BILL ANALYSIS �
AB 860
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Date of Hearing: April 2, 2013
ASSEMBLY COMMITTEE ON HEALTH
Richard Pan, Chair
AB 860 (Perea and Bocanegra) - As Amended: March 19, 2013
SUBJECT : Medical school scholarships.
SUMMARY : Provides that beginning January 1, 2014, if the
Managed Care Administrative Fines and Penalties Fund (Managed
Care Fund) has $2 million or more , no less than $1 million shall
be transferred to the Steven M. Thompson Medical School
Scholarship (STMSS) Account within the Health Professions
Education Fund (HPEF), and shall, upon appropriation by the
Legislature, be used by the Office of Statewide Health Planning
and Development (OSHPD) for the STMSS Program, as specified.
Specifically, this bill :
1)Provides that beginning January 1, 2014, if the Managed Care
Fund has $2 million or more , no less than $1 million shall be
transferred to the STMSS Account within the HPEF, and shall,
upon appropriation by the Legislature, be used by OSHPD for
the STMSS Program, as specified.
2)Indicates that if the Managed Care Fund has a balance of less
than $2 million, the first $1 million shall be transferred to
the Steven M. Thompson Physician Corps Loan Repayment Program
(Physician Loan Repayment Program), and any remainder shall be
transferred to the STMSS Program.
3)States that any amount over the amounts that are subject to
transfer to the Physician Corps Loan Repayment and the STMSS
Program shall be transferred to the Major Risk Medical
Insurance Fund (MRMIF) for purposes of the Managed Risk
Medical Insurance Program (MRMIP).
4)Makes other technical, clarifying changes.
EXISTING LAW :
1)Establishes the Department of Managed Health Care (DMHC) to
regulate health plans under the Knox-Keene Health Care Service
Plan Act of 1975 (Knox-Keene). Authorizes the Director of
DMHC to take various enforcement actions for violations of
Knox-Keene, including the imposition of fines and penalties.
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2)Requires fines and penalties collected by DMHC in the
implementation of Knox-Keene to be deposited in the Managed
Care Fund.
3)Requires the fines and administrative penalties deposited into
the Managed Care Fund to be transferred to the DMHC beginning
September 1, 2009, and annually thereafter, as follows:
a) The first $1 million to be transferred to the Medically
Underserved Account for Physicians (MUAP) within the HPEF
for purposes of the Physician Loan Repayment Program, as
specified.
b) Any amount over the first $1 million, including accrued
interest, in the Managed Care Fund shall be transferred to
MRMIP, as specified.
4)Establishes MRMIP which provides health insurance for
Californians unable to obtain coverage in the individual
health insurance market because of pre-existing conditions.
5)Establishes by January 1, 2014, under the federal Affordable
Care Act (ACA), health benefit insurance exchanges in each
state for individuals and small businesses to purchase health
insurance products. Grants authority to states to operate an
exchange and prohibits insurers participating in the exchange
from discriminating based on pre-existing conditions, health
status, and gender.
6)Establishes, under the ACA, the Pre-existing Condition
Insurance Program (PCIP), a federally subsidized temporary
high risk health insurance pool program, to provide coverage
to currently uninsured individuals with pre-existing
conditions and provides an option for states to administer the
program.
7)Establishes Song-Brown Health Care Workforce Training Act of
1973 (Song-Brown) to increase the number of students and
residents receiving quality education and training in the
specialty of family practice and as primary care physician's
assistants (PAs), primary care nurse practitioners (PCNPs),
and registered nurses (RNs) and to maximize the delivery of
primary care family physician services to specific areas of
California where there is a recognized unmet priority need.
Provides that Song-Brown is to be implemented through
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contracts with accredited medical schools and other programs
that train the above practitioners.
8)Establishes HPEF within OSHPD, among other functions, to
develop criteria for evaluating applicants for various
scholarships or loans.
9)Establishes the California Physician Corps Program, which
consists of the Physician Loan Repayment Program and the
Physician Volunteer Program, administered by HPEF. Provides
that the Physician Loan Repayment Program provides financial
incentives, as specified, to program applicants who possess a
current valid medical or osteopathic license who practice in
medically underserved communities, as specified. Provides
that up to 20% of the available positions may be awarded to
program applicants from specialties outside of primary care
specialties.
10)Establishes the STMSS Program, administered by HPEF, which
provides financial incentives to program applicants who agree
in writing prior to completing an accredited medical or
osteopathic school to serve in an eligible practice setting,
as specified. Establishes the Steven M. Thompson Medical
School Scholarship Account within HPEF to consist of private
moneys donated to the program and provides that no General
Fund (GF) moneys shall be used to implement the program.
Provides that Provides that up to 20% of the available
scholarships may be awarded to program applicants who will
practice specialties outside of a primary specialty.
FISCAL EFFECT : This bill has not yet been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, California
faces a chronic undersupply of primary care services in rural
and underserved areas. The author further states that since
the role of MRMIP is being filled by Covered California
(formerly the California Health Benefit Exchange), the balance
of the Managed Care Fund can be used for other health care
purposes. The STMSS Program's goal of recruiting doctors to
underserved communities would be greatly advanced by the
additional funding proposed under this bill.
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2)BACKGROUND .
a) Beneficiaries of the Managed Care Fund . Existing law
establishes the Managed Care Fund for the purpose of
depositing fines and penalties collected by DMHC from
health plans for any violation of Knox-Keene. The first $1
million in the Managed Care Fund is transferred each year
to the MUAP for purposes of the Physician Loan Repayment
Program, and the remainder of the funds is transferred to
the MRMIF for MRMIP.
The Physician Loan Repayment Program that was originally
within the Medical Board of California (MBC) but was
eventually transferred to OSHPD, is one of the programs
administered by the HPEF. The Physician Loan Repayment
Program was established to encourage physicians to practice
in medically underserved areas (MUAs) of California by
authorizing a plan for repayment of their educational
loans. Licensed physician graduates who are practicing
direct patient care within the state may apply for a grant.
An awardee may receive up to $105,000 to repay educational
debt if he or she commits to a three-year service
obligation practicing in direct patient care in a MUA in
California. According to the US Health Resources and
Services Administration, MUAs and medically underserved
populations have shortages of primary medical care, dental
or mental health providers and may be designated based on
geographic (a county or service area), or demographic (low
income, Medicaid-eligible populations, cultural and/or
linguistic access barriers to primary medical care
services) criteria.
Since 1991, the Managed Risk Medical Insurance Board (MRMIB)
has operated MRMIP which is a state program that offers
health insurance to Californians who are unable to obtain
coverage in the individual insurance market. Services are
delivered through licensed health insurance plans. Most of
MRMIP's funding comes from the Proposition 99 Cigarette and
Tobacco Products Surtax Funds. Transfers from the Managed
Care Fund for MRMIP are as follows: 2009-10: $2,082,000;
2010-11: $3,678,000; and, 2011-12: $2,416,000 (estimated).
b) Song-Brown . Song-Brown, administered by OSHPD, was
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established in 1973 to increase the number of health
professional training slots in established medical schools.
According to OSHPD, support is provided to institutions
(not individual students) that provide clinical training
for family medicine residents, primary care nurse
practitioners, physician assistants and register nurses.
Song-Brown funds are used to train and educate residents
and students by providing clinical training in underserved
areas (Health Professional Shortage Areas, MUAs, Medically
Underserved Populations, Primary Care Shortage Areas, and
Registered Nurse Shortage Areas), who provide health care
to the State's underserved population. This provides
residents and students with experience and exposure,
increases access to health care, and provides health care
to the underserved. OSHPD indicates that Song-Brown awards
over $7.1 million annually to institutions and currently
funds the following: i) thirty out of 38 family practice
residency training programs; ii) seven out of 22 PCNP
programs; iii) five out of 10 PA programs; iv) one combined
PCNP/PA program; and, v) thirty-two out of 132 RN education
programs in the State which includes Associates,
Baccalaureate, and Masters level programs. The outcomes
for 2010-11 are as follows: 58% of family practice
graduates practice in areas of unmet need; 62% of PCNP and
PA graduates practice in areas of unmet need; 58% of
registered nurse graduates practice in areas of unmet need;
and, 745,186 patient encounters were provided by Song-Brown
funded family practice residents, PCNPs, and PAs.
c) STMSS Program . The STMSS Program was established last
year pursuant to AB 589 (Perea), Chapter 339, Statues of
2012. The STMSS Program is intended for persons who agree
in writing prior to completing an accredited medical or
osteopathic school to serve in an eligible practice setting
including a community clinic or a medical practice located
in a MUA, as defined. AB 589 also established the Steven
M. Thompson Medical School Scholarship Account within the
HPEF, which would consist of private moneys donated to the
STMSS Program. AB 589 provided that no GF moneys could be
used to implement these provisions and that the STMSS
Program be implemented only to the extent that the account
contains sufficient funds as determined by HPEF.
d) Healthcare Workforce Shortage . On March 23, 2010,
President Obama signed the ACA (Public Law (PL) 111-148),
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as amended by the Health Care and Education Reconciliation
Act of 2010 (PL 111-152). Among other provisions, the new
law requires most US citizens and legal residents to have
health insurance; creates state-based American health
benefit exchanges through which individuals can purchase
coverage, with premium and cost sharing credits, as
specified, and creates separate exchanges through which
small businesses can purchase coverage. A 2011 study by
the Center for the Health Professions of the University of
California, San Francisco entitled "California's Health
Care Workforce: Readiness for the ACA Era" indicates that
with California's implementation of the ACA, four to six
million more Californians will obtain coverage. As such,
there is a need not only for a sufficient number of
providers but also providers who can meet the needs of a
diverse and changing public. Specifically, the study
points out that primary care will be the area most
immediately affected because preventive care and chronic
disease management become increasingly important.
In March 2012 and March 2013, the Senate Health Committee
conducted informational hearings relating to healthcare
workforce and the ACA. The hearings explored the supply,
and expected demand for various healing arts practitioners
as part of ACA implementation. Additionally, several
options were discussed to address workforce needs.
3)SUPPORT . The American College of Emergency Physicians,
California Chapter, states that this bill would improve access
to health care for patients and is an important step toward
bringing new doctors into underserved communities.
4)RELATED LEGISLATION . SB 20 (Ed Hernandez), pending in Senate
Health Committee, requires, beginning on the date that MRMIP
becomes inoperative, all the funds in the Managed Care Fund to
be transferred each year to the MUAP in the HPEF for purposes
of the Physician Corps Loan Repayment Program. AB 1176
(Bocanegra), pending in this Committee, establishes the
Graduate Medical Education Fund in the State Treasury to
consist of annual assessments, on insurers or health care
services plans that provide prescribed health care coverage,
of $5 per covered life.
5)PREVIOUS LEGISLATION .
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a) AB 1526 (Monning), Chapter 855, Statutes of 2012 allows
the MRMIB to further subsidize the premium contributions
paid by individuals receiving coverage in MRMIP from
January 1, 2013, to December 31, 2013.
b) SB 635 (Ed Hernandez) of 2012 would have requires funds
deposited into the Managed Care Fund in excess of $1
million to be transferred each year to OSHPD for the
purpose of the Song-Brown, as specified. SB 635 died in
Assembly Appropriations Committee.
c) AB 589 established the STMSS Program to promote the
education of medical doctors and doctors of osteopathy, as
specified.
d) AB 2551 (Ed Hernandez) of 2010, would have established
the Health Workforce Development Fund (Fund), consisting of
moneys received from federal and private sources, as
specified, and would have authorized the Fund to be used,
upon appropriation by the Legislature, for prescribed
purposes relating to health workforce development, and
required the California Workforce Investment Board (CWIB)
and OSHPD to report specified information to the
Legislature annually, as specified. AB 2551 failed passage
on the Senate Floor.
e) AB 657 (Ed Hernandez) of 2009, would have required
OSHPD, in collaboration with the CWIB, to establish the
Health Professions Workforce Task Force composed of
specified members, to assist in the development of a health
professions workforce master plan for the State, and would
prescribe the functions and duties of the task force in
that regard. AB 657 was vetoed by the Governor, who stated
in his veto message that AB 657 was unnecessary and
duplicative of efforts already underway.
f) SB 1379 (Ducheny), Chapter 607, Statutes of 2008,
created the Managed Care Fund and provided the distribution
of the funding to the MUAP and the MRMIF.
g) AB 2375 (Ed Hernandez) of 2008, would have required
OSHPD to establish the Health Professions Workforce Task
Force, as specified, to assist in the development of a
health professions workforce master plan. AB 2375 was held
in the Senate Appropriations Committee.
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h) AB 2439 (De La Torre), Chapter 640, Statutes of 2008,
requires the MBC to assess an additional $25 fee for the
initial license and license renewal of a physician or
surgeon to support the Physician Loan Repayment Program.
Requires up to 15% of the funds collected from the
additional $25 fee to be dedicated to loan assistance for
physicians who agree to practice in geriatric care
settings, as specified.
i) AB 2543 (Berg) of 2008 would have established the
California Geriatric and Gerontology Student Loan
Assistance Program of 2008, which would have been
administered by OSHPD for purposes of providing loan
assistance to students who intend to become employed as
licensed health care professionals or social workers in a
geriatric care setting, as specified. AB 2549 was vetoed
by Governor Arnold Schwarzenegger, and in his veto message
he stated, "the provisions of this bill place an additional
licensing fee on an entire profession to provide
specialized loan assistance grants beyond the $10 surcharge
they already pay for the Mental Health Service Provider
Education Program. Unfortunately, this bill is
double-assessing the same profession for similar programs."
j) AB 327 (De La Torre), Chapter 293, Statutes of 2005,
requires the MBC to assess an applicant a $50 fee for the
issuance and renewal of a physician and surgeon's
certificate. Specifies that payment of the fee is
voluntary and directs the fees collected to the Medically
Underserved Account for the Physician Loan Repayment
Program.
aa) AB 920 (Aghazarian), Chapter 317, Statutes of 2005,
provides for the transfer of the Physician Loan Repayment
Program, and the Physician Volunteer Program from the MBC
to the California Physician Corps Program within HPEF,
effective July 1, 2006.
bb) AB 1403 (Nu�ez), Chapter 367, Statutes of 2002, renames
the California Physician Corps Loan Repayment Program of
2002 as the Physician Loan Repayment Program.
cc) AB 982 (Firebaugh), Chapter 1131, Statutes of 2002,
creates the California Physician Corps Loan Repayment
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Program of 2002, to be administered by the Division of
Licensing of MBC for the purpose of granting loan repayment
awards to physicians and surgeons working in medically
underserved communities.
6)POLICY QUESTION . With the implementation of the ACA
provisions which require community rating and health insurers
to issue policies to individuals, even those with preexisting
conditions, it is expected that high risk insurance pools may
no longer be necessary after 2014. As such the author
proposes amending existing law which redirects monies in the
MC Fund from MRMIP to this recently created program. The
policy changes of the ACA are transformational and will take
time to be fully realized. Further, there are some residual
populations who may not benefit from the ACA. At this time,
there has been no budget or policy action adopted to eliminate
MRMIP. The author and Committee may wish to delay the policy
decision to redirect these funds for the purposes of this bill
until an evaluation of the ongoing need for MRMIP has been
conducted.
REGISTERED SUPPORT / OPPOSITION :
Support
American College of Emergency Physicians, California Chapter
California Academy of Family Physicians
Opposition
None on file.
Analysis Prepared by : Rosielyn Pulmano / HEALTH / (916)
319-2097