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:
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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
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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
California shall use guidelines consistent with (c) for
selection and placement of applicants until 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.
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