BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2048


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          Date of Hearing:  April 5, 2016


                            ASSEMBLY COMMITTEE ON HEALTH


                                   Jim Wood, Chair


          AB 2048  
          Gray - As Amended March 16, 2016


          SUBJECT:  National Health Service Corps State Loan Repayment  
          Program.


          SUMMARY:  Requires the Office of Statewide Health Planning and  
          Development (OSHPD), in its administration of the National  
          Health Service Corps State Loan Repayment Program (SLRP), to  
          include all federally qualified health centers (FQHCs) located  
          in California on the program's certified eligible site list.   
          Specifically, this bill:  


          1)Requires OSHPD to notify all certified eligible sites when the  
            program opens each application cycle, and to maximize, to the  
            extent possible, the number of applications received each  
            cycle.


          2)Prohibits OSHPD from requiring program applicants and  
            participants to provide matching funds in years that OSHPD  
            receives state matching funds.


          3)Requires OSHPD to submit an annual report to the Senate and  
            Assembly Committees on Health that includes all of the  
            following information:








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             a)   The number of applications received during the annual  
               application cycle;
             b)   The percentage of applicants who were awarded funding  
               under the program; and,


             c)   The percentage of funding that went to each geographic  
               region in the state.


          4)Continuously appropriates $1 million from the General Fund  
            (GF), without regard to fiscal year, to OSHPD for purposes of  
            providing state matching funds for the SLRP.
          EXISTING LAW:  Requires OSHPD, in its administration of the SLRP  
          to strive, whenever feasible, to equitably distribute loan  
          repayment awards between eligible urban and rural program sites,  
          after taking into account the availability of health care  
          services in the communities to be served and the number of  
          individuals to be served in each program site.


          FISCAL EFFECT:  This bill has not been analyzed by a fiscal  
          committee.


          COMMENTS:  


          1)PURPOSE OF THIS BILL.  According to the author, FQHCs are  
            safety net providers that serve some of the nation's most  
            vulnerable populations.  The author states they are required  
            to offer services to all persons regardless of their ability  
            to pay, be a nonprofit or public organization, serve a  
            medically underserved area, and provide comprehensive primary  
            care services.  The author contends that FQHCs reduce health  
            disparities by serving populations that would otherwise not  
            have access to services, and care received at these centers is  








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            ranked among the most cost-effective, producing $24 billion in  
            annual health system savings, yet studies have found that the  
            quality of care provided is equal to or even greater that the  
            quality of care provided elsewhere.



            The author notes the SLRP was created in 1987 to increase and  
            retain the number of primary care physicians, dentists, nurse  
            practitioners, pharmacists, and mental and behavioral  
            specialists in Health Professional Shortage Areas (HPSAs), and  
            while the SLRP is an important program to recruit healthcare  
            professionals to communities in need, FQHCs face burdensome  
            obstacles to participation.  The author states that, despite  
            their federal designation, each FQHC is required to submit an  
            application to be placed on the list of Certified Eligible  
            Sites (CES) before applicants from their facility may be  
            considered for loan repayment.  Additionally, FQHCs must renew  
            their application every three years to continue participation  
            in the SLRP.  The author contends that, as a result of these  
            requirements, less than one-third of the health centers in the  
            state are currently listed on the CES.  The author also notes  
            that federal SLRP dollars require a state match, and, while  
            other states provide this match themselves, California has  
            shifted that cost onto the health centers.  The author points  
            out that California receives only $1 million in federal  
            funding annually, and many small and medium size health  
            centers that cannot afford to provide matching funds are  
            precluded from SLRP participation.



            The author concludes that this bill will streamline  
            participation in the SLRP by eliminating CES application and  
            renewal requirements for FQHCs, creating notification and  
            reporting requirements to keep health centers and the  
            Legislature informed about the program, and lifting the  
            financial burden of providing matching funds off the shoulders  
            of the health centers.








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          2)BACKGROUND.  
          
             a)   FQHCs.  As noted by the author, FQHCs serve a  
               significant portion of the uninsured and underinsured in  
               California.  They are open-door providers that treat  
               patients on a sliding scale fee structure and make their  
               services available regardless of a patient's ability to  
               pay.  There are approximately 600 FQHCs in California.  All  
               FQHCs are either non-profit community clinics or government  
               entities.  Community clinics and health centers provide  
               health care to 14% of Californians.  This figure is even  
               higher in rural or remote areas that struggle to attract  
               and retain health care providers.  

             b)   The California State Loan Repayment Program.  SLRP was  
               congressionally authorized in 1987 under the U.S. Public  
               Health Services Act.  SLRP increases the number of primary  
               care physicians, dentists, dental hygienists, physician  
               assistants, nurse practitioners, certified nurse midwives,  
               pharmacists and mental/behavioral health providers  
               practicing in federally designated California HPSAs.  SLRP  
               authorizes repayment of qualified educational loans for  
               eligible primary health care professionals, who must commit  
               to an initial two year full-time or four year half-time  
               service agreement to provide direct patient care in a  
               primary, dental, or mental health HPSA.   



             In order for a site to be eligible to host SLRP providers, it  
               must:

               i)     Be located in a federally designated HPSA; 
               ii)    Be a public or private, not-for-profit, out-patient  
                 facility; 










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               iii)   Match the SLRP award, on a dollar-for-dollar basis;


               iv)    Pay the provider a prevailing wage; and, 


               v)     Provide services on a free or reduced fee schedule  
                 basis to individuals at or below 200% of the federal  
                 poverty level.


               The purpose of the CES list is to identify those sites that  
               are located in a HPSA and agree to match the SLRP award  
               amount.  When a site submits a CES application, SLRP  
               determines if the site is located in a HPSA, if the site is  
               in Northern, Central, or Southern California, and if it is  
               in a Rural, Urban, or Frontier area.  (A "Frontier area" by  
               federal definition, is an area with population density of  
               less than 11 persons per square mile).  HPSA site  
               designations are valid for three years; then they must be  
               recertified by SLRP to ensure they are still located in a  
               HPSA.  If a site loses its HPSA designation, it is no  
               longer an eligible site.  FQHCs are automatically approved  
               HPSA designations through the NHSC.  However, SLRP does not  
               currently automatically approve all FQHCs; if SLRP did, it  
               would be assuming all FQHCs could match the SLRP award  
               amount. 



               SLRP is federally funded through a grant from the Health  
               Resources and Services Administration.  SLRP receives $1  
               million per grant year.  The number of awards given out  
               depends upon how many applications are received.  Because  
               the purpose of SLRP is to recruit and retain high quality  
               healthcare professionals working in HPSAs, applicants  
               requesting an extension usually receive an award.

               The table below shows the areas of the state where current  








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               awarded providers are practicing:  


           


               --------------------------------------------------------- 
              |       2013       |       2014        |       2015       |
               --------------------------------------------------------- 
              |---------+--------+----------+--------+---------+--------|
              |Central  |Frontier|Central   |Frontier|Central  |Frontier|
              |       13|       0|        28|       0|       26|       0|
              |---------+--------+----------+--------+---------+--------|
              |Northern |Rural   |Northern  |Rural   |Northern |Rural   |
              |       10|      11|        10|      21|       12|      15|
              |---------+--------+----------+--------+---------+--------|
              |Southern |Urban   |Southern  |Urban   |Southern |Urban   |
              |       21|      33|        32|      49|       25|  48    |
               --------------------------------------------------------- 



             c)   SLRP participation.  Currently, there are 415 SLRP  
               Certified Eligible Sites: 392 primary care, 165 mental  
               health, and 135 dental health.  Four are located in  
               Frontier areas, 140 in Rural areas, and 271 in Urban areas.

             OSHPD notifies all CES when the application cycle opens up  
               each year. OSHPD/SLRP sends stakeholder announcements,  
               updates the SLRP Website and contacts current awardees  
               (healthcare providers) who are eligible for an extension  
               award.  The CES application is open year-round.  The  
               provider application cycle is tentatively set for August 1  
               to October 1 of each year but has varied the last few years  
               due to the implementation of OSHPDs online application  
               system.

          3)SUPPORT.  The California Primary Care Association, Community  
            Clinic Association of Los Angeles, and Redwood Community  








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            Health Coalition all support this bill stating that it is a  
            simple, yet effective way to support community health centers  
            ability to recruit and retain providers by strengthening SLRP.  
             The proponents note that at a time when our state's  
            underserved communities are grappling with a severe and  
            growing primary care provider shortage, SLRP increases the  
            number of primary care providers practicing in federally  
            designated HPSAs, however SLRP is currently structured in a  
            way that disincentives participation among FQHCs who serve  
            low-income and uninsured communities.  The supporters conclude  
            that this bill will address these challenges by streamlining  
            participation in the SLRP through automatic enrollment for  
            FQHCs as CES. 



          The Association of California Healthcare Districts (ACHD) notes  
            that as the demand for physicians rises with the  
            implementation of the Pateint Protection and Affordable Care  
            Act, it is of utmost importance that California be innovative  
            in addressing physician shortage issues in underserved areas,  
            where many FQHC's operate.  ACHD also states, by appropriating  
            the necessary funds for the SLRP, California will continue to  
            promote access to healthcare in the most underserved areas of  
            the state.
          4)PREVIOUS LEGISLATION.  AB 820 (Nakanishi) Chapter 682,  
            Statutes of 2003, requires OSHPD, in administering SLRP, to  
            strive, whenever feasible, to equitably distribute loan  
            repayment awards between urban and rural program sites, after  
            taking into account the availability of health care services  
            in the communities to be served and the number of  individuals  
            to be served in each program site.  Requires that all eligible  
            applications be given consideration before any award is  
            granted.



          5)TECHNICAL AMENDMENT.  As currently drafted this bill requires  
            OSHPD to include all FQHCs located in California on the SLRP  








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            program's CES list.  However, by deleting the requirement for  
            FQHCs to reapply to be on the list, this bill removes the  
            mechanism by which SLRP/OSHPD determines if an FQHC is still  
            in a HPSA and willing to match the funds.  This bill should be  
            amended to require the provider's site to certify their  
            agreement to match the SLRP award as part of the provider's  
            application in any year OSHPD does not receive state matching  
            funds.


          REGISTERED SUPPORT / OPPOSITION:


          Support


          APLA Health & Wellness


          Association of California Healthcare Districts


          California Primary Care Association


          Central Valley Health Network


          Coalition of Orange County Community Health Centers


          Community Clinic Association of Los Angeles


          Community Clinic Consortium


          Health Alliance of Northern California









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          La Clinicia de La Raza


          Los Angeles LGBT Center


          Marin Community Clinics


          Neighborhood Healthcare


          Northeast Valley Health Corporation


          Redwood Community Health Coalition


          Sacramento Native American Health Center, Inc.


          San Ysidro Health Center


          South Central Family Health Center





          Opposition


          None on file.












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          Analysis Prepared by:Lara Flynn / HEALTH / (916) 319-2097