BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 271
                                                                  Page  1

          Date of Hearing:  July 2, 2013

                            ASSEMBLY COMMITTEE ON HEALTH
                                 Richard Pan, Chair
              SB 271 (Ed Hernandez) - As Introduced:  February 14, 2013

           SENATE VOTE  :  38-0
           
          SUBJECT  :  Associate Degree Nursing Scholarship Program.

           SUMMARY  :  Deletes the January 1, 2014 sunset date, and makes  
          permanent the Associate Degree Nursing Scholarship Pilot Program  
          (ADN Scholarship Program), and deletes references to the program  
          as a pilot.    

           EXISTING LAW  :  

          1)Establishes, until January 1, 2014, the ADN Scholarship  
            Program in the Office of Statewide Health Planning and  
            Development (OSHPD) to increase the number of registered  
            nurses RNs) and to encourage RNs to practice direct patient  
            care in medically underserved areas (MUAs) of California. 

          2)Establishes the Health Professions Education Foundation (HPEF)  
            within OSHPD, among other functions, to administer the ADN  
            Scholarship Program.

          3)Establishes the Registered Nurse Education Fund (RNEF) for  
            purposes of the California Registered Nurse Education Program.  
             Requires RNEF to receive money collected from assessments of  
            RNs.

          4)Establishes the Board of Registered Nursing (BRN) to regulate  
            the practice of RNs.  Requires the BRN to assess a biennial  
            fee for the renewal of an RN license which is not to be less  
            than $75 and no more than $150.  Requires the BRN to  
            additionally collect an assessment of $10 to be credited to  
            the RNEF.

           FISCAL EFFECT  :  According to the Senate Appropriations  
          Committee, there will be ongoing costs of about $700,000 per  
          year to provide scholarships and administer grants (special  
          fund).  Over the last five years, scholarship awards (including  
          administrative costs) have ranged from about $400,000 to  
          $780,000 with an average of about $650,000.








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           COMMENTS  :

           1)PURPOSE OF THIS BILL  .  According to the author, implementation  
            of the Patient Protection and Affordable Care Act will bring  
            millions of uninsured Californians into the health care  
            delivery system in 2014, exacerbating an existing health  
            provider shortage. Coupled with a disproportionate geographic  
            distribution of providers and an aging workforce, this  
            shortage has significant potential to negatively impact  
            patient care.  While the nation has been experiencing a  
            shortage of nurses for more than a decade, the shortage has  
            been particularly acute in California, where it is exacerbated  
            by higher education budget cuts.  The nursing shortage has  
            also resulted in a diminished ability to educate the incoming  
            population of nursing students.  This bill will ensure that  
            this valuable program continues to operate, providing patient  
            access to practitioners in MUAs.

           2)BACKGROUND  .  

              a)   ADN Scholarship Program  .  The ADN Scholarship Program  
               was established to increase the number of registered nurses  
               and to encourage nurses to practice direct patient care in  
               MUAs of California.  Students who are currently enrolled or  
               accepted into an Associate Degree Nursing Program and are  
               free from any other service obligation may receive up to  
               $10,000 for one academic year.  In return for receiving the  
               scholarship, awardees must agree to practice direct patient  
               care for two years in a MUA of California.  Specifically,  
               the ADN Scholarship Program is available only to students  
               in counties determined to have the most need.  Need in a  
               county is established based on all the following factors:  
               a) Counties with a RN-to-population ratio equal or less  
               than 500 RNs per 100,000 individuals; b) County  
               unemployment rate; and, c) County level of poverty.  The  
               HPEF shall consider the applicant's economic need and  
               cultural and linguistic skills and abilities.  Funding for  
               the ADN Scholarship Program comes from the Registered Nurse  
               Education Fund which in turn is funded by $10 assessment on  
               the biennial renewal license fees paid for by RNs to the  
               BRN.

             According to OSHPD, the current demand for ADN scholarships  
               vastly outweighs the supply of available funding for the  








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               program.  Since May 2003 and through September 2011, HPEF  
               has received $10.6 million in scholarship applications and  
               $3.2 million in ADN scholarships were awarded.  The table  
               below illustrates the demand for this program in the last  
               10 years:

                 ---------------------------------------------------------- 
                | Calendar |    Applications    |          Funds           |
                |   Year   |  Received          |   Requested              |
                |          |      Awarded       |         Awarded          |
                 ---------------------------------------------------------- 
                |----------+--------+-----------+-----------+--------------|
                |   2003   |    94  |    29     |$          |  $ 103,500   |
                |          |        |           |     752,000|              |
                |----------+--------+-----------+-----------+--------------|
                |   2004   |  155   |    23     |$1,240,000 |  $ 152,000   |
                |----------+--------+-----------+-----------+--------------|
                |   2005   |  160   |    35     |$1,120,000 |  $ 214,000   |
                |----------+--------+-----------+-----------+--------------|
                |   2006   |  110   |    29     |$          |  $ 152,000   |
                |          |        |           |     524,000|              |
                |----------+--------+-----------+-----------+--------------|
                |   2007   |  133   |    65     |$          |  $ 476,000   |
                |          |        |           |     824,000|              |
                |----------+--------+-----------+-----------+--------------|
                |   2008   |  205   |    53     |$          |  $ 343,000   |
                |          |        |           |     580,000|              |
                |----------+--------+-----------+-----------+--------------|
                |   2009   |  213   |    61     |$1,305,000 |  $ 575,000   |
                |----------+--------+-----------+-----------+--------------|
                |   2010   |  247   |    71     |$2,215,000 |  $ 615,952   |
                |----------+--------+-----------+-----------+--------------|
                |   2011   |  204   |    64     |$2,040,000 |  $ 484,836   |
                |----------+--------+-----------+-----------+--------------|
                |   2012   |  203   |     *     |$2,030,000 |              |
                |          |        |           |           | *            |
                 ---------------------------------------------------------- 
                       * Funding cycle is scheduled for February 2013

           b)Steven M. Thompson Physician Corps Loan Repayment Program  
            (STLRP)  .  STLRP was established in 2003 to encourage recently  
            licensed physicians to practice in health professions shortage  
            areas, as defined, 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.  In 2012,  








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            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 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.  

           3)SUPPORT  .  The Association of California Healthcare Districts  
            states that this bill provides a process to increase health  
            care services and helps increase access to care in the most  
            underserved areas of California.  According to SEIU  
            California, scholarships are an effective means of increasing  
            the supply of educated and trained health professionals.  The  
            HPEF's applicants and awardees for the ADN Scholarship Program  
            represent the state's diverse populations, increasing access  
            to quality and to culturally and linguistically appropriate  
            practitioners in MUAs.  The California Hospital Association  
            states that while the supply of RNs is presently stable, 50%  
            of California's RNs with active licenses are over the age of  
            50 and are predicted to retire or reduce hours as the economy  
            improves.  While the RN supply numbers are fairly steady, the  
            demand-drivers for nurses for the coming decade are very  
            uncertain, and this bill would assist in alleviating the  
            shortage.   

           4)RELATED LEGISLATION  .  

             a)   AB 565 (Salas) revises program criteria of the Steven M.  
               Thompson Physician Corps 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 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. 









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             b)   AB 860 (Perea and Bocanegra) appropriates $600,000 from  
               the Managed Care Administrative Fines and Penalties Fund to  
               the Steven M. Thompson Medical School Scholarship 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 20 (Ed Hernandez) requires, beginning on the date  
               that the California Major Risk Medical Insurance Program  
               becomes inoperative, all the fines and administrative  
               penalties deposited into the Managed Care Administrative  
               Fines and Penalties Fund to be transferred by the  
               Department of Managed Health Care to the Medically  
               Underserved Account for Physicians within HPEF for purposes  
               of the STLRP, as specified.  SB 20 is pending in this  
               Committee.

           5)TECHNICAL AMENDMENTS . The Health and Safety Code reference for  
            the source of funding for the RNEF, which funds ADN  
            Scholarships, should be updated as follows:
           128400  .  There is hereby established in the State Treasury the  
            Registered Nurse Education Fund.  All money in the fund shall  
            be used for the purposes specified in the California  
            Registered Nurse Education Program established pursuant to  
            this article. This fund shall receive money collected pursuant  
            to subdivision  (c)   (d)  of Section 2815  and Section 2815.1  of  
            the Business and Professions Code.

           6)POLICY SUGGESTION  .  Similar to the general data that is  
            submitted to the Legislature for purposes of the STLRP, the  
            Committee may wish to recommend that OSHPD publish on its  
            Website program updates and statistics about the ADN  
            Scholarship Program.

           REGISTERED SUPPORT / OPPOSITION  :

           Support 








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          American Federation of State, County and Municipal Employees,  
          AFL-CIO
          Association of California Healthcare Districts
          California Association for Health Services at Home
          California Hospital Association
          California Nurses Association
          California Optometric Association
          California Primary Care Association
          Hospital Corporation of America 
          Rural County Representatives of California
          SEIU California
          United Nurses Association of California/Union of Health Care  
          Professionals
           
            Opposition 
           
          None on file.

           Analysis Prepared by  :    Rosielyn Pulmano / HEALTH / (916)  
          319-2097