BILL ANALYSIS                                                                                                                                                                                                    

                                                                  AB 565
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          AB 565 (Salas)
          As Amended September 3, 2013
          Majority vote
          |ASSEMBLY:  |70-0 |(May 16, 2013)  |SENATE: |39-0 |(September 9,  |
          |           |     |                |        |     |2013)          |
           Original Committee Reference:    HEALTH  

           SUMMARY  :  Revises the definition of a practice setting for  
          purposes of the Steven M. Thompson Physician Corps Loan  
          Repayment Program (STLRP) to include a physician owned and  
          operated medical practice setting that provides primary care  
          located in a medically underserved area (MUA), as specified.   
          Revises the criteria of the STLRP to require that an applicant  
          have three years providing health care services to medically  
          underserved populations (MUPs) or in a MUA and to give priority  
          consideration to applicants from rural communities who agree to  
          practice in a physician owned and operated practice setting, as  
          specified.  Deletes the STLRP guideline that seeks to place the  
          most qualified applicants in the areas with the greatest need  
          and replaces it with the requirement that the STLRP gives  
          preference to applicants who agree to practice in a federally  
          designated health professional shortage area (HPSA) or MUA and  
          who agree to serve a MUP.

           The Senate amendments  delete the provisions lowering the  
          percentage (30%) of patients who are enrolled in public  
          programs, as specified, that a practice setting must serve to  
          apply for the STLRP, and reverts to existing law requirements  

           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 or loans.
          2)Establishes the California Physician Corps Program, which  
            consists of the STLRP and the Physician Volunteer Program,  
            administered by HPEF.  


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          3)Requires STLRP 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.  Allows up to 20% of the available  
            positions to be awarded to applicants from specialties outside  
            of primary care.  Requires up to 15% of funds to be dedicated  
            to loan assistance for physician and surgeons who agree to  
            practice in geriatric settings.  

          4)Defines MUA as consistent with the federal definition of a  
            HPSA or an area of the state where unmet priority needs for  
            physicians exist as determined by the California Healthcare  
            Workforce Policy Commission.  

          5)Defines MUP as Medi-Cal program and Healthy Families program  
            recipients and uninsured populations.

          6)Defines practice setting for purposes of the STLRP as either:

             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% of whose patients are  
               from a MUP; or,

             b)   A medical practice located in a MUA and at least 50% of  
               whose patients are from a MUP.

           AS PASSED BY THE ASSEMBLY  , this bill lowered the percentage from  
          50% to 30% the number of patients that a practice setting must  
          serve to qualify for the STLRP, as specified.

           FISCAL EFFECT  :  According to the Senate Appropriations  
          Committee, minor, and absorbable costs. 

           COMMENTS  :  The STLRP was established in 2003 to encourage  
          recently licensed physicians to practice in HPSAs in California.  
           STLRP authorizes a plan for repaying up to $105,000 in  
          educational loans in exchange for full-time service for a  
          minimum of three years.  STLRP  guidelines include giving  
          priority consideration to applicants that are best suited to  
          meet the cultural and linguistic needs and demands of patients  


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          from MUPs; giving preference to applicants who have completed a  
          three-year residency in a primary specialty (family practice,  
          internal medicine, pediatrics, or obstetrics/gynecology); and,  
          placing the most qualified applicants in areas with the greatest  

          In 2012, the Office of Statewide Health Planning and Development  
          submitted its annual STLRP report to the Legislature.  According  
          to the report, since inception, the STLRP has awarded $17  
          million to 223 individuals.  In 2011, HPEF awarded more than  
          $4.1 million to 76 physicians (out of 185 applicants requesting  
          approximately $17.6 million in loan repayments).  Award  
          recipients include individuals practicing at federally qualified  
          health centers or look-alikes, community health centers, rural  
          health centers, migrant health centers, public housing health  
          centers, correctional facilities, and Indian health clinics.   
          The report indicates that performance reviews of STLRP  
          participants are conducted by HPEF through mandatory biannual  
          reports which are completed and submitted by supervisors, clinic  
          directors, or other appropriate managers of the practice  
          settings where the participants are serving their service  
          The report indicates that throughout the spring of 2011, HPEF  
          developed a partnership with the Healthcare Workforce  
          Development Council to leverage STLRP awards with matching funds  
          from the Federal American Recovery and Reinvestment Act of 2009,  
          and these matching funds were awarded to 61 of the 76 physicians  

           Analysis Prepared by  :    Rosielyn Pulmano / HEALTH / (916)