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  
               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.

                                      -- END --