BILL ANALYSIS Ó AB 2048 Page 1 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: AB 2048 Page 2 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 AB 2048 Page 3 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. AB 2048 Page 4 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; AB 2048 Page 5 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 AB 2048 Page 6 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 AB 2048 Page 7 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 AB 2048 Page 8 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 AB 2048 Page 9 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. AB 2048 Page 10 Analysis Prepared by:Lara Flynn / HEALTH / (916) 319-2097