BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 565
                                                                  Page  1

          Date of Hearing:   May 8, 2013

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                    AB 565 (Salas) - As Amended:  April 23, 2013 

          Policy Committee:                              HealthVote:19-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              No

           SUMMARY  

          This bill revises provisions of the Steven M. Thompson Physician  
          Corps Loan Repayment Program (STLRP).  Specifically, this bill:

          1)Adds a private practice that provides primary care in a  
            medically underserved area (MUA), as specified, to the  
            definition of community clinic.

          2)Deletes guidelines for placement criteria that seek to place  
            applicants in areas with the greatest need and instead gives  
            preferences to applicants who agree to practice in a medical  
            underserved area, as specified, or who are from rural  
            communities and agree to practice in a physician owned and  
            operated setting, as defined. 

           FISCAL EFFECT  

          Negligible state costs.

           COMMENTS  

           1)Rationale  .  This bill is sponsored by the California Medical  
            Association (CMA) and is intended to strengthen the criteria  
            for STLRP applicants.   According to CMA, more than $17  
            million has been awarded to 223 physicians from 2003 to 2011  
            but demand far outweighs the funding supply.  With continued  
            shortages of primary care physicians in 74% of counties, this  
            bill makes private practice primary care physicians eligible  
            for loan forgiveness in medically underserved areas.  This  
            bill also requires three years of experience providing  
            services to underserved populations.  









                                                                  AB 565
                                                                  Page  2

           2)Background  .  The STLRP was established in 2003 to encourage  
            recently licensed physicians to practice in federally  
            designated health professional shortage areas (HPSAs) by  
            authorizing eligible physicians to receive $105,000 for  
            educational loan repayment in exchange for full-time service  
            for a minimum of three years.  STLRP guidelines give priority  
            consideration, as specified, to applicants best suited to meet  
            the cultural and linguistic needs and demands of patients from  
            medically underserved populations (MUPs) and who meet other  
            specified criteria.  

           3)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.  

           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.  AB 860 is pending on this committee's  
               Suspense File.

             b)   AB 1176 (Bocanegra and Bonta) establishes the Medical  
               Residency Training Program within the Office of Statewide  
               Health Planning and Development (OSHPD) to fund graduate  
               medical education residency programs.  AB 1176 is pending  
               in this committee.

             c)   SB 20 (Ed Hernandez), pending on the Senate  
               Appropriations Committee Suspense File, 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.

           -Analysis Prepared by  :    Debra Roth / APPR. / (916) 319-2081 









                                                                  AB 565
                                                                  Page  3