BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 2048 (Gray) - National Health Service Corps State Loan
Repayment Program
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|Version: May 27, 2016 |Policy Vote: HEALTH 8 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 1, 2016 |Consultant: Brendan McCarthy |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 2048 would make all federally qualified health
centers eligible to participate in the National Health Service
Corps State Loan Repayment Program. The bill would authorize the
Office of Statewide Health Planning and Development, upon
appropriation, to use state funds to provide federally required
matching funds.
Fiscal
Impact:
No significant fiscal impact is anticipated by automatically
making all federally qualified health centers eligible to
participate. Automatically putting all federal qualified
health centers on the eligible list does not guarantee any
funding from the state, it only makes them automatically
eligible to participate, providing they meet other program
requirements.
Potential additional administrative costs, up to $180,000 per
AB 2048 (Gray) Page 1 of
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year to process additional applications (General Fund or
federal funds). The Office of Statewide Health Planning and
Development indicates that it anticipates receiving additional
applications from FQHCs, because the bill would remove an
existing administrative requirement that they apply for
inclusion in the eligible site list. Most likely, the Office
would only receive a significant number of additional
applications in years in which the state provides the matching
funds currently required of participating clinics.
Potential future costs, up to $1 million per year, to provide
federally-required matching funds (General Fund). The bill
would authorize the Office, upon appropriation of the
Legislature, to use state funds to provide the
federally-required matching funds. Currently, the state
received $1 million per year from the federal government,
which must be matched by an equal amount of state or other
non-federal funds (in recent years matching funds have been
provided by participating clinics).
Background: The National Health Service Corps State Loan Repayment Program
is a federal program that provides funding to the states to
provide loan repayments to qualified health care providers
working in underserved areas. The state receives $1 million per
year in federal funding and federal law requires an equivalent
match using non-federal funds. The state currently requires
participating clinics to put up the required matching funds. The
program requires a two or four year commitment from the health
care provider and provides up to $50,000 per award. Under
current law, clinics that wish to participate in the program
must apply the Office of Statewide Health Planning and
Development to be included in the eligible site list, and must
reapply every three years to remain on the eligible site list.
Being on the eligible site list does not mean that clinics are
automatically considered for participation in the program.
Clinics that wish to participate must also apply for funding.
Proposed Law:
AB 2048 would make all federally qualified health centers
eligible to participate in the State Loan Repayment Program.
The bill would authorize the Office of Statewide Health Planning
and Development, upon appropriation, to use state funds to
AB 2048 (Gray) Page 2 of
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provide federally required matching funds.
Staff
Comments: To the extent that future state funds are
appropriated for this program, it would not increase the overall
number of health care professionals that are participating in
the program. Rather, it would reduce the financial burden on
clinics to provide the federally-required matching funds. In
recent years, the Office has been able to award all of the
available federal funding, indicating that the matching
requirement imposed on clinics is not a barrier to providing
funding to health care professionals. If the Legislature wishes
to improve its health care workforce in underserved areas, it
would be more effective to use any future state funding to make
additional awards to qualifying health care providers.
The Office indicates that there would be additional applications
because the bill removes the requirement that clinics first
apply for inclusion in the eligible site list before applying
for grant funds. Given that the Office has exhausted its
available funding each year and that clinics typically have a
matching requirement (which could be relaxed under the bill),
staff does not believe that there is likely to be a significant
increase in the number of applications in years in which clinics
are required to provide the matching funds.
The recently enacted 2016-17 Budget Act includes $33.3 million
per year for three years from the General Fund to support new
and existing primary care residency positions. (Funding will not
be available for use until federal approval of the state's
hospital quality assurance fee has been granted, likely in the
spring of 2017.) However, that funding is specifically
appropriated to an existing grant program (the Song-Brown
Program) and would not be available to provide the non-federal
match authorized in this bill.
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