BILL ANALYSIS �
AB 1176
Page 1
Date of Hearing: May 8, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 1176 (Bocanegra and Bonta) - As Amended: April 23, 2013
Policy Committee: HealthVote:12-6
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill establishes the Graduate Medical Education (GME)
Council and GME Fund and assesses health plans and insurers five
dollars ($5) annually per covered life to fund GME residency
training programs.
FISCAL EFFECT
1)Assessments on health plans and insurers based on more than 12
million covered lives would raise almost $61 million annually
for the GME fund.
2)Costs to the Office of Statewide Planning and Development
(OSHPD) Health Data and Planning Fund of $329,000 for FY
2013-14 and 2014-15 for start-up staffing and expenditures.
3)This bill has been keyed as a tax by Legislative Counsel,
requiring a 2/3 vote.
COMMENTS
1)Rationale . The California Medical Association and California
Academy of Family Physicians support this bill because there
are not enough primary care providers practicing in California
to treat those who will be newly insured under the Affordable
Care Act. California has about 12% of the nation's
population, but only 8.5% of its medical residents and
fellows. Other states, such as New York, Michigan, and
Maryland, have ensured physicians who want to train in their
states have that opportunity, and costs are spread out equally
among those who will benefit. The vast majority of physicians
who train in a region will remain in that region.
AB 1176
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2)GME Background . GME is a training program for medical school
graduates that serve as residents in more than 1,000 of the
nation's hospitals. Each year the federal government
contributes about $9.5 billion in Medicare funds, and
approximately $2 billion in Medicaid to help pay for GME. The
federal government also funds GME in children's hospitals
through a program called Teach Health Centers GME, which
trains residents in community-based ambulatory settings; and
through contributions from other agencies, including the
Department of Defense, the Department of Veterans Affairs, the
Health Resources and Service Administration, and the National
Institutes of Health. More than 40 states paid about $3.78
billion through their Medicaid programs to support GME in
2009. Since then, many states have reduced their support for
advanced medical training. Private insurers support GME to
some degree through payments they negotiate with teaching
hospitals.
3)GME and the Affordable Care Act (ACA). The ACA increases the
number of GME training positions by redistributing currently
unused slots, with priorities given to primary care and
general surgery and to states with the lowest resident
physician-to-population ratios (effective July 1, 2011);
increases flexibility in laws and regulations that govern GME
funding to promote training in outpatient settings (effective
July 1, 2010); and, ensures the availability of residency
programs in rural and underserved areas.
4)Health plan opposition . Health plans and insurers argue this
bill translates into a large premium increase for insured
Californians. Adding another tax would only further the
unaffordability of health care and could potentially price out
many Californians who are attempting to gain coverage for the
first time.
5)Related legislation . AB 565 (Salas) revises program criteria
of the Steven Thompson Loan Repayment Program (STLRP) and
revises the definition of practice setting for purposes of the
STLRP to include a private practice that provides primary care
located in a medically underserved area and has a minimum of
30% uninsured, Medi-Cal, or other publicly funded program that
serve patients under 250% of the federal poverty level. AB
565 is pending in this committee.
AB 1176
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AB 860 (Perea and Bocanegra) appropriates $600,000 from the
Managed Care Administrative Fines and Penalties Fund (Managed
Care Fund) to the Steven M. Thompson Medical School
Scholarship Program (STMSS Program) Account within HPEF. AB
860 is pending on this committee's Suspense File.
SB 20 (Ed Hernandez), pending on the Senate Appropriations
Committee's Suspense File, requires, beginning on the date
that the Major Risk Medical Insurance Program (MRMIP) becomes
inoperative, all the funds in the Managed Care Fund to be
transferred each year for purposes of the STLRP.
Analysis Prepared by : Debra Roth / APPR. / (916) 319-2081