BILL ANALYSIS �
AB 860
Page 1
Date of Hearing: May 1, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 860 (Perea and Bocanegra) - As Amended: April 8, 2013
Policy Committee: HealthVote:18-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill revises the distribution scheme for funds from the
Managed Care Administrative Fines and Penalties Fund (Penalty
Fund) by requiring $600,000 to be transferred to the Steven M.
Thompson Medical School Scholarship Program (Steve Thompson
Scholarship Fund) before any funds are transferred to the Major
Risk Medical Insurance Program (MRMIP).
FISCAL EFFECT
Potentially significant impact on MRMIP up to a maximum of
$600,000. The size of the Penalty Fund varies based on
Department of Managed Health Care (DMHC) enforcement actions.
Penalty Fund transfers to MRMIP have been as high as $10 million
(2008-09) and as low as $93,000 (2012-13).
COMMENTS
1)Rationale . Existing law requires the first $1 million in the
Penalty Fund to go to the Medically Underserved Account for
Physicians (MUAP) to be used for the Steven M. Thompson
Physician Corps Loan Repayment Fund (Steve Thompson Loan
Fund). Any amounts above the first $1 million go to MRMIP.
The author intends to address California's chronic undersupply
of primary care services and asserts MRMIP's role is being
filled by Covered California, the new health benefit exchange
created as a result of federal health reform, freeing up money
in the Penalty Fund for other uses. Supporters, including the
California Chapter of the American College of Emergency
Physicians and the California Academy of Family Physicians,
argue this bill will improve access to care in underserved
areas.
AB 860
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2)MRMIP Background . MRMIP is a high-risk insurance pool
operated by the Managed Risk Medical Insurance Board (MRMIB)
since 1991 to provide coverage to individuals unable to buy
coverage in the individual insurance market due to
pre-existing conditions. Most of MRMIP's funding comes from
the Proposition 99 Cigarette and Tobacco Products Surtax. The
Governor's proposed budget indicates MRMIP will phase-out with
implementation of health reform, but it is unclear exactly
when this will occur. MRMIB uses the money it receives from
the Penalty Fund for amounts owed to health plans for
reconciliation of prior year services.
3)Related Legislation . SB 20 (Ed Hernandez), pending on the
Senate Appropriations Committee Suspense File, requires all
the Penalty Fund monies to be used for the Steve Thompson Loan
Fund.
AB 1176 (Bocanegra), pending in this committee, establishes
the Graduate Medical Education Fund (GME) and requires an
annual assessment, on health insurers and health plans, of
five dollars for each covered life, to fund the GME.
Analysis Prepared by : Debra Roth / APPR. / (916) 319-2081