BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair AB 565 (Salas) - California Physician Corps Program. Amended: July 2, 2013 Policy Vote: Health 9-0 Urgency: No Mandate: No Hearing Date: August 12, 2013 Consultant: Brendan McCarthy This bill meets the criteria for referral to the Suspense File. Bill Summary: AB 565 would revise the criteria for the California Physician Corps Program, which provides financial incentives for physicians to work in underserved areas. Fiscal Impact: Unknown additional demand for loan repayment funding due to changes in the program criteria (Health Professions Education Fund). The bill would allow participating physicians to receive loan repayment funds if they work in a medical practice whose patient population is at least 30% uninsured, Medi-Cal beneficiaries, or beneficiaries of other public programs. This is a reduction from the current requirement that at least 50% of the practice's patient population meet this criteria. By loosening this program criteria, the bill is likely to increase the number of qualifying medical practices and therefore the number of eligible physicians. The size of this impact is unknown. Background: Under Current law, the California Physician Corps Program is composed to two programs - the Volunteer Physicians Program and the Stephen M. Thompson Loan Repayment Program. The Volunteer Physicians Program has never been funded and is inactive. The Steven M. Thompson Physician Corps Loan Repayment Program provides up to $105,000 in loan repayments for physicians who agree to work in medically underserved areas for at least three years. Criteria for awarding loan repayments are developed by the Health Professions Education Foundation within the Office of Statewide Health Planning and Development. In order to qualify for the Steven M. Thompson Physician Corps Loan Repayment Program, a physician must agree to work full time in a community clinic or a medical practice in a medically AB 565 (Salas) Page 1 underserved area whose patient population is at least 50% uninsured or eligible for Medi-Cal or the Healthy Families Program. Proposed Law: AB 565 would revise the criteria for the California Physician Corps Program, which provides financial incentives for physicians to work in underserved areas. Specifically, the bill would: Revise the definition of medical practice to clarify that it is a physician owned and operated medical practice providing primary care; Reduce the portion of a medical practice's patients that must be medically underserved from 50% to 30%; Revise the definition of medically underserved population to include the uninsured, Medi-Cal beneficiaries, and beneficiaries of publicly funded programs that serve patients earning less than 250% of the federal poverty level; Require the Office of Statewide Health Planning and Development to develop program guidelines; Require the Office to give preference to applicants who agree to practice in a medically underserved area and provide care to medically underserved populations; Require the Office to give priority consideration to applicants from rural areas. Related Legislation: SB 20 (Hernandez) would transfer all fines and penalties assessed by the Department of Managed Healthcare to the Health Education Fund for the Stephen M. Thompson Physician Corps Loan Repayment Program, upon the close of the Major Risk Medical Insurance Program. That bill is in the Assembly Appropriations Committee. AB 860 (Perea and Bocanegra) would appropriate $600,000 in fine and penalty revenues to the Steven Thompson Medical School Scholarship Program. That bill was held on the Assembly Appropriations Suspense File. AB 1176 (Bocanegra and Bonta) would establish a Medical Residency Training Program to fund graduate medical training programs. That bill was held on the Assembly Appropriations Suspense File. Staff Comments: Current law requires the Medical Board of AB 565 (Salas) Page 2 California to develop guidelines for awarding loan repayments under the program. This bill gives that responsibility to the Health Professions Education Foundation (within the Office of Statewide Health Planning and Development). The Office indicates that the changes to current law in the bill are explicit enough that it will not need to adopt or amend any guidelines to implement the bill.