BILL NUMBER: AB 920 CHAPTERED 09/22/05 CHAPTER 317 FILED WITH SECRETARY OF STATE SEPTEMBER 22, 2005 APPROVED BY GOVERNOR SEPTEMBER 22, 2005 PASSED THE ASSEMBLY SEPTEMBER 7, 2005 PASSED THE SENATE SEPTEMBER 6, 2005 AMENDED IN SENATE AUGUST 31, 2005 AMENDED IN SENATE JULY 5, 2005 AMENDED IN SENATE JUNE 23, 2005 AMENDED IN ASSEMBLY MAY 31, 2005 AMENDED IN ASSEMBLY APRIL 20, 2005 INTRODUCED BY Assembly Member Aghazarian (Principal coauthor: Assembly Member Sharon Runner) (Coauthor: Assembly Member Nakanishi) (Coauthor: Senator Cox) FEBRUARY 18, 2005 An act to repeal Article 7.7 (commencing with Section 2154) of Chapter 5 of Division 2 of the Business and Professions Code, and to amend Section 128345 of, to amend, repeal, and add Section 128335 of, and to add Article 5 (commencing with Section 128550) to Chapter 5 of Part 3 of Division 107 of, the Health and Safety Code, relating to health professions education, and making an appropriation therefor. LEGISLATIVE COUNSEL'S DIGEST AB 920, Aghazarian California Physicians Corps Program. Existing law establishes the Steven M. Thompson Physician Corps Loan Repayment Program in the Division of Licensing of the Medical Board of California. Under existing law, the program provides financial incentives to a physician and surgeon for practicing in a medically underserved community. The Medical Board of California has developed a program for volunteering physicians. Existing law requires the Office of Statewide Health Planning and Development to establish a nonprofit public benefit corporation known as the Health Professions Education Foundation to perform various duties with respect to implementing health professions scholarship and loan programs. This bill would repeal the Steven M. Thompson Physician Corps Loan Repayment Program in the Division of Licensing of the Medical Board of California. The bill would instead establish within the foundation, the California Physician Corps Program. The bill would provide that, operative July 1, 2006, the Steven M. Thompson Physician Corps Loan Repayment Program and the Physician Volunteer Program shall be transferred from the Medical Board of California to the foundation's California Physician Corps Program. The bill would require the foundation to establish and consult with an advisory committee to use guidelines for selection and placement of applicants until the office adopts other guidelines by regulation. It would authorize the foundation to appoint a selection committee that provides policy direction and guidance over the program. Existing law establishes the Health Professions Education Fund the purpose of which is to provide scholarships and loans to students from underrepresented groups who are accepted to or enrolled in schools of medicine, dentistry, nursing, or other health professions, and to fund the Geriatric Nurse Practitioner and Clinical Nurse Specialist Scholarship Program. All money in the fund is continuously appropriated to the office for the purposes of the foundation. Existing law establishes the Medically Underserved Account in the Contingent Fund of the Medical Board of California. This bill would establish within the Health Professions Education Fund the Medically Underserved Account for Physicians primarily to fund the Steven M. Thompson Physician Corps Loan Repayment Program, and also to fund the Physician Volunteer Program. The bill would transfer funds in the Medically Underserved Account to the Medically Underserved Account for Physicians established under the bill. Funds in this account would be continuously appropriated for the repayment of loans under the California Physician Corps Program. Under existing law, the foundation is governed by a board consisting of 11 members. This bill would, until January 1, 2011, add 2 members to the foundation board to be appointed by the Medical Board of California from its membership. The bill would require that these appointed members be reimbursed by the Medical Board of California for any actual and necessary expenses incurred in connection with their duties as members of the foundation board. It would also require the foundation, the office, the Medical Board of California, and the advisory committee, on or before January 1, 2010, to evaluate the success of the programs' operation and the foundation's fundraising and to make recommendations to the Legislature for improvements to the programs or for the programs to be carried out by another agency or a foundation to be established within the Medical Board of California. Appropriation: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. The Legislature hereby finds and declares all of the following: (a) An adequate supply of physicians is critical to assuring the health and well-being of the citizens of California, particularly those who live in medically underserved areas. (b) It is in the best interest of the state and its residents that medical services be provided throughout the state in a manner that can be effectively accessed by the residents of all communities. (c) The Medical Board of California has implemented two programs, the Steven M. Thompson Physician Corps Loan Repayment Program and the Physician Volunteer Program, to help address the inadequate supply of physicians in medically underserved areas. (d) The most appropriate source for funding and continued operation of these programs is within the Health Professions Education Foundation. SEC. 2. Article 7.7 (commencing with Section 2154) of Chapter 5 of Division 2 of the Business and Professions Code is repealed. SEC. 3. Section 128335 of the Health and Safety Code is amended to read: 128335. (a) The office shall establish a nonprofit public benefit corporation, to be known as the Health Professions Education Foundation, that shall be governed by a board consisting of a total of 13 members, nine members appointed by the Governor, one member appointed by the Speaker of the Assembly, one member appointed by the Senate Committee on Rules, and two members of the Medical Board of California appointed by the Medical Board of California. The members of the foundation board appointed by the Governor, Speaker of the Assembly, and Senate Committee on Rules may include representatives of minority groups that are underrepresented in the health professions, persons employed as health professionals, and other appropriate members of health or related professions. All persons considered for appointment shall have an interest in health programs, an interest in health educational opportunities for underrepresented groups, and the ability and desire to solicit funds for the purposes of this article as determined by the appointing power. The chairperson of the commission shall also be a nonvoting, ex officio member of the board. (b) The Governor shall appoint the president of the board of trustees from among those members appointed by the Governor, the Speaker of the Assembly, the Senate Committee on Rules, and the Medical Board of California. (c) The director, after consultation with the president of the board, may appoint a council of advisers comprised of up to nine members. The council shall advise the director and the board on technical matters and programmatic issues related to the Health Professions Education Foundation Program. (d) Members of the board and members of the council shall serve without compensation but shall be reimbursed for any actual and necessary expenses incurred in connection with their duties as members of the board or the council. Members appointed by the Medical Board of California shall serve without compensation, but shall be reimbursed by the Medical Board of California for any actual and necessary expenses incurred in connection with their duties as members of the foundation board. (e) Notwithstanding any provision of law relating to incompatible activities, no member of the foundation board shall be considered to be engaged in activities inconsistent and incompatible with his or her duties solely as a result of membership on the Medical Board of California. (f) The foundation shall be subject to the Nonprofit Public Benefit Corporation Law (Part 2 (commencing with Section 5110) of Division 2 of Title 2 of the Corporations Code), except that if there is a conflict with this article and the Nonprofit Public Benefit Corporation Law (Part 2 (commencing with Section 5110) of Division 2 of Title 2 of the Corporations Code), this article shall prevail. (g) This section shall remain in effect only until January 1, 2011, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2011, deletes or extends that date. SEC. 3.5. Section 128335 is added to the Health and Safety Code, to read: 128335. (a) The office shall establish a nonprofit public benefit corporation, to be known as the Health Professions Education Foundation, that shall be governed by a board consisting of nine members appointed by the Governor, one member appointed by the Speaker of the Assembly, and one member appointed by the Senate Committee on Rules. The members of the foundation board appointed by the Governor, Speaker of the Assembly, and Senate Committee on Rules may include representatives of minority groups which are underrepresented in the health professions, persons employed as health professionals, and other appropriate members of health or related professions. All persons considered for appointment shall have an interest in health programs, an interest in health educational opportunities for underrepresented groups, and the ability and desire to solicit funds for the purposes of this article as determined by the appointing power. The chairperson of the commission shall also be a nonvoting, ex officio member of the board. (b) The Governor shall appoint the president of the board of trustees from among those members appointed by the Governor, the Speaker of the Assembly, and the Senate Committee on Rules. (c) The director, after consultation with the president of the board, may appoint a council of advisers comprised of up to nine members. The council shall advise the director and the board on technical matters and programmatic issues related to the Health Professions Education Foundation Program. (d) Members of the board and members of the council shall serve without compensation but shall be reimbursed for any actual and necessary expenses incurred in connection with their duties as members of the board or the council. (e) The foundation shall be subject to the Nonprofit Public Benefit Corporation Law (Part 2 (commencing with Section 5110) of Division 2 of Title 2 of the Corporations Code), except that if there is a conflict with this article and the Nonprofit Public Benefit Corporation Law (Part 2 (commencing with Section 5110) of Division 2 of Title 2 of the Corporations Code), this article shall prevail. (f) This section shall become operative January 1, 2011. SEC. 4. Section 128345 of the Health and Safety Code is amended to read: 128345. The Health Professions Education Foundation may do any of the following: (a) Solicit and receive funds from business, industry, foundations, and other private or public sources for the purpose of providing financial assistance in the form of scholarships or loans to African-American students, Native American students, Hispanic-American students, and other students from underrepresented groups. These funds shall be expended by the office after transfer to the Health Professions Education Fund, created pursuant to Section 128355. (b) Recommend to the director the disbursement of private sector moneys deposited in the Health Professions Education Fund to students from underrepresented groups accepted to or enrolled in schools of medicine, dentistry, nursing, or other health professions in the form of loans or scholarships. (c) Recommend to the director a standard contractual agreement to be signed by the director and any participating student, that would require a period of obligated professional service in the areas in California designated by the commission as deficient in primary care services. The agreement shall include a clause entitling the state to recover the funds awarded plus the maximum allowable interest for failure to begin or complete the service obligation. (d) Develop criteria for evaluating the likelihood that applicants for scholarships or loans would remain to practice their profession in designated areas deficient in primary care services. (e) Develop application forms, which shall be disseminated to students from underrepresented groups interested in applying for scholarships or loans. (f) Encourage private sector institutions, including hospitals, community clinics, and other health agencies to identify and provide educational experiences to students from underrepresented groups who are potential applicants to schools of medicine, dentistry, nursing, or other health professions. (g) Prepare and submit an annual report to the office documenting the amount of money solicited from the private sector, the number of scholarships and loans awarded, the enrollment levels of students from underrepresented groups in schools of medicine, dentistry, nursing, and other health professions, and the projected need for scholarships and loans in the future. (h) Recommend to the director that a portion of the funds solicited from the private sector be used for the administrative requirements of the foundation. (i) Implement the Steven M. Thompson Physician Corps Loan Repayment Program and the Volunteer Physician Program, as provided under Article 5 (commencing with Section 128550). SEC. 5. Article 5 (commencing with Section 128550) is added to Chapter 5 of Part 3 of Division 107 of the Health and Safety Code, to read: Article 5. California Physician Corps Program 128550. (a) There is hereby established within the Health Professions Education Foundation, the California Physician Corps Program. (b) Commencing July 1, 2006, both of the following programs shall be transferred from the Medical Board of California to the California Physician Corps Program within the foundation and operated pursuant to this article: (1) The Steven M. Thompson Physician Corps Loan Repayment Program. (2) The Physician Volunteer Program developed by the Medical Board of California. (c) The office may enter into an interagency agreement with the Medical Board of California to implement the transfer of programs as provided under subdivision (b). 128551. (a) It is the intent of this article that the Health Professions Education Foundation and the office provide the ongoing program management of the two programs identified in subdivision (b) of Section 128550 as a part of the California Physician Corps Program. (b) For purposes of subdivision (a), the foundation shall consult with the Medical Board of California, Office of Statewide Planning and Development, and shall establish and consult with an advisory committee of not more than seven members, that shall include two members recommended by the California Medical Association and may include other members of the medical community, including ethnic representatives, medical schools, health advocates representing ethnic communities, primary care clinics, public hospitals, and health systems, statewide agencies administering state and federally funded programs targeting underserved communities, and members of the public with expertise in health care issues. 128552. For purposes of this article, the following definitions shall apply: (a) "Account" means the Medically Underserved Account for Physicians established within the Health Professions Education Fund pursuant to this article. (b) "Foundation" means the Health Professions Education Foundation. (c) "Fund" means the Health Professions Education Fund. (d) "Medi-Cal threshold languages" means primary languages spoken by limited-English-proficient (LEP) population groups meeting a numeric threshold of 3,000, eligible LEP Medi-Cal beneficiaries residing in a county, 1,000 Medi-Cal eligible LEP beneficiaries residing in a single ZIP Code, or 1,500 LEP Medi-Cal beneficiaries residing in two contiguous ZIP Codes. (e) "Medically underserved area" means an area defined as a health professional shortage area in Part 5 of Subchapter A of Chapter 1 of Title 42 of the Code of Federal Regulations or an area of the state where unmet priority needs for physicians exist as determined by the California Healthcare Workforce Policy Commission pursuant to Section 128225. (f) "Medically underserved population" means the Medi-Cal program, Healthy Families Program, and uninsured populations. (g) "Office" means the Office of Statewide Health Planning and Development (OSHPD). (h) "Physician Volunteer Program" means the Physician Volunteer Registry Program established by the Medical Board of California. (i) "Practice setting" means either of the following: (1) A community clinic as defined in subdivision (a) of Section 1204 and subdivision (c) of Section 1206, a clinic owned or operated by a public hospital and health system, or a clinic owned and operated by a hospital that maintains the primary contract with a county government to fulfill the county's role pursuant to Section 17000 of the Welfare and Institutions Code, which is located in a medically underserved area and at least 50 percent of whose patients are from a medically underserved population. (2) A medical practice located in a medically underserved area and at least 50 percent of whose patients are from a medically underserved population. (j) "Primary specialty" means family practice, internal medicine, pediatrics, or obstetrics/gynecology. (k) "Program" means the Steven M. Thompson Physician Corps Loan Repayment Program. (l) "Selection committee" means a minimum three-member committee of the board, that includes a member that was appointed by the Medical Board of California. 128553. (a) Program applicants shall possess a current valid license to practice medicine in this state issued pursuant to Section 2050 of the Business and Professions Code. (b) The foundation, in consultation with those identified in subdivision (b) of Section 123551, shall use guidelines developed by the Medical Board of California for selection and placement of applicants until the office adopts other guidelines by regulation. (c) The guidelines shall meet all of the following criteria: (1) Provide priority consideration to applicants that are best suited to meet the cultural and linguistic needs and demands of patients from medically underserved populations and who meet one or more of the following criteria: (A) Speak a Medi-Cal threshold language. (B) Come from an economically disadvantaged background. (C) Have received significant training in cultural and linguistically appropriate service delivery. (D) Have three years of experience working in medically underserved areas or with medically underserved populations. (E) Have recently obtained a license to practice medicine. (2) Include a process for determining the needs for physician services identified by the practice setting and for ensuring that the practice setting meets the definition specified in subdivision (h) of Section 128552. (3) Give preference to applicants who have completed a three-year residency in a primary specialty. (4) Seek to place the most qualified applicants under this section in the areas with the greatest need. (5) Include a factor ensuring geographic distribution of placements. (d) (1) The foundation may appoint a selection committee that provides policy direction and guidance over the program and that complies with the requirements of subdivision (l) of Section 128552. (2) The selection committee may fill up to 20 percent of the available positions with program applicants from specialties outside of the primary care specialties. (e) Program participants shall meet all of the following requirements: (1) Shall be working in or have a signed agreement with an eligible practice setting. (2) Shall have full-time status at the practice setting. Full-time status shall be defined by the board and the selection committee may establish exemptions from this requirement on a case-by-case basis. (3) Shall commit to a minimum of three years of service in a medically underserved area. Leaves of absence shall be permitted for serious illness, pregnancy, or other natural causes. The selection committee shall develop the process for determining the maximum permissible length of an absence and the process for reinstatement. Loan repayment shall be deferred until the physician is back to full-time status. (f) The office shall adopt a process that applies if a physician is unable to complete his or her three-year obligation. (g) The foundation, in consultation with those identified in subdivision (b) of Section 128551, shall develop a process for outreach to potentially eligible applicants. (h) The foundation may recommend to the office any other standards of eligibility, placement, and termination appropriate to achieve the aim of providing competent health care services in approved practice settings. 128554. (a) Any regulation adopted by the Medical Board of California relating to the administration of the program or the Physician Volunteer Program shall remain in effect and shall be deemed to be a regulation of the office. The office may thereafter amend or repeal any part of those regulations or adopt any other regulations it deems appropriate to implement this article in accordance with the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. (b) The adoption, amendment, repeal, or readoption of a regulation authorized by this section is deemed to be necessary for the immediate preservation of the public peace, health and safety, or general welfare, for purposes of Sections 11346.1 and 11349.6 of the Government Code, and the office is hereby exempted from the requirement that it describe specific facts showing the need for immediate action. For purposes of subdivision (e) of Section 11346.1 of the Government Code, the 120-day period, as applicable to the effective period of an emergency regulatory action and submission of specified materials to the Office of Administrative Law, is hereby extended to 180 days. 128555. (a) The Medically Underserved Account for Physicians is hereby established within the Health Professions Education Fund. The primary purpose of this account is to provide funding for the ongoing operations of the Steven M. Thompson Physician Corps Loan Repayment Program provided for under this article. This account also may be used to provide funding for the Physician Volunteer Program provided for under this article. (b) All moneys in the Medically Underserved Account contained within the Contingent Fund of the Medical Board of California shall be transferred to the Medically Underserved Account for Physicians on July 1, 2006. (c) Funds in the account shall be used to repay loans as follows per agreements made with physicians: (1) Funds paid out for loan repayment may have a funding match from foundations or other private sources. (2) Loan repayments may not exceed one hundred five thousand dollars ($105,000) per individual licensed physician. (3) Loan repayments may not exceed the amount of the educational loans incurred by the physician participant. (d) Notwithstanding Section 11105 of the Government Code, effective January 1, 2006, the foundation may seek and receive matching funds from foundations and private sources to be placed in the account. "Matching funds" shall not be construed to be limited to a dollar-for-dollar match of funds. (e) Funds placed in the account for purposes of this article, including funds received pursuant to subdivision (d), are, notwithstanding Section 13340 of the Government Code, continuously appropriated for the repayment of loans. (f) The account shall also be used to pay for the cost of administering the program and for any other purpose authorized by this article. The costs for administration of the program may be up to 5 percent of the total state appropriation for the program and shall be subject to review and approval annually through the state budget process. This limitation shall only apply to the state appropriation for the program. (g) The office and the foundation shall manage the account established by this section prudently in accordance with the other provisions of law. 128556. The terms of loan repayment granted under this article shall be as follows: (a) After a program participant has completed one year of providing services as a physician in a medically underserved area, up to twenty-five thousand dollars ($25,000) for loan repayment shall be provided. (b) After a program participant has completed two consecutive years of providing services as a physician in a medically underserved area, an additional amount of loan repayment up to thirty-five thousand dollars ($35,000) shall be provided, for a total loan repayment of up to sixty thousand dollars ($60,000). (c) After a program participant has completed three consecutive years of providing services as a physician in a medically underserved area, an additional amount of loan repayment up to forty-five thousand dollars ($45,000) shall be provided, for a total loan repayment of up to one hundred five thousand dollars ($105,000). 128557. (a) The foundation shall submit to the Legislature an annual report that includes all of the following: (1) The number of program participants. (2) The name and location of all practice settings with program participants. (3) The amount expended for the program. (4) Information on annual performance reviews by the practice settings and program participants. (5) Status and statistics on the Physician Volunteer Program. (b) The foundation shall include the information required in subdivision (a) in its annual report required pursuant to subdivision (g) of Section 128345. 128557.5. On or before January 1, 2010, the foundation, the office, the Medical Board of California, and the advisory committee described in Section 128551 shall evaluate the success of the programs' operation and the foundation's fundraising and shall make recommendations to the Legislature for improvements to the programs or for the programs to be carried out by another agency or a foundation to be established within the Medical Board of California. 128558. This article shall become operative on July 1, 2006. SEC. 6. Section 2 of this act shall become operative July 1, 2006.