BILL ANALYSIS                                                                                                                                                                                                    Ķ

                                                                  AB 565
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          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.  


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          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  

           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  

               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  


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                 the following criteria:

                  (1)       Speak a Medi-Cal threshold language;
                  (2)       Come from an economically disadvantaged  
                  (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  

               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  

               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  


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               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.


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             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  

             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  

             f)   AB 1403 (Nuņez), Chapter 367, Statutes of 2004, renames  
               the California Physician Corps Loan Repayment Program as  
               the STLRP effective January 1, 2005.


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             g)   AB 982 (Firebaugh), Chapter 1131, Statutes of 2002,  
               establishes the California Physician Corps Loan Repayment  
               Program within the MBC.


              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). 



          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


          None on file.
          Analysis Prepared by  :    Rosielyn Pulmano / HEALTH / (916)  


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