BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          SB 22 (Roth) - Residency training.
          
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          |Version: May 5, 2015            |Policy Vote: HEALTH 9 - 0       |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: May 28, 2015      |Consultant: Brendan McCarthy    |
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          SUSPENSE FILE. AS AMENDED.



          


          Bill  
          Summary:  SB 22 would require the Office of Statewide Health  
          Planning and Development to establish a non-profit corporation  
          for the purpose of funding new medical residency programs in  
          medically underserved areas.


          Fiscal Impact (as approved on May 28,  
          2015):  
           One-time administrative costs of about $1 million to create  
            the foundation and develop criteria for making grants (General  
            Fund). In the long-run, donations may support some or all of  
            the activities of the proposed program. In the near term,  
            however, state funds will likely be needed to create the  
            program. 

           Ongoing costs of about $800,000 per year to administer the  







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            program, support the Foundation, and review and approve grants  
            and contracts (private funds).

           Unknown costs to make grants to medical residency programs  
            (private funds). The bill would require the Foundation to  
            solicit donations from public and private sources in order to  
            fund new medical residency positions. The amount of funding  
            available under the program will depend on the success of  
            those fundraising efforts. 


          Background:  The Office of Statewide Health Planning and Development  
          operates several programs to support workforce training for the  
          health care sector. Current programs provide loans,  
          scholarships, and loan repayments to students in health  
          professions and provide funding to support medical training  
          programs. For example, the Song-Brown Program provides funding  
          to family practice residency programs, physician assistant/nurse  
          practitioner training programs, and registered nurse training  
          programs, with a focus on medically underserved areas.

          Generally, medical residency programs are paid for by federal  
          Medicare program to subsidize (since hospitals would otherwise  
          be financially unable to pay for the costs to train resident  
          physicians).


          Proposed Law:  
            SB 22 would require the Office of Statewide Health Planning  
          and Development to establish a non-profit corporation for the  
          purpose of funding new medical residency programs in medically  
          underserved areas.
          Specific provision of the bill would:
           Require the Office of Statewide Health Planning and  
            Development to establish the California Medical Residency  
            Training Foundation, as a non-profit, public benefit  
            corporation;
           Specify the membership of the Foundation board of trustees;
           Require the Foundation to solicit and accept funds from  
            various sources in order to provide funding for new medical  
            residency programs and take related actions;
           Require the Office to provide administrative support to the  
            Foundation;
           Create a new special fund to support the program and  








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            continuously appropriate money in the fund;
           Authorize the Office to adopt emergency regulations to  
            implement the bill and exempt those emergency regulations from  
            the existing requirement that emergency regulations  
            subsequently be adopted as regular regulations;
           Require the Legislature to appropriate funds in the annual  
            budget act to match the private donations collected by the  
            foundation, to be used for the purposes of the bill.


          Related  
          Legislation:  
           SB 1416 (Rubio and Hernandez, 2012) would have created a fund  
            to be used to by the Office of Statewide Health Planning and  
            Development to make grants to medical residency training  
            programs. That bill was held in the Assembly Appropriations  
            Committee.
           SB 635 (Hernandez, 2012) would have required funds in excess  
            of $1 million from fines and penalties deposited in the  
            Managed Care Administrative Fines and Penalties Fund to be  
            transferred each year to the Office for support of the  
            Song-Brown Program. That bill was held in the Assembly  
            Appropriations Committee.


          Staff  
          Comments:  While the bill allows for the use of private funds to support  
          the program, there will be upfront costs to develop program  
          criteria. In the absence of private funds, those costs will fall  
          on the state. In addition, there will be ongoing administrative  
          costs to the Office (for example, administering grants  
          previously awarded by the Foundation). If private funds do not  
          materialize, those costs would fall on the state.

          Author's amendments (as adopted May 28, 2015): make a variety of  
          technical and clarifying changes.

          Committee amendments (as adopted May 28, 2015): delete the  
          requirement for legislative appropriation of funds to match  
          private donations.


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