BILL ANALYSIS Ó SENATE COMMITTEE ON HEALTH Senator Ed Hernandez, O.D., Chair BILL NO: SB 22 --------------------------------------------------------------- |AUTHOR: |Roth | |---------------+-----------------------------------------------| |VERSION: |April 21, 2015 | --------------------------------------------------------------- --------------------------------------------------------------- |HEARING DATE: |April 29, 2015 | | | --------------------------------------------------------------- --------------------------------------------------------------- |CONSULTANT: |Melanie Moreno | --------------------------------------------------------------- SUBJECT : Residency training. SUMMARY :1. Requires the Office of Statewide Health Planning and Development (OSHPD) to establish a non-profit public benefit corporation to be known as the California Medical Residency Training Foundation (Foundation), as specified. Requires the Foundation to be governed by a board of trustees consisting of a total of 13 members, as specified. Specifies the duties of the Foundation and OSHPD for the purposes of establishing and funding new residency positions in medically underserved areas of the state. Existing law: 1.Establishes the California Healthcare Workforce Policy Commission (Commission) and requires the Commission to, among other things, identify specific areas of the state where unmet priority needs for primary care family physicians and registered nurses exist; establish standards for family practice training programs, family practice residency programs, primary care physician assistants programs, and programs that train primary care nurse practitioners; and review and make recommendations to OSHPD concerning the funding of those programs that are submitted to the Health Professions Development Program for participation in the state medical contract program. 2.Establishes the Health Professions Education Foundation (HPEF) within OSHPD. Requires the HPEF to solicit and receive funds from Foundations and other private and public sources and to provide financial assistance in the form of scholarships or loans to students in the health professions who are from underrepresented groups. Provides that HPEF governed by a board consisting of 13 members appointed by the Governor, SB 22 (Roth) Page 2 of ? Speaker of the Assembly, and Senate Rules Committee. 3.Establishes, under the HPEF, scholarship, loan, and loan repayment programs for registered nurses, vocational nurses, geriatric nurse practitioners, clinical nurse specialists, and mental health professionals who agree to practice for specified periods of time in underserved areas and in designated practice settings, as specified. 4.Establishes, under HPEF, the Steven M. Thompson Physician Corps Loan Repayment Program (STPCLRP), which provides for the repayment of educational loans for licensed physicians and surgeons who practice in medically underserved areas of the state, as defined. Requires HPEF, in administering the STPCLRP, to use and develop guidelines for applicants that give preference to applicants who are best suited to meet the cultural and linguistic needs of patients in medically underserved populations, as specified, and who agree to practice in geriatric care settings. Also allows HPEF to appoint a selection committee to provide policy direction and guidance to the STPCLRP. Requires funds for loan repayment under the STPCLRP to have a funding match from a Foundation or other private source. Establishes a Medically Underserved Account for Physicians within the Fund, the primary purpose of which is to provide funding for the STPCLRP. 5.Establishes within OSHPD the Health Professions Education Fund to receive funds for scholarships and loans to students from underrepresented groups who are enrolled in or accepted to schools of medicine, dentistry, nursing, and other health professions. Provides that moneys in the fund are continuously appropriated. 6.Establishes the Song-Brown Health Care Workforce Training Act of 1973 (Song-Brown Act), administered by OSHPD to provide financial support to family practice residency programs, nurse practitioner and physician assistant programs, and registered nurse education programs to increase the number of students and residents receiving education and training in family practice and nursing. The Song-Brown Act also encourages universities and primary care health professionals to provide health care in medically underserved areas. This bill: 1.Requires OSHPD to establish a non-profit public benefit SB 22 (Roth) Page 3 of ? corporation to be known as the Foundation, which is required to be governed by a board of trustees consisting of a total of 13 members. 2.Requires nine members to be appointed by the Governor, one member appointed by the Speaker of the Assembly, one member by the Senate Committee on Rules, and two members of the Medical Board of California (MBC) by the MBC. Permits the board members appointed by the Governor, the Speaker of the Assembly, and the Senate Committee on Rules to include representatives of public and private hospitals, community clinics, public and private health insurance providers, the pharmaceutical industry, associations of health care practitioners, and other appropriate members of health or related professions. 3.Requires all persons considered for appointment to have an interest in increasing the number of medical residencies in the state, an interest in increasing access to health care in underserved areas of California, and the ability and desire to solicit funds for the purposes of this chapter, as determined by the appointing power. 4.Requires the chairperson to be a non-voting, ex officio member of the board. Requires the Governor to appoint the president of the board from among those members appointed by the Governor, the Assembly, the Senate, and the MBC. Requires the initial terms to be as follows: a. Governor appointees: three members to serve a one-year term, three members to serve a two-year term, and three members to serve a three-year term; b. Assembly and Senate appointees: four-year terms; c. MBC appointees: four-year term; and, d. Upon expiration of the initial appointments: four-year terms. 5.Permits the OSHPD director, after consultation with the president of the board, to appoint a council of advisers comprised of up to nine members, to advise the director and the board on technical matters and programmatic issues related to the Foundation. 6.Requires board and council members to serve without SB 22 (Roth) Page 4 of ? compensation, but to be reimbursed for any actual and necessary expenses incurred in connection with their duties as a board or council member. Requires members appointed by the MBC to be reimbursed by the MBC for any actual and necessary expenses, as specified. 7.Prohibits any board member from being considered to be engaged in activities inconsistent and incompatible with his or her duties solely as a result of membership on the MBC. 8.Makes the Foundation subject to the Non-profit Public Benefit Corporation Law, except that if there is a conflict with this bill and that law, this bill prevails. 9.Requires the Foundation to: a. Solicit and accept funds from business, industry, Foundations, and other private or public sources for the purpose of establishing and funding new residency positions in medically underserved areas of the state; b. Encourage public and private sector institutions, including hospitals, colleges, universities, community clinics, and other health agencies and organizations to identify and provide locations for the establishment of new residency positions in the medically underserved areas of the state; c. Make recommendations to the OSHPD director on the establishment of new residency positions, including the locations, fields of practice, and levels of funding in order to fulfill the goals of this bill; d. Recommend to the OSHPD director the disbursement of moneys deposited in the California Medical Residency Training Fund to establish and fund residency positions; e. Recommend to the OSHPD director that a portion of the funds solicited from the private sector be used for the administrative requirements of the Foundation; and, f. Prepare and submit an annual report to the Legislature documenting the amount of money solicited from the private sector, the amount of money deposited from the Foundation into the fund, the recommendations SB 22 (Roth) Page 5 of ? for the location and fields of practice of future residency positions, and the prospective fundraising goals. 10.Requires OSHPD to: a. Provide technical and staff support to the Foundation in meeting all of its responsibilities; b. Provide financial management for the Foundation; c. Establish, with the recommendation of the board, criteria for ranking the geographical areas of the state that have the highest need for primary care residencies, and give preference to proposals that would establish residency positions in these areas. Requires the criteria to be based the size of an area's population that is enrolled in, or eligible for, Medi-Cal and the shortage of primary care physicians in the area; d. Solicit proposals for new residency positions from public and private sector institutions, including hospitals, colleges, universities, community clinics, and other health agencies and organizations that train primary care residents; e. Establish a uniform process that requires that these proposals contain all necessary and pertinent information, including, but not limited to, the location of the proposed residency position; the medical practice area of the proposed residency position; information that demonstrates the area's need for the proposed residency position and for additional primary care practitioners; and, the amount of funding required to establish and operate the residency position; f. Enter into contracts with public and private sector institutions, including hospitals, colleges, universities, community clinics, and other health agencies and organizations in order to fund and establish residency positions at, or in association with, these institutions. Requires the OSHPD director to seek the recommendations of the Commission and Foundation as to which proposals best fulfill this bill's objective; g. Prior to the first distribution of funds for any new residency position, ensure that the residency SB 22 (Roth) Page 6 of ? position has been, or will be, approved by the Accreditation Council for Graduate Medical Education; h. Provide the following information to the board: i. The areas of the state that are deficient in primary care services; ii. The areas of the state that have the highest number of Medi-Cal enrollees and persons eligible to enroll in Medi-Cal, by proportion of population; iii. The proposals received from institutions that train primary care physicians pursuant d) above; iv. Other information that OSHPD or the board finds relevant to assist the board in making its recommendations on possible locations for new residency positions; i. Monitor the residencies established pursuant to this chapter; and, j. Prepare and submit an annual report to the Foundation and the Legislature documenting the amount of money contributed to the fund by the Foundation, the amount of money expended from the fund, the purposes of those expenditures, the number and location of residency positions established and funded, and recommendations for the location of future residency positions. 11.Establishes the Medical Residency Training Fund is hereby created within the State Treasury. Specifies that the primary purpose of the fund is to allocate funding for new residency positions throughout the state and requires money in the fund to also be used to pay for the cost of administering the goals of the Foundation, and for any other purpose authorized by this bill. 12.Makes the level of expenditure by OSHPD for the administrative support of the Foundation is subject to review and approval annually through the State Budget process. 13.Permits OSHPD and the Foundation to solicit and accept public and private donations for deposit in the fund, and makes all money in the fund continuously appropriated to OSHPD for the purposes of this chapter. Requires OSHPD to manage this fund SB 22 (Roth) Page 7 of ? prudently in accordance with applicable laws. 14.Requires any regulations adopted to implement this to be emergency regulations, as specified. FISCAL EFFECT : This bill has not been analyzed by a fiscal committee. COMMENTS : 1.Author's statement. According to the author, California has a critical shortage of primary care physicians. In order to maintain our current rate of utilizations, we must train 8000 more primary care physicians by 2030. Our statewide shortage is further aggravated by misdistribution. Only 16 of California's 58 counties meet the recommended 60-80 primary care physicians per 1,000 people. With an increasing Medi-Cal population, these already underserved areas will see their services stretched even thinner. SB 22 will create a voluntary public-private partnership to fund additional primary care physician residency positions to be placed in these underserved areas of California. By providing a state match of up to $20 million for private contributions, SB 22 would create a fund to provide additional residency positions while allowing a state sanctioned but privately run non-profit organization have a say in the distribution of the positions within these areas. By working closely with private and public stakeholders, the bill aims to create a consensus based solution to meet the need for more doctors in California as access to healthcare continues to grow. 2.Primary Care in California. California is home to the largest number of primary care physicians and nurse practitioner in the country. However, the state ranks 23rd in the number of primary care physicians per resident. An August 2014 report by the California HealthCare Foundation states that California has only 35 to 49 primary care physicians per 100,000 Medi-Cal enrollees. Federal guidelines call for the state to have 60 to 80 doctors per 100,000 patients. The supply of primary care physicians also varies substantially across California's counties. The number of primary care physicians actively practicing in California counties is, in too many cases, at the bottom range of, or below, the state's need. According to 2011 Health Resources and Services Administration (HRSA) data, 29 of California's 58 counties fall at the lower end, or below, the needed supply range for primary care physicians. SB 22 (Roth) Page 8 of ? In other words, half of Californians live in a community where they do not have adequate access to the health care services they need. 3.The Affordable Care Act (ACA). Under the ACA, about five million Californians have enrolled in either private insurance or Medi-Cal. There are now 12 million Medi-Cal enrollees, about one third of California's population. The newly insured will increase demand for health care from an already strained system. Furthermore, the ACA will change how care is delivered. It provides incentives for expanded and improved primary care, which may affect demand for some health care professionals more than others, and encourages the creation of team-based models of service delivery. Research indicates that health care reform will place higher skill demands on all members of the health care workforce as systems try to improve quality while limiting costs. The scale of change with health care reform is unlike anything that California has previously faced. Studies have found that persons with health insurance use more health care services than uninsured persons, particularly in primary care and preventive services. This was found in Massachusetts, which experienced a substantial increase in demand for primary care services as a result of its 2006 health reform. A February 2, 2015 article in the San Jose Mercury News reported that the primary care physician shortage combined with the millions of newly insured has resulted in significant delays in seeing a doctor and crowded emergency rooms. According to the Mercury News article, "? many experts say the problems are so widespread they shouldn't be ignored." 4.Current workforce development programs. The state currently operates a number of programs designed to increase the number of health care professionals practicing in medically underserved areas: a. Health Professions Education Foundation (HPEF) Established in 1987 and housed within OSHPD non-profit, HPEF is a non-profit Foundation statutorily created to provide financial incentives to aspiring and practicing health professionals. The Foundation offers six scholarships and seven loan repayment programs in several allied health professions, including nursing, mental health, dentistry, and medicine. Scholarship programs provide financial assistance to healthcare students who SB 22 (Roth) Page 9 of ? are attending a California accredited college or university and agree to practice in California's underserved communities upon graduation. Loan repayment programs are offered to working health professionals to assist in repayment of their education debt in exchange for a service obligation. Service obligations are typically one to three years, and vary depending on the program. Awards range from $4,000 to $105,000 dependent on profession and length of service obligation. HPEF has increased access to care in the state's underserved areas via 6,693 awards totaling more than $60 million to health practitioner awardees serving in 57 of the state's 58 counties. b. California State Loan Repayment Program (SLRP) Provides educational loan repayment assistance to primary health care professionals who provide health care services in federally designated Health Professional Shortage Areas (HPSAs). Eligible health professionals include physicians specializing in primary care fields, nurse practitioners, certified nurse-midwives, general practice dentists, registered dental hygienists, clinical or counseling psychologists, clinical social workers, licensed counselors, pharmacists, physician assistants, psychiatric nurse specialists, and marriage and family therapists. Eligible health professionals must be employed by or have accepted employment at a SLRP Certified Eligible Site (which includes rural health clinics, community health clinics, county facilities, and federally qualified health centers) and must commit to providing full-time or half-time primary care services in a HPSA for a minimum of two years. Health professionals may receive up to $50,000 in exchange for a two year full-time service obligation and/or $25,000 for a two year half-time service obligation; individuals can receive up to $150,000 over six years at full-time and $75,00 for half-time. SLRP award amounts are matched by the site(s) in which the health professional is practicing, on a dollar-for-dollar basis, in addition to salary. The SLRP is funded through a grant from the HRSA, Bureau of Clinician Recruitment and Service, National Health Service Corps (NHSC) and is administered by OSHPD. c. Song-Brown Program The Song-Brown Program was established in 1973 under Health and Safety Code Section SB 22 (Roth) Page 10 of ? 128200-128241 to increase the number of family physicians in the state and increase the number of family medicine residency programs. Currently, Song-Brown provides financial support to family medicine and primary care residency (Internal Medicine, OB/GYN and Pediatric) programs, family nurse practitioner programs, primary care physician assistant training programs, and registered nurse education programs. Funding is provided to institutions that provide clinical training and education in underserved areas, and healthcare to the state's underserved population. d. Mini Grants Program (Mini Grants) Provides grants to organizations supporting underrepresented and economically disadvantaged students in pursuit of careers in health care. Organizations receive grants of up to $15,000 to engage in health career conferences, workshops, and/or career exploration activities. Since 2005, over $2.2 million has been awarded to support organizations engaging in these activities serving nearly 56,000 students statewide. In 2014 to2015, via partial funding from Mental Health Services Act (MHSA) Workforce Education and Training, the California Endowment, and the California State Office of Rural Health, OSHPD awarded 46 Mini Grants to organizations for a sum of $603,706. This will help support 16,555 students from demographically underrepresented groups to pursue healthcare careers. e. California Student/Resident Experiences and Rotations in Community Health (CalSEARCH) Provides grants to organizations that support student and resident rotations from primary care and mental health disciplines in community clinics, health centers, and public mental health system sites which expose students, residents and practitioners to underserved communities. Organizations awarded receive funding to administer the program and to provide students, residents, and preceptors and mentors a small stipend for completing the program. In addition to completing a rotation in an underserved area, participants are also required to complete a community project. From 2009 to 2012, 150 students and residents were supported via an American Recovery and Reinvestment Act grant. In 2014 to2015, via funding from the MHSA Workforce Education and Training and The California Endowment, OSHPD granted 12 awards to organizations for a SB 22 (Roth) Page 11 of ? sum of $317,000 which will help support 92 participants statewide. f. MHSA Workforce Education and Training (WET) Program Funded by Proposition 63, this program remedies the shortage of mental health practitioners in the public mental health system (PMHS) via: career awareness; PMHS rotations; retention grants; stipends; loan repayments; grants to expand capacity of education and residency programs; grants to increase and retain consumer and family member employment; and grants to support regional partnerships. 5.Prior legislation. SB 1416 (Rubio and Hernandez) of 2012 would have created the Graduate Medical Education Trust Fund for the purpose of funding grants to graduate medical education residency programs in California, and would have required OSHPD to develop criteria for distribution of available moneys. SB 1416 was held in the Assembly Appropriations Committee SB 635 (Hernandez) would have required funds deposited in the Managed Care Administrative Fines and Penalties Fund in excess of $1 million be transferred each year to OSHPD for the purposes of the Song-Brown Program. SB 635 was held in the Assembly Appropriations Committee. AB 589 (Perea), Chapter 339, Statutes of 2012, establishes the Steven M. Thompson Medical School Scholarship Program and would provide that the program is open to persons who agree in writing, prior to entering an accredited medical or osteopathic school, to serve in an eligible practice setting, as defined, for at least three years. AB 2551 (Hernandez), of 2010, would have established the Health Workforce Development Fund, consisting of moneys received from federal and private sources, as specified; would have authorized the Fund to be used, upon appropriation by the Legislature, for prescribed purposes relating to health workforce development, and would have required the California Workforce Investment Board and OSHPD to report specified information to the Legislature annually, as specified. AB 2551 failed passage on the Senate Floor. AB 657 (Hernandez) of 2009 would have required OSHPD, in SB 22 (Roth) Page 12 of ? collaboration with the California Workforce Investment Board, to establish the Health Professions Workforce Task Force, composed of specified members, to assist in the development of a health professions workforce master plan for the state and would have prescribed the functions and duties of the task force in that regard. AB 657 was vetoed by the Governor, who stated, in part, that the bill was unnecessary and duplicative of efforts already underway. AB 2375 (Hernandez), of 2008, would have required OSHPD to establish the Health Professions Workforce Task Force, as specified, to assist in the development of a health professions workforce master plan. AB 2375 was held in the Senate Appropriations Committee on suspense. AB 2439 (De La Torre), Chapter 640, Statutes of 2008, requires the Medical Board of California (MBC) to assess an additional $25 fee for the initial license and license renewal of a physician or surgeon to support the STPCLRP. Requires up to 15 percent of the funds collected from the additional $25 fee to be dedicated to loan assistance for physicians who agree to practice in geriatric care settings, as specified. AB 327 (De La Torre), Chapter 293, Statutes of 2005, requires the MBC to assess an applicant a $50 fee for the issuance and renewal of a physician and surgeon's certificate. Specifies that payment of the fee is voluntary and directs the fees to the Medically Underserved Account for the STPCLRP. AB 920 (Aghazarian), Chapter 317, Statutes of 2005, provides for the transfer of the STPCLRP and the Physician Volunteer Program from the MBC to the California Physician Corps Program within the Foundation, effective July 1, 2006. AB 1403 (Nunez), Chapter 367, Statutes of 2004, renames the California Physician Corps Loan Repayment Program of 2002 as the STPCLRP. AB 982 (Firebaugh), Chapter 1131, Statutes of 2002, creates the California Physician Corps Loan Repayment Program of 2002. This program is administered by the Division of Licensing of MBC for the purpose of granting loan repayment awards to physicians and surgeons working in medically underserved SB 22 (Roth) Page 13 of ? communities. 6.Support. The Association of California Healthcare Districts writes that funding graduate medical residency programs will make it financially more feasible for students to afford higher quality education and training. In turn, this would increase the number of residents in the area who are able to provide higher quality healthcare services for those in need. The Community Clinic Association of Los Angeles County believes this is important legislation that supports the primary care workforce necessary to serve underserved communities. The AARP believes that significant legislation is needed to deal with shortages and unequal geographic distribution of health care professionals, most notably primary-care physicians and nurses. 7.Support in concept. The MBC supports the concept of increasing funding for residency programs and positions in California, as this would help promote MBC's mission of increasing access to care for consumer. However, this bill does not specify which public-private partnerships would be funding the California Medical Residency Training Fund. 8.Support if amended. The California Medical Association writes that it is not appropriate to suggest that the various appointing authorities consider an individual or organization's ability to fundraise as a factor in making appointments to the Foundation board and that it is not in the public interest to have corporations and other wealthy interests having "significant control over the geographic dispersion of funds," as stated by the author's office. 9.Author's amendments. The author request the Committee approve an amendment to add the following language to the bill: SECTION 7: Section 128596 is added to the Health and Safety Code to read: 128596. Notwithstanding any other law, the office may exempt from public disclosure any document in the possession of the office that pertains to a donation made pursuant to this chapter if the donor has requested anonymity. SECTION 8: Section 128597 is added to the Health and Safety Code to read: 128597. SB 22 (Roth) Page 14 of ? (a) This chapter shall become operative only upon certification by the Director of the Department of Finance that sufficient private funds have been made available from private sources to implement this chapter. (b) Upon this chapter becoming operative, the State General Fund shall annually deposit into the Fund an amount equal to the contribution received by the Fund from the Foundation in the preceding fiscal year, not to exceed 20 million dollars annually. SUPPORT AND OPPOSITION : Support: AARP Association of California Healthcare Districts California Academy of Physician Assistants California Physical Therapy Association California Primary Care Association Community Clinic Association of Los Angeles County Oppose: None received. -- END --