Alabama lawmakers have set their sights on the state’s health crisis, filing legislation to support rural hospitals and incentivize physicians to work in underserved communities.

“When you look at rural health in Alabama, it is a very serious situation that we’re facing now and we are trying to find some ways to combat that,” said state Rep. Ed Oliver, R-Dadeville. “This issue is incredibly important to the legislature this year.”

Oliver is sponsoring one of two bills aimed at improving the health care crisis in rural Alabama. His bill, HB46, would fix existing legislation that currently prevents many doctors in rural communities from accessing tax credits meant for them.

Rep. Terri Collins, R-Decatur, is sponsoring HB86 to provide tax credits to donors who want to support rural hospitals, establishing a fund modeled on a program that was successful in Georgia.

Since 2010, 14 rural hospitals have closed in Alabama. And reports predict that more than half of the state’s 52 rural hospitals are at risk of closing, with 19 at an “immediate risk,” according to the Center for Healthcare Quality and Payment Reform.

Rural communities across Alabama have seen emergency rooms and hospitals shutter, while pediatricians, dentists and maternity care have disappeared in over a third of the state’s counties.

Collins said the closing of Thomasville Regional Medical Center led to this year’s focus on rural health.

“Our education groups realized that if we don’t keep healthcare in those rural areas, they’re going to have a harder time educating children,” Collins told AL.com. “I think our workforce areas know if we don’t have healthcare available, they’re not going to be able to recruit industry in.”

“I think that we’re getting a much better understanding of the need and Thomasville closing earlier this fall was what really created the push,” she added

Investing in rural hospitals

Collins’s bill would establish the Rural Hospital Investment Program so individual donors and businesses can receive a tax credit for contributions toward supporting hospital operations and direct care.

Donors would receive a 100% income tax credit, which would be pulled from both the general budget and education fund. The bill would cap the credits at $20 million for all donations through 2026, then raise the cap to $30 million later.

The bill would also establish a board within the Office of State Treasurer to help determine the eligibility of hospitals and oversee the program. Members would include staff from the Alabama Hospital Association, which helped shape the bill, modeling it after The Georgia Heart Hospital program.

That program was so successful from its inception in 2016 that Georgia exceeded its overall cap of donations, and raised the limit this year to $100 million to support 50 rural hospitals.

“It really engages the community, as well as individuals and businesses and corporations make contributions to help their local hospitals,” said Danne Howard, deputy director of the Alabama Hospital Association.

Howard said she heard from businesses familiar with the Georgia program who wanted to help in Alabama, so they added in a provision allowing corporations to make annual donations up to $500,000.

“It’s not going to solve all things that are wrong, or all of the financial strains and struggles, but it is something that could be helpful and make a big difference,” she said.

Rural Physicians

Alabama currently has a tax credit on the books allowing rural physicians to receive $5,000 in tax income credits.

The program is intended to help recruit more doctors to Alabama communities that often can’t compete with larger urban areas. But it is flawed, doctors say, as those working in some of the state’s most rural areas are unable to access it.

To qualify for the tax credit, doctors must work and reside in a community that has less than 25,000 people but with a hospital that has an emergency room. But many rural physicians are left out because their addresses are in communities without hospitals.

“Currently the law’s not defined very well,” said Oliver. “And as more and more hospitals close, it just makes no sense.”

Oliver’s bill would raise the credit to $10,000 and remove the language that doctors must live and work in a community with a hospital to qualify.

Oliver said he hopes the change would recruit more physicians to rural areas, but also make sure doctors who are already in rural or unincorporated communities are incentivized to stay.

In 2023, AL.com profiled Meghan Carpenter, a doctor based in Washington County who could not get the credit because she lived in an unincorporated community, though the hospital where she worked in Chatom — a town that measures about 10 square miles with 1,000 residents — was less than 10 miles from her home.

As an internal medicine specialist and pediatrician, she saw patients from across four counties and from Mississippi, where she has since relocated her practice, citing issues with the tax credit.

“We have a system that just makes it unsustainable for physicians, especially primary care physicians, to be in those rural areas,” said Nola Ernest, a pediatrician in Dothan and former president of the Alabama chapter of the Academy of Pediatrics. “And the tax credit issues are part of that.”

“It would definitely allow physicians to be a little more financially sustainable if they could apply for this tax credit without all of the current very specific details that you have to meet,” she added

Both bills have been up for consideration in previous years without gaining any traction. Collins and Oliver both have optimism that things will progress differently this year, given changes they made to address opposition they faced in the past.

“We have to decide what’s important to us and what’s in the best interest of our constituents,” Oliver said. “I’m confident the legislature will get this done.”