-1 waiver program that have important implications for healthcare employers in California that seek to hire foreign physicians. Most notably, specialist physicians may now apply for a J-1 waiver at the beginning of the application cycle at the same time as primary care physicians. Previously, California did not allow specialist physicians to apply for a waiver until July 1, for the fiscal year beginning in October and ending in September. Yet, by this point most physicians have already completed training and need to have obtained a waiver to ensure they can remain legally in the U.S. Because California’s application timeline was historically so unfavorable to specialists, it was common for the large and populous state not to fill its 30 allotted waiver slots.

Thankfully, the HCAI just changed its application procedure and will now accept applications from both primary care physicians and specialists from October 1 to October 31 of each year. This is a positive change that will enable more specialists to obtain J-1 waivers through the California J-1 waiver program. Moreover, this long-awaited change in 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 challenging. The change will also make it more likely that all 30 of California’s waiver slots 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 will give priority to rural practice sites. If all 30 J-1 waiver slots are not filled, a secondary application cycle will open from Dec. 1, 2023, to Dec. 31, 2023, in which the HCAI will accept additional J-1 waiver applications. This makes it even less likely that any of California’s J-1 waiver slots will be wasted. Furthermore, the California J-1 waiver application will now be slightly less burdensome in its recruitment requirements: employers will be required to provide evidence that they have attempted to recruit a U.S. physician for the vacant position for a period of at least six months instead of a full year.

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 waiver based on the facility’s location in a Medically Underserved Area (MUA) or Medically Underserved 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 were updated in the past four years. In practice, the HCAI’s new requirement makes it impossible for J-1 waiver physicians to work at any facilities that are in areas only designated as an MUA or MUP. Only facilities located in Health Professional Shortage Areas (HPSAs) and Mental Health Professional Shortage Areas (MHPSAs), for psychiatrists, will qualify under California’s new requirement. Finally, unlike other states, California will still not accept FLEX applications from physicians who plan to practice in areas that are not designated as underserved. If an employer wants to sponsor a J-1 waiver physician who would work in an MUA/MUP but not a HPSA, they should reach out to Clark Hill to determine if there are any alternative options.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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