BILL ANALYSIS Ó
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 635
S
AUTHOR: Hernandez
B
AMENDED: As Introduced
HEARING DATE: March 23, 2011
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CONSULTANT:
3
Orr
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SUBJECT
Health care: workforce training.
SUMMARY
Beginning January 1, 2014, requires funds deposited into
the Managed Care Administrative Fines and Penalties Fund in
excess of $1,000,000 be transferred each year to the Office
of Statewide Health Planning and Development (OSHPD) for
the purpose of the Song-Brown Health Care Workforce
Training Act of 1973 (Song-Brown).
CHANGES TO EXISTING LAW
Existing federal law:
Establishes the National Health Services Corps program,
which administers scholarship and loan repayment programs
to primary care clinicians in exchange for serving in
Health Professional Shortage Areas (HPSAs) throughout the
U.S. In California, the program is administered by OSHPD as
the California State Loan Repayment Program.
Prohibits, under the Patient Protection and Affordable Care
Act (PPACA), any preexisting condition exclusion from being
imposed by group health plans and extends this protection
to individual health insurance coverage, effective for new
and grandfathered group plans beginning on or after January
1, 2014. For enrollees under 19 years of age, this
prohibition became effective beginning on or after
Continued---
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September 23, 2010.
Existing state law:
Establishes the Song-Brown Health Care Workforce Training
Act of 1973 (Song-Brown), administered by the Office of
Statewide Health Planning and Development (OSHPD) to
provide financial support to family practice residency
programs, nurse practitioner and physician assistant
programs, and registered nurse education programs to
increase the number of students and residents receiving
education and training in family practice and nursing. The
Song-Brown Act also encourages universities and primary
care health professionals to provide healthcare in
medically underserved areas.
Creates the Steven M. Thompson Physician Corps Loan
Repayment Program, which provides for the repayment of
educational loans for physicians and surgeons who practice
in medically underserved areas of the state, as defined.
Creates the Medically Underserved Account for Physicians
within the Health Professions Education Fund, managed by
the Health Professions Education Foundation and OSHPD, for
the primary purpose of funding this program, and provides
that funds placed in the account for these purposes are
continuously appropriated.
Provides for the licensure and regulation of health care
service plans by the Department of Managed Health Care
(DMHC) under the Knox-Keene Health Care Service Plan Act of
1975 (Knox-Keene). Subjects health care service plans to
various fines and administrative penalties for failing to
comply with specified provisions of the act. Also requires
health care service plans to pay specified assessments each
fiscal year as a reimbursement of their share of the costs
and expenses reasonably incurred in the administration of
the act.
Establishes the California Major Risk Medical Insurance
Program (MRMIP), which is administered by the Managed Risk
Medical Insurance Board (MRMIB) to provide major risk
medical coverage to eligible persons who have been rejected
for coverage by at least one private health plan. Creates
the Major Risk Medical Insurance Fund for purposes of
MRMIP.
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Requires fines and administrative penalties assessed
against health care service plans by DMHC be deposited into
the Managed Care Administrative Fines and Penalties Fund
(Fund). Requires, beginning September 1, 2009, that those
fines and penalties collected up to $1,000,000 be deposited
into the Stephen M. Thompson Physician Corp Loan Repayment
Program. Any amount over the first $1,000,000, including
accrued interest, is required to be transferred to the
Major Risk Medical Insurance Fund to be used, upon
appropriation by the Legislature, for MRMIP.
This bill:
Beginning January 1, 2014, requires any amount over the
first $1,000,000, including accrued interest deposited into
the Fund, be transferred to OSHPD for the purpose of the
Song-Brown program.
FISCAL IMPACT
This bill has not yet been analyzed by a fiscal committee.
BACKGROUND AND DISCUSSION
The author states that this bill is needed because the
state has a dramatic shortage of health care professionals.
Adding to the urgency and depth of the problem is the 2014
date of full implementation of the federal PPACA, which
will put another estimated 4.7 million Californians into
the health care system. The shortage of health care workers
is a widely recognized problem not only in California, but
nationwide. However, the author believes that the
discussion of this problem often focuses solely on the
shortage of primary care physicians without addressing the
related problem of the shortages of other health
professionals, especially those who are able to assist in
providing primary care.
The author believes this bill will help the state address
the shortage of primary care providers in underserved areas
by supplementing funding for the Song-Brown program, which
funds family practice residency programs, physician
assistant and nurse practitioner programs, and registered
nurse education programs. Since MRMIP will be obsolete in
2014, this bill provides an alternative place to transfer
the revenue generated from fines and penalties levied on
health plans.
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Current workforce shortages
Statewide shortages of health providers currently exist in
several major health professions, such as nursing, primary
care providers, and allied health. (Allied health
professions are clinical health care professions distinct
from medicine, dentistry, and nursing.) Health care
workforce needs are projected to increase dramatically due
to the aging of the population and the state's increasing
diversity. In February of 2009, the Senate Health
Committee held a hearing on California's health care
workforce. The background paper, prepared by the Senate
Office of Research (SOR), stated that the health care
worker shortage is defined in many ways, citing the
following:
§ The state will face a shortage of up to 17,000 physicians
by 2015.
§ The Center for California Health Workforce Studies
researchers indicate that the registered nurse shortage
is between 7,000 and 21,000. This shortage is expected to
grow due to both the aging of the general population and
the nursing workforce.
§ It is projected that California will need a 26.1 percent
growth in the number of pharmacists from 2006 to 2016.
§ Fifty percent of the public health workforce and seventy
percent of community clinic administrators will retire in
the next five to ten years.
§ Seventy-six percent of clinics report a staffing shortage
of allied health workers.
In addition to the shortages of certain health
professionals, SOR stated that California's health
professions workforce does not reflect the state's
demographic racial and ethnic composition and language
proficiency. According to research conducted by the Public
Health Institute and UC Berkeley's School of Public Health,
California's emerging populations are underrepresented in
all health professions and in the health professions
pipeline. A report by the Institute of Medicine links
poorer health outcomes for minorities to the shortage of
minority health care providers. One reason for this is that
persons of color are less likely than whites to receive
needed services due to cultural or linguistic barriers
between the health care provider and the patient.
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Song-Brown Act
The Song-Brown Health Care Workforce Training Act was
established in 1973 to address the shortage of physicians
engaged in family practice in California by providing
financial support to family practice residency, nurse
practitioner, physician assistant, and registered nurse
education programs throughout California. It also
encourages universities and primary care health
professionals to provide health care in medically
underserved areas. The Song-Brown program currently funds
27 California family practice residency programs, 16
physician assistant/nurse practitioner programs, and 34
registered nurse education programs. Total funding
proposed for the Song-Brown program in the Governor's
2011-12 budget is $7.1 million.
The Song-Brown Act also established the California
Healthcare Workforce Policy Commission consisting of 15
members appointed by the Governor and Legislature to aid
the Song-Brown program by establishing standards for family
practice training and residency programs, postgraduate
osteopathic medical programs in family practice, primary
care physician assistant and nurse practitioner programs,
and registered nurse training programs. The commission
reviews and makes recommendations to OSHPD on the awarding
of funds for loan assumption as well.
Other health care workforce development programs
The California State Loan Repayment Program assists with
the repayment of educational loans for primary health care
professionals who provide health care services in
federally-designated HPSAs in the state. The program is
funded through a grant from the federal Bureau of Health
Professions, National Health Service Corps, and is
administered by OSHPD. Eligible health disciplines
include: Physicians (MD/DO) specializing in family
practice, general internal medicine, general pediatrics,
obstetrics/gynecology, gerontology, and general psychiatry;
physician assistants; nurse practitioners; certified nurse
mid-wives; general practice dentists (DDS/DMD); dental
hygienists; clinical or counseling psychologists; clinical
social workers, licensed professional counselors;
psychiatric nurse specialists; and marriage and family
therapists.
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The Steven M. Thompson Physician Corps Loan Repayment
Program provides for the repayment of educational loans
obtained by physicians and surgeons who practice in a
medically underserved area of the state. According to
OSHPD's Healthcare Workforce Development Division, there
are almost 200 medically underserved areas in the state.
The Steven M. Thompson program awards up to $105,000 to
newly licensed physicians, and physicians who qualify must
commit to practice in designated, underserved communities
of the state for a minimum of three years.
The Health Professions Education Foundation is housed in
OSHPD and serves as the state's only non-profit foundation
statutorily created to develop the healthcare workforce and
increase access to health providers in medically
underserved areas. The Foundation administers 13
scholarship and loan repayment programs for students and
health providers in allied health, mental health, nursing,
pediatrics, including the Steven M. Thompson program.
Awards are also available to students in other allied
health care programs including medical laboratory
technology, pharmacy technician, occupational therapy,
physical therapy, and respiratory care.
Major Risk Medical Insurance Program
Major Risk Medical Insurance Program (MRMIP) is a program
administered by the Managed Risk Medical Insurance Board
(MRMIB) and provides health insurance for Californians
unable to obtain coverage in the individual health
insurance market because of preexisting conditions. To
qualify for coverage in MRMIP, individuals:
Must be California residents,
Cannot be eligible for both Part A and Part B of
Medicare, unless eligible solely because of end-stage
renal disease,
Cannot be eligible to purchase any health insurance
for continuation of benefits under Cobra or CalCobra,
and
Must be unable to secure adequate coverage.
Subscribers in MRMIP participate in the cost of their
coverage by paying premiums, which the state supplements.
Premiums for MRMIP subscribers average around $500 per
month, depending on age. Subscriber contributions cover 62
percent of MRMIP's cost. Premiums for the program are
subsidized with Proposition 99 cigarette and tobacco tax
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funds. MRMIP currently caps enrollment at 7,800 people and
determines the cap based on program costs and individual
market rates. The Governor's 2011-12 budget projects
revenue transferred to MRMIP of $3.5 million in 2011-12.
The Affordable Care Act
On March 23, 2010, President Obama signed the Patient
Protection and Affordable Care Act (PPACA), a comprehensive
measure designed to expand the number of persons with
health insurance coverage, regulate health insurance
offering, rating, and coverage practices, and expand and
diversify the health care workforce, among other
provisions. Starting January 1, 2014, "guaranteed issue"
will be required under PPACA, which means that it will
become illegal for insurers to deny people insurance
coverage for preexisting conditions, no longer allowing
insurers to use factors like health status in determining
premium rates. After January 1, 2014, individuals
currently receiving coverage through MRMIP should be able
to apply for and receive insurance coverage through the
insurance marketplace regardless of their preexisting
conditions, which means the MRMIP program will no longer be
needed.
Administrative penalties
Existing law allows DMHC to investigate and take
enforcement action against health plans that do not comply
with specified provisions under the Knox-Keene Act,
including charging fines and administrative penalties. All
fines collected by the DMHC go into the Managed Care Fund
and can vary in amount from year to year. Fine and penalty
revenue levied against health plans that has been
transferred to MRMIP has totaled $10 million in 2008-09, $2
million in 2009-10 and $1.8 million in 2010-11. According
to DMHC, the department collects about 90 percent of the
fines that it announces, and it usually takes two to eight
weeks to collect, unless a fine is challenged.
Prior legislation
AB 2551 (Hernandez) of 2010 would have established the
California Pharmacy Technician Scholarship and Loan
Repayment Program for pharmacy technician students who
agree to serve in medically underserved areas within the
state. These provisions were amended out of the bill.
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SB 499 (Ducheny) of 2009 would have required MRMIB to
report to the Legislature no later than March 1, 2010, and
annually thereafter, on the amount and use of moneys
transferred to the Major Risk Medical Insurance Fund and
the effect of those moneys on the waiting list for MRMIP.
These provisions were amended out of the bill.
SB 1379 (Ducheny) Chapter 607, Statutes of 2008, requires
fines and administrative penalties levied against health
plans under the Knox-Keene Act to be placed in the Managed
Care Administrative Fines and Penalties Fund and used, upon
appropriation by the Legislature, for a physician loan
repayment program and MRMIP, instead of being deposited
into the State Managed Care Fund. Requires DMHC to make a
one-time transfer of fine and administrative penalty
revenue of $10 million to MRMIP and $1 million to the loan
repayment program. Prohibits using the fines and
administrative penalties authorized by the Knox-Keene Act
to reduce assessments on health care service plans.
AB 2439 (De La Torre) Chapter 640, Statutes of 2008,
mandates the Medical Board of California assess a $25 fee
for applicants for issuance or renewal of a physician and
surgeon's license. Provides that up to 15 percent of the
funds collected shall be dedicated to loan assistance for
physicians and surgeons who agree to practice in geriatric
care settings or settings that primarily serve adults over
the age of 65 or adults with disabilities.
SB 68 (Committee on Budget and Fiscal Review) Chapter 78,
Statutes of 2005, expanded Song-Brown to include support
for programs that train registered nurses. Increased the
membership of the Commission from 10 to 15 members, to
include 3 representatives of practicing registered nurses
and 2 representatives of students in a registered nurse
training program. Required the Commission to identify
specific areas of the state where unmet priority needs for
registered nurses exist, establish standards for registered
nurse training programs, and review and make
recommendations to the director concerning funding of
registered nurse training programs.
AB 982 (Firebaugh) Chapter 1131, Statutes of 2002,
established a Dental Corps Loan Repayment Program, a
Physician Corps Loan Repayment Program and a California
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Medical and Dental Student Loan Repayment Program for
medical and dental practitioners who serve in underserved
areas.
Arguments in support
The California Academy of Family Physicians urges support
for the bill and believes that to ensure adequate health
care access, California must begin to address the shortage
of primary care physicians. They assert that this bill will
do so without compromising other important health programs.
The California Hospital Association believes that
Song-Brown is critically important, and this bill will
provide much needed additional financial support to the
program as demand increases and public education funding
decreases. The California Academy of Physician Assistants
claims it has a long history of addressing barriers to
health care access and has played a pivotal role in helping
to deliver high quality medical care in all clinical
settings and supports the new opportunities for physician
assistants that could result from this bill.
POSITIONS
Support: California Academy of Family Physicians
California Academy of Physician Assistants
California Hospital Association
Oppose: None received
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