BILL ANALYSIS Ķ
SB 20
Page 1
Date of Hearing: July 2, 2013
ASSEMBLY COMMITTEE ON HEALTH
Richard Pan, Chair
SB 20 (Ed Hernandez) - As Amended: February 14, 2013
SENATE VOTE : 38-0
SUBJECT : Health care: workforce training.
SUMMARY : Requires, beginning on the date that the California
Major Risk Medical Insurance Program (MRMIP) becomes
inoperative, all the fines and administrative penalties
deposited into the Managed Care Administrative Fines and
Penalties Fund (Managed Care Fund) to be transferred by the
Department of Managed Health Care (DMHC) to the Medically
Underserved Account for Physicians (MUAP) within the Health
Professions Education Fund (HPEF) for purposes of the Steven M.
Thompson Physician Corps Loan Repayment Program (STLRP), as
specified. Requires the Department of Finance to notify the
Joint Legislative Budget Committee when MRMIP becomes
inoperative. Provides that the funds transferred pursuant to
this bill are not to be used to fund the Physician Volunteer
Program. Makes other technical and clarifying changes.
EXISTING LAW :
1)Establishes 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.
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 DMHC beginning
September 1, 2009, and annually thereafter, as follows:
a) The first $1 million to be transferred to the MUAP
within the HPEF for purposes of the Physician Loan
Repayment Program, as specified; and,
b) Any amount over the first $1 million, including accrued
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interest, in the Managed Care Fund is to 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 Patient
Protection and 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
contracts with accredited medical schools and other programs
that train the above practitioners.
8)Establishes HPEF within the Office of Statewide Health
Planning and Development (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 STLRP and the Physician Volunteer Program,
administered by HPEF.
10)Requires STLRP to provide financial incentives, as specified,
to program applicants who possess a current valid medical or
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osteopathic license who practice in medically underserved
communities, as specified.
FISCAL EFFECT : According to the Senate Appropriations
Committee, ongoing costs in the low millions per year to support
physician loan repayments (General Fund). Over the last decade,
fines and penalties assessed by the DMHC have ranged from a low
of $640,000 to a high of $13 million, with an average of about
$3.6 million per year.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, the STLRP was
created in response to physician shortage in underserved
areas, but funding for the program has been unpredictable and
insufficient, with demand exceeding available funding every
year. This bill provides much-needed funding for the STLRP,
which provides loan-repayment assistance to physicians who
agree to practice in underserved areas for a minimum of three
years, by shifting monies no longer needed for MRMIP.
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 STLRP, and the remainder of
the funds is transferred to the Major Risk Medical
Insurance Fund for MRMIP.
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: $2.1 million;
2010-11: $3.7 million; and, 2011-12: $2.4 million
(estimated).
b) STLRP . STLRP was established in 2003 to encourage
recently licensed physicians to practice in HPSAs in
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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:
i) Priority consideration to applicants that are best
suited to meet the cultural and linguistic needs and
demands of patients from Medically Underserved
Populations (MUPs) and who meet one or more of the
following criteria:
(1) Speak a Medi-Cal threshold language;
(2) Come from an economically disadvantaged
background;
(3) Have received significant training in cultural
and linguistically appropriate service delivery;
(4) Have three years of experience working in
Medically Underserved Areas (MUAs) or with MUPs;
and/or,
(5) Have recently obtained a license to practice
medicine.
ii) A process for determining the need for physician
services identified by the practice setting, and for
ensuring that the practice setting qualifies;
iii) Preference to applicants who have completed a
three-year residency in a primary specialty (family
practice, internal medicine, pediatrics, or
obstetrics/gynecology);
iv) Placing the most qualified applicants in areas with
the greatest need;
v) A factor ensuring geographic distribution of
placements; and,
vi) Priority consideration to applicants who agree to
practice in a geriatric setting and are trained in
geriatrics, as specified.
c) Program Report to the Legislature . In 2012, OSHPD
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
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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 obligation.
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 selected.
d) Song-Brown . Song-Brown, administered by OSHPD, was
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, PCNPs, PAs, and RNs.
Song-Brown funds are used to train and educate residents
and students by providing clinical training in underserved
areas (Health Professional Shortage Areas (HPSAs), MUAs,
MUPs, 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) 30 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) 32 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
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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.
e) Healthcare Workforce Shortage . On March 23, 2010,
President Obama signed the ACA (Public Law (PL) 111-148),
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 . Supporters such as the Association of California
Healthcare Districts state that this bill has the potential to
encourage physicians to remain in underserved areas after
completing their service obligation which brings more
qualified physicians to areas that may not otherwise have a
physician to provide care. The Medical Board of California,
Osteopathic Physicians and Surgeons of California, and the
California Medical Association indicate this bill promotes
access to care and would help California meet the growing need
of practitioners in underserved areas/population.
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4)RELATED LEGISLATION .
a) AB 565 (Salas) revises program criteria of the 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 MUA 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 Senate Health Committee.
b) AB 860 (Perea and Bocanegra) appropriates $600,000 from
the Managed Care Fund to the Steven M. Thompson Medical
School Scholarship Program (STMSS Program) Account within
HPEF. AB 860 was held in the Assembly Appropriations
Committee's suspense file.
c) AB 1176 (Bocanegra and Bonta) establishes the Medical
Residency Training Program (MRT Program) to fund graduate
medical education (GME) residency programs in California.
Requires every health insurer or health care service plan
that provides health care coverage in this state to pay an
annual GME assessment of $5 for each covered life for
purposes of the MRT Program. AB 1176 was held in the
Assembly Appropriations Committee's suspense file.
d) SB 271 (Ed Hernandez) deletes the January 1, 2014,
sunset date, and makes permanent the Association Degree
Nursing Scholarship Pilot Program within OSHPD, and deletes
references to program as a pilot. SB 271 is currently in
the Assembly Health Committee.
5)PREVIOUS LEGISLATION .
a) AB 589 (Perea), Chapter 339, Statutes of 2012,
establishes the STMSS Program to promote the education of
medical doctors and doctors of osteopathy, as specified.
b) SB 635 (Ed Hernandez) of 2012 would have required funds
deposited into the Managed Care Fund in excess of $1
million to be transferred each year to OSHPD for the
purpose of Song-Brown, as specified. SB 635 died in
Assembly Appropriations Committee.
c) SB 606 (Ducheny), Chapter 600, Statutes of 2009,
requires the Osteopathic Medical Board of California to
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assess an additional $25 fee from an osteopathic physician
and surgeon applying for initial or reciprocity licensure,
or for a biennial renewal license. Requires the funds
collected to be transferred to the Medically Underserved
Account for Physicians for STLRP. Allows osteopathic
physicians and surgeons to be eligible to apply for the
STLRP.
d) SB 1379 (Ducheny), Chapter 607, Statutes of 2008,
requires fines and administrative penalties levied against
health plans under Knox-Keene to be placed in the Managed
Care Fund and used, upon appropriation by the Legislature,
for STLRP and the MRMIP. SB 1379 also appropriates $1
million annually for purposes of the STLRP.
e) AB 2439 (De la Torre), Chapter 640, Statutes of 2008,
requires the Medical Board of California (MBC) to charge
physicians and surgeons an additional $25 as part of their
initial license fee or renewal fee to support the STLRP.
f) AB 920 (Aghazarian), Chapter 317, Statutes of 2005,
transfers the administration of the STLRP from the MBC to
the HPEF.
g) AB 327 (De la Torre), Chapter 293, Statutes of 2005,
requires the MBC to assess a $50 voluntary donation from
physicians and surgeons at the time of licensure or
renewal.
h) AB 1403 (Nuņez), Chapter 367, Statutes of 2004, renames
the California Physician Corps Loan Repayment Program to
STLRP effective January 1, 2005.
i) AB 982 (Firebaugh), Chapter 1131, Statutes of 2002,
establishes the California Physician Corps Loan Repayment
Program within the MBC.
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 all the moneys
in the Managed Care Fund from MRMIP to the STLRP The policy
changes of the ACA are transformational and will take time to
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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
Association of California Healthcare Districts
California Association of Clinical Nurse Specialists
California Association of Physician Groups
California Communities United Institute
California Hospital Association
California Medical Association
California Optometric Association
California Primary Care Association
Hospital Corporation of America
Los Angeles County Board of Supervisors
Medical Board of California
National Association of Pediatric Nurse Practitioners
Osteopathic Physicians and Surgeons of California
Opposition
None on file.
Analysis Prepared by : Rosielyn Pulmano / HEALTH / (916)
319-2097