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 30, 2013                           
          Consultant: Brendan McCarthy    
          
          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.