BILL ANALYSIS Ķ SENATE COMMITTEE ON HEALTH Senator Ed Hernandez, O.D., Chair BILL NO: AB 565 AUTHOR: Salas AMENDED: April 23, 2013 HEARING DATE: June 26, 2013 CONSULTANT: Moreno SUBJECT : California Physician Corps Program. SUMMARY : Revises the criteria required to be met by guidelines developed by the Medical Board of California for the selection and placement of California Physician Corps Program applicants. Revises the criteria that California Physician Corps Program participants must meet. 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 and loans. 2.Establishes the California Physician Corps Program, which consists of the Stephen M. Thompson Loan Repayment Program (SMT Program) and the Physician Volunteer Program, administered by HPEF. Requires the California Physician Corps Program 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. 3.Defines medically underserved area (MUA) as consistent with the federal definition of a Health Professional Shortage Area (HPSA) or an area of the state where unmet priority needs for physicians exist as determined by the California Healthcare Workforce Policy Commission. 4.Defines medically underserved populations (MUP) as those covered under the Medi-Cal and Healthy Families programs and the uninsured. 5.Requires applicants to the California Physician Corps Program to be working full-time in a practice setting or have signed an agreement to work full-time in a practice setting. Defines "practice setting" as either: Continued--- AB 565 | Page 2 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 percent of whose patients are from a MUP; or, b. A medical practice located in a MUA and at least 50 percent of whose patients are from a MUP. This bill: 1.Revises the definition of "community clinic" for the purposes specifying the practice settings that California Physician Corps Program participants must work in to include a private practice that provides primary care located in a MUA and has a minimum of 30 percent uninsured, Medi-Cal, or other publicly funded programs that serve patients who earn less than 250 percent of the federal poverty level. 2.Revises criteria to be met by guidelines developed by the Medical Board of California for the selection and placement of California Physician Corps Program applicants to: a. Require that an applicant have three years providing health care services to MUP or MUA instead of working in medically underserved areas or with MUPs; b. Delete guideline criteria seeking to place the most qualified applicants in the areas with the greatest need and replaces it with the giving preference to applicants who agree to practice in an HPSA or MUA and who agree to serve an MUP.; and, c. Give priority consideration to applicants from rural communities who agree to practice in a physician owned and operated medical practice setting located in an MUA with at least 50 percent of patients from an MUP. FISCAL EFFECT : According to the Assembly Appropriations Committee analysis, negligible state costs. PRIOR VOTES : Assembly Health: 19- 0 Assembly Appropriations:17- 0 Assembly Floor: 70- 0 AB 565 | Page 3 COMMENTS : 1.Author's statement. There are many communities in California that have physician shortages that put people's health at risk. In Kern County alone, there are 1,200 patients for every primary care physician-nearly double the national average. This bill ensures that physicians participating in the loan repayment program are serving low income populations in medically underserved communities. This bill has the potential to bring much needed physicians to some of the most medically underserved populations in the Central Valley and throughout California. 2.Primary Care Physician Workforce Shortage. According to a report commissioned by the California Health Care Foundation, the number of primary care physicians actively practicing in California is at the very bottom range of, or below, the state's need. The distribution of these physicians is equally as poor. In 2008, there were 69,460 actively practicing physicians in California (this includes Doctors of Medicine and Doctors of Osteopathic Medicine) with only 35 percent of these physicians reported practicing primary care. This equates to 63 active primary care physicians per 100,000 persons. According to the Council on Graduate Medical Education, a range of 60 to 80 primary care physicians is needed per 100,000 persons to adequately meet the needs of the population. When the same metric is applied regionally, only 16 of California's 58 counties fall within the needed supply range for primary care physicians. 3.The ACA. As a result of implementation of the Affordable Care Act (ACA), it is estimated that 3 to 7 million Californians will be newly eligible for health insurance starting in 2014. The ACA aims to change how care is delivered. It will provide incentives for expanded and improved primary care, which may affect demand for some health care professionals more than others, and create team-based models of service delivery. Research indicates that health care reform will place higher skill demands on all members of the health care workforce as systems try to improve quality while limiting costs. Studies have also found that insured persons use more health care services than uninsured persons, particularly in primary care and preventive services. This was the experience in Massachusetts, which saw a substantial increase in demand for primary care services as a result of its 2006 health reform. AB 565 | Page 4 4.California Physician Corps Program. The California Physician Corps Program consists of two programs: the Volunteer Physicians Program and the SMT program. According to OSHPD, the Volunteer Physicians Program has never been implemented. The SMT program encourages recently licensed physicians to practice in HPSAs in California. The program repays up to $105,000 in educational loans in exchange for full-time service for at least three years. To be considered eligible for an award, applicants must: a. Be an allopathic or osteopathic physician; b. Be free of any contractual service obligations (i.e. the National Health Service Corps Federal Loan Repayment Program or other financial incentive programs); c. Have outstanding educational debt from a government or commercial lending institution; d. Have a valid, unrestricted license to practice medicine in California; e. Be employed or have accepted employment in a HPSA in California; and, f. Commit to providing full-time direct patient care in a HPSA. 1.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. 2.Related legislation. SB 20 (Hernandez) requires, beginning on the date that the California Major Risk Medical Insurance Program (MRMIP) becomes inoperative, all the funds in the Managed Care Administrative Fines and Penalties Fund (MCAFP Fund) to be transferred each year to the Medically Underserved Account for Physicians in the Health Professions Education Fund for use by the SMT Program. SB 20 is set to be heard in the Assembly Health Committee on July 2, 2013. AB 860 (Perea and Bocanegra) appropriates $600,000 from the MCAFP Fund to the Steven Thompson Medical School Scholarship AB 565 | Page 5 Program within HPEF. AB 860 is pending in Assembly Appropriations Committee. SUSPENSE AB 1176 (Bocanegra and Bonta) establishes the Medical Residency Training Program within OSHPD to fund graduate medical education residency programs in California, as specified. SUSPENSE 3.Prior legislation. SB 635 (Hernandez) of 2012 was substantially similar to SB 20, but would have instead transferred the MCAFP funds to a newly created Song-Brown Program Account, which supports training for health care professionals. SB 635 was held on suspense in the Assembly Appropriations Committee. SB 606 (Ducheny), Chapter 600, Statutes of 2009, requires the Osteopathic Medical Board of California to assess an additional $25 fee to 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 SMT Program. Allows osteopathic physicians and surgeons to be eligible to apply for the SMT Program. 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 MCAFP Fund and used, upon appropriation by the Legislature, for a physician loan-repayment program and MRMIP. 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 plans. AB 2439 (De La Torre) Chapter 640, Statutes of 2008, mandates the Medical Board of California assess a $25 fee to 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. AB 1403 (Nuņez), Chapter 367, Statutes of 2004, renames the AB 565 | Page 6 California Physician Corps Loan Repayment Program as the SMT Program effective January 1, 2005. AB 982 (Firebaugh), Chapter 1131, Statutes of 2002, establishes the California Physician Corps Loan Repayment Program within the Medical Board of California. 4.Support. According to the Medical Board of California and Community Clinic Association of Los Angeles County, this bill tightens existing guidelines by which health care providers are selected for the SMT Program and that it will help address the shortage and poor distribution of qualified primary care providers practicing in underserved areas. The Association of California Healthcare Districts states 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. The California Chapter of the American College of Emergency Physicians states this bill will improve access to health care for patients in underserved communities by changing the selection and placement guidelines of the California Physician Corps Program. The American Academy of Pediatrics, California writes that by broadening the definition of qualified practice sites to include private practice, this bill has the potential to draw a new population of physicians to underserved areas. 5.Amendments. a. To clarify the threshold for patients of private practice, delete "or a private" on page 3, line 25 and delete lines 26-32 and insert on line 26: (2) A physician owned and operated medical practice setting that provides primary care located in a medically underserved area and has a minimum of 30 percent uninsured, Medi-Cal, or other publicly funded program that serves patients who earn less than 250 percent of the federal poverty level b. To ensure that that the new criteria specified in this bill be included in future OSHPD regulations related to the selection and placement of California Physician Corps Program applicants, the bill should be amended on page 4, beginning on line 7, as follows: (b)The foundation and the office, in consultation with those identified in subdivision (b) of Section 123551, AB 565 | Page 7 shall use guidelines developed by the Medical Board of Californiashall use guidelines consistent with (c) for selection and placement of applicantsuntil the office adopts other guidelines by regulation. The foundation shall interpret the guidelines to apply to both osteopathic and allopathic physicians and surgeons. c. To clarify that the definitions of "community clinic" are interpreted to be used only for the purposes of the California Physician Corps Program, insert in 128552: "Nothing in this section shall apply to any other provision of law, including, but not limited to Medi-Cal managed care plan auto-assignment regulations." SUPPORT AND OPPOSITION : Support: California Medical Association (sponsor) American Academy of Pediatrics, California Association of California Healthcare Districts Board of Trustees of the Delano Joint Union High School District California Academy of Physician Assistants California Chapter of the American College of Emergency Physicians California Optometric Association City of Hanford Community Action Partnership of Kern Community Clinic Association of Los Angeles County Kern Medical Center Medical Board of California Osteopathic Physicians and Surgeons of California Rural County Representatives of California Semitropic Elementary School District Oppose: None received. -- END --