BILL ANALYSIS Ķ AB 565 Page 1 Date of Hearing: April 16, 2013 ASSEMBLY COMMITTEE ON HEALTH Richard Pan, Chair AB 565 (Salas) - As Amended: April 10, 2013 SUBJECT : California Physician Corps Program. SUMMARY : Revises the definition of community clinic for purposes of the Steven M. Thompson Physician Corps Loan Repayment Program (STLRP) to include a private practice that provides primary care located in a medically underserved area (MUA) and has a minimum of 30% uninsured, Medi-Cal, or other publicly funded program that serves patients who earn less than 250% of the federal poverty level. Revises one of the criteria of the STLRP to require that an applicant have three years providing health care services to medically underserved populations (MUPs) in a federally designated health professional shortage area (HPSA) or MUA instead of working in medically underserved areas or with MUPs. Deletes the STLRP guideline that seeks to place the most qualified applicants in the areas with the greatest need and replaces it with the requirement that the STLRP gives preference to applicants who agree to practice in a HPSA or MUA and who agree to serve a MUP. EXISTING LAW : 1)Establishes the Health Professions Education Foundation (HPEF) within the Office of Statewide Health Planning and Development (OSHPD) to, among other functions, develop criteria for evaluating applicants for various scholarships or loans. 2)Establishes the California Physician Corps Program, which consists of the STLRP and the Physician Volunteer Program, administered by HPEF. 3)Requires STLRP to provide financial incentives, as specified, to applicants who possess a current valid medical or osteopathic license who practice in medically underserved communities, as specified. Allows up to 20% of the available positions to be awarded to applicants from specialties outside of primary care. Requires up to 15% of funds to be dedicated to loan assistance for physician and surgeons who agree to practice in geriatric settings. AB 565 Page 2 4)Defines MUA as consistent with the federal definition of a HPSA or an area of the state where unmet priority needs for physicians exist as determined by the California Healthcare Workforce Policy Commission. 5)Defines MUP as the Medi-Cal program, the Healthy Families program, and uninsured population. 6)Defines practice setting for purposes of the STLRP as either: a) A community clinic as defined, 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 to serve indigent population, which is located in a MUA and at least 50% of whose patients are from a MUP; or, b) A medical practice located in a MUA and at least 50% of whose patients are from a MUP. FISCAL EFFECT : This bill has not yet been analyzed by a fiscal committee. COMMENTS : 1)PURPOSE OF THIS BILL . The California Medical Association is the sponsor of this bill. According to the author, despite certain areas of the state facing drastic physician shortages, some regions have not received a STLRP placement. This bill ensures STLRP awards are going to the most medically underserved communities. 2)BACKGROUND . a) STLRP . STLRP was established in 2003 to encourage recently licensed physicians to practice in HPSAs in California. STLRP authorizes a plan for repaying up to $105,000 in educational loans in exchange for full-time service for a minimum of three years. STLRP guidelines include: i) Priority consideration to applicants that are best suited to meet the cultural and linguistic needs and demands of patients from MUPs and who meet one or more of AB 565 Page 3 the following criteria: (1) Speak a Medi-Cal threshold language; (2) Come from an economically disadvantaged background; (3) Have received significant training in cultural and linguistically appropriate service delivery; (4) Have three years of experience working in MUAs or with MUPs; and/or, (5) Have recently obtained a license to practice medicine. ii) A process for determining the need for physician services identified by the practice setting, and for ensuring that the practice setting qualifies; iii) Preference to applicants who have completed a three-year residency in a primary specialty (family practice, internal medicine, pediatrics, or obstetrics/gynecology); iv) Placing the most qualified applicants in areas with the greatest need; v) A factor ensuring geographic distribution of placements; and, vi) Priority consideration to applicants who agree to practice in a geriatric setting and are trained in geriatrics, as specified. b) Program Report to the Legislature . In 2012, OSHPD submitted its annual STLRP report to the Legislature. According to the report, since inception, the STLRP has awarded $17 million to 223 individuals. In 2011, HPEF awarded more than $4.1 million to 76 physicians (out of 185 applicants requesting approximately $17.6 million in loan repayments). Award recipients include individuals practicing at federally qualified health centers or look alikes, community health centers, rural health centers, migrant health centers, public housing health centers, correctional facilities, and Indian health clinics. The report indicates that performance reviews of STLRP participants are conducted by HPEF through mandatory biannual reports which are completed and submitted by AB 565 Page 4 supervisors, clinic directors, or other appropriate managers of the practice settings where the participants are serving their service obligation. The report indicates that throughout the Spring of 2011, HPEF developed a partnership with the Healthcare Workforce Development Council to leverage STLRP awards with matching funds from the Federal American Recovery and Reinvestment Act of 2009, and these matching funds were awarded to 61 of the 76 physicians selected. c) Federally designated HPSAs . HPSAs are designated by the Health Resources and Services Administration (HRSA) as having shortages of primary medical care, dental or mental health providers and may be geographic (a county or service area), demographic (low income population), or institutional (comprehensive health center, federally qualified health center, or other public facility). MUAs/MUPs are areas or populations designated by HRSA as having: too few primary care providers, high infant mortality, high poverty, and/or high elderly populations. 3)SUPPORT . According to the Community Clinic Association of Los Angeles County, this bill tightens existing guidelines by which health care providers are selected for the STLRP. This bill would help address the shortage and poor distribution of qualified primary care providers practicing in underserved areas. The Association of California Healthcare Districts state that this bill has the potential to encourage physicians to remain in underserved areas, thereby bringing qualified physicians to areas that may not otherwise have a physician to provide care. 4)RELATED LEGISLATION . a) AB 860 (Perea and Bocanegra) appropriates $600,000 from the Managed Care Administrative Fines and Penalties Fund (Managed Care Fund) to the Steven Thompson Medical School Scholarship Program within HPEF. AB 860 is pending in Assembly Appropriations Committee. b) AB 1176 (Bocanegra and Bonta) establishes the Medical Residency Training Program within OSHPD to fund graduate medical education residency programs in California, as specified. AB 1176 is pending in this Committee. AB 565 Page 5 c) SB 20 (Ed Hernandez), pending in Senate Appropriations Committee, requires, beginning on the date that the Major Risk Medical Insurance Program (MRMIP) becomes inoperative, all the funds in the Managed Care Fund to be transferred each year for purposes of the STLRP. 5)PREVIOUS LEGISLATION . a) SB 606 (Ducheny), Chapter 600, Statutes of 2009, requires the Osteopathic Medical Board of California to assess an additional $25 fee from an osteopathic physician and surgeon applying for initial or reciprocity licensure, or for a biennial renewal license. Requires the funds collected to be transferred to the Medically Underserved Account for Physicians for STLRP. Allows osteopathic physicians and surgeons to be eligible to apply for the STLRP. b) SB 1379 (Ducheny), Chapter 607, Statutes of 2008, requires fines and administrative penalties levied against health plans under the Knox-Keene Health Care Service Plan Act of 1975 to be placed in the Managed Care Fund and used, upon appropriation by the Legislature, for STLRP and MRMIP. SB 1379 also appropriates $1 million annually for purposes of the STLRP. c) AB 2439 (De la Torre), Chapter 640, Statutes of 2008, requires the Medical Board of California (MBC) to charge physicians and surgeons an additional $25 as part of their initial license fee or renewal fee to support the STLRP. d) AB 920 (Aghazarian), Chapter 317, Statutes of 2005, transfers the administration of the STLRP from the MBC to the HPEF. e) AB 327 (De la Torre), Chapter 293, Statutes of 2005, requires the MBC to assess a $50 voluntary donation from physicians and surgeons at the time of licensure or renewal. f) AB 1403 (Nuņez), Chapter 367, Statutes of 2004, renames the California Physician Corps Loan Repayment Program as the STLRP effective January 1, 2005. AB 565 Page 6 g) AB 982 (Firebaugh), Chapter 1131, Statutes of 2002, establishes the California Physician Corps Loan Repayment Program within the MBC. 6)SUGGESTED AMENDMENTS : a) Technical amendments . Since existing law already defines a MUA as a federal HPSA, the Committee may wish to amend this bill to instead refer to existing law's definition of MUA. b) Definition of Practice Setting . This bill revises the definition of a community clinic eligible for STLRP grants to include a private practice that provides primary care in a MUA and has a minimum of 30% uninsured, Medi-Cal, or other publicly funded programs that serve patients who earn less than 250% of the federal poverty level. Current law defines a practice setting eligible to apply for grants to include a medical practice located in a MUA and at least 50% of whose patients are from medically underserved population. The Committee may wish to amend this bill require HPEF to give priority consideration to applicants from rural communities who agree to practice in a physician owned and operated medical practice setting as defined in Section 128552 (i) (2). REGISTERED SUPPORT / OPPOSITION : Support California Medical Association (sponsor) American College of Emergency Physicians, California Chapter Association of California Healthcare Districts California Optometric Association Community Clinic Association of Los Angeles County Rural County Representatives of California Opposition None on file. Analysis Prepared by : Rosielyn Pulmano / HEALTH / (916) 319-2097 AB 565 Page 7