Puerto Rico Senate President Thomas Rivera Schatz filed Senate Bill 1570, which would overhaul the island’s physician tax incentive program by requiring doctors who receive preferential tax treatment to participate in the government’s Vital health plan and keep an active role in hospitals or primary health centers. The measure amends the Incentives Code and extends a preferential fixed income tax rate of 12% for qualified medical professionals for 15 years.
The bill’s preamble says it aims to address the physician shortage, which lawmakers say has lengthened appointment wait times and strained medical offices and emergency rooms. Doctors would need a formal participation agreement to serve Vital beneficiaries and would annually certify meeting at least one practice requirement: hospital or community health center privileges with at least five in-person admissions or consultations per week; practicing exclusively in hospital or federally qualified health center settings; working under contracts or franchises serving hospitals; or serving in leadership and quality-improvement roles.
The Department of Health would designate "specialists in shortage" using standardized criteria and divide Puerto Rico into health regions with a written medical needs report. The rate on eligible income would rise from 4% to 12%, with the exemption on eligible dividends up to $250,000 annually retained. The 180-hour annual community service requirement would be eliminated.
Certain dental professionals would become eligible, and decrees could be extended another 15 years, for up to 30. Before new decrees are issued, the Treasury Department, the Department of Economic Development and Commerce, and the Fiscal Agency and Financial Advisory Authority must identify funding sources or mitigation measures and certify PROMESA and fiscal plan compliance.