Amended in Senate April 14, 2016

Senate Bill No. 1471

Introduced by Senator Hernandez

February 19, 2016

begin delete An act to amend Section 1363.5 of the Health and Safety Code, and to amend Section 10123.135 of the Insurance Code, relating to health care coverage. end delete begin insert An act to amend Sections 1341.45, 128551, and 128552 of, and to add Section 128555.5 to, the Health and Safety Code, relating to health professions development. end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 1471, as amended, Hernandez. begin delete Health care coverage: services: authorization and denial. end delete begin insert Health professions development: loan repayment. end insert

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Existing law establishes the Steven M. Thompson Physician Corps Loan Repayment Program in the California Physician Corps Program within the Health Professions Education Foundation, which provides financial incentives, including repayment of educational loans, to a physician and surgeon who practices in a medically underserved area, as defined. Existing law establishes the Medically Underserved Account for Physicians, a continuously appropriated account, within the Health Professions Education Fund that is managed by the Health Professions Education Foundation and the Office of Statewide Health Planning and Development, to primarily provide funding for the ongoing operations of the Steven M. Thompson Physician Corps Loan Repayment Program.

end insert begin insert

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and imposes certain requirements on health care service plans. Existing law imposes various fines and administrative penalties on health care service plans for certain violations of the act, which are deposited into the Managed Care Administrative Fines and Penalties Fund. Existing law requires the first $1,000,000 in the fund to be transferred each year to the Medically Underserved Account for Physicians and to be used, upon appropriation by the Legislature, for purposes of the Steven M. Thompson Physician Corps Loan Repayment Program. Existing law requires all remaining funds to be transferred each year to the Major Risk Medical Insurance Fund and to be used, upon appropriation by the Legislature, for purposes of the Major Risk Medical Insurance Program.

end insert begin insert

This bill would expand the eligibility for loan repayment funds under the Steven M. Thompson Physician Corps Loan Repayment Program to include those physicians providing psychiatric services. The bill would provide that continuously appropriated funds deposited into the Medically Underserved Account for Physicians shall not be made available under the Steven M. Thompson Physician Corps Loan Repayment Program to fund the repayment of loans for those physicians providing psychiatric services or those physicians whose primary specialty is psychiatry, as specified.

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The bill would instead require, after the first $1,000,000 is transferred from the Managed Care Administrative Fines and Penalties Fund to the Medically Underserved Account for Physicians, $1,000,000 to be transferred each year to the Major Risk Medical Insurance Fund to be used, upon appropriation by the Legislature, for the Major Risk Medical Insurance Program. The bill would require any amount remaining over the amounts transferred to the Medically Underserved Account for Physicians and the Major Risk Medical Insurance Fund to be transferred each year to the Medically Underserved Account for Physicians to be used, upon appropriation by the Legislature, for the Steven M. Thompson Physician Corps Loan Repayment Program, and provide that one-half of these moneys are to be used to fund the repayment of loans for those physicians providing psychiatric services or those physicians whose primary specialty is psychiatry under the Steven M. Thompson Physician Corps Loan Repayment Program.

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The bill would also delete a reference to an obsolete program and make other technical, nonsubstantive changes.

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Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care, and makes a willful violation of its provisions a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law requires health care service plans and insurers to disclose or provide for the disclosure to specified entities persons and the process that the plan uses to authorize or deny health care services under the benefits provided by the plan, including coverage for subacute care, transitional inpatient care, or care provided in skilled nursing facilities.

end delete begin delete

This bill would expand the above requirement to include disclosure of the process the plan uses to authorize or deny behavioral health treatment. By changing the definition of an existing crime with respect to health care service plans, this bill would impose a state-mandated local program.

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The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

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This bill would provide that no reimbursement is required by this act for a specified reason.

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Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program:  begin delete yes end delete begin insert no end insert .

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

end insert

begin insert Section 1341.45 of the end insert begin insert Health and Safety Code end insert

begin insert is amended to read: end insert

1341.45.  

(a) There is hereby created in the State Treasury the
Managed Care Administrative Fines and Penalties Fund.

(b) The fines and administrative penalties collected pursuant to
this chapter, on and after September 30, 2008, shall be deposited
into the Managed Care Administrative Fines and Penalties Fund.

(c) The fines and administrative penalties deposited into the
Managed Care Administrative Fines and Penalties Fund shall be
transferred by the department, begin delete beginning September 1, 2009, and
annually thereafter, end delete begin insert annually, end insert as follows:

(1) The first one million dollars ($1,000,000) shall be transferred
to the Medically Underserved Account for Physicians within the
Health Professions Education Fund and shall, upon appropriation
by the Legislature, be used for the purposes of the Steven M.
Thompson Physician Corps Loan Repayment Program, as specified
in Article 5 (commencing with Section 128550) begin delete or end delete begin insert of end insert Chapter 5
of Part 3 of Division 107 and, notwithstanding Section 128555,
shall not be used to provide funding for the Physician Volunteer
Program.

(2)  begin delete Any end delete begin insert Until January 1, 2017, any end insert amount over the first one
million dollars ($1,000,000), including accrued interest, in the
fund shall be transferred to the Major Risk Medical Insurance Fund
continued pursuant to Section 15893 of the Welfare and Institutions
Code and shall, upon appropriation by the Legislature, be used for
the Major Risk Medical Insurance Program for the purposes
specified in Section 15894 of the Welfare and Institutions Code.

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(3) On and after January 1, 2017, and annually thereafter, the
second one million dollars ($1,000,000) shall be transferred to
the Major Risk Medical Insurance Fund continued pursuant to
Section 15893 of the Welfare and Institutions Code and shall, upon
appropriation by the Legislature, be used for the Major Risk
Medical Insurance Program for the purposes specified in Section
15894 of the Welfare and Institutions Code.

end insert begin insert

(4) (A) On and after January 1, 2017 any amount over the first
two million dollars ($2,000,000), including accrued interest, in
the fund shall be transferred to the Medically Underserved Account
for Physicians within the Health Professions Education Fund and
shall, upon appropriation by the Legislature, and subject to
subparagraph (B), be used for the purposes of the Steven M.
Thompson Physician Corps Loan Repayment Program, as specified
in Article 5 (commencing with Section 128550) of Chapter 5 of
Part 3 of Division 107 and, notwithstanding Section 128555, shall
not be used to provide funding for the Physician Volunteer
Program.

end insert begin insert

(B) One-half of the moneys deposited into the Medically
Underserved Account for Physicians within the Health Professions
Education Fund under this paragraph shall, upon appropriation
by the Legislature, be used to fund the repayment of loans for those
physicians providing psychiatric services or those physicians whose
primary specialty is psychiatry under the Steven M. Thompson
Physician Corps Loan Repayment Program, as specified in Article
5 (commencing with Section 128550) of Chapter 5 of Part 3 of
Division 107.

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(d) Notwithstanding subdivision (b) of Section 1356 and Section
1356.1, the fines and administrative penalties authorized pursuant
to this chapter shall not be used to reduce the assessments imposed
on health care service plans pursuant to Section 1356.

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(e) The amendments made to this section by the act adding this
subdivision shall become operative on July 1, 2014.

end delete begin delete end delete

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 128551 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

128551.  

(a) It is the intent of this article that the Health
Professions Education Foundation and the office provide the
ongoing program management of the two programs identified in
subdivision (b) of Section 128550 as a part of the California
Physician Corps Program.

(b)  For purposes of subdivision (a), the foundation shall consult
with the Medical Board of California, Office of Statewide begin insert Health end insert
Planning and Development, and shall establish and consult with
an advisory committee of not more than seven members, that shall
include two members recommended by the California Medical
Association and may include other members of the medical
community, including ethnic representatives, medical schools,
health advocates representing ethnic communities, primary care
clinics, public hospitals, and health systems, statewide agencies
administering state and federally funded programs targeting
underserved communities, and members of the public with
expertise in health care issues.

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begin insert SEC. 3. end insert   

end insert

begin insert Section 128552 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

128552.  

For purposes of this article, the following definitions
shall apply:

(a) “Account” means the Medically Underserved Account for
Physicians established within the Health Professions Education
Fund pursuant to this article.

(b) “Foundation” means the Health Professions Education
Foundation.

(c) “Fund” means the Health Professions Education Fund.

(d) “Medi-Cal threshold languages” means primary languages
spoken by limited-English-proficient (LEP) population groups
meeting a numeric threshold of 3,000, eligible LEP Medi-Cal
beneficiaries residing in a county, 1,000 Medi-Cal eligible LEP
beneficiaries residing in a single ZIP Code, or 1,500 LEP Medi-Cal
beneficiaries residing in two contiguous ZIP Codes.

(e) “Medically underserved area” means an area defined as a
health professional shortage area in Part 5 begin insert (commencing with
Section 5.1) end insert of Subchapter A of Chapter 1 of Title 42 of the Code
of Federal Regulations or an area of the state where unmet priority
needs for physicians exist as determined by the California
Healthcare Workforce Policy Commission pursuant to Section
128225.

(f) “Medically underserved population” means the Medi-Cal
begin delete program, Healthy Families Program, end delete begin insert program end insert and uninsured
populations.

(g) “Office” means the Office of Statewide Health Planning and
Development (OSHPD).

(h) “Physician Volunteer Program” means the Physician
Volunteer Registry Program established by the Medical Board of
California.

(i) “Practice setting,” for the purposes of this article only, means
either of the following:

(1) A community clinic as defined in subdivision (a) of Section
1204 and subdivision (c) of Section 1206, a clinic owned or
operated by a public hospital and health system, or a clinic owned
and operated by a hospital that maintains the primary contract with
a county government to fulfill the county’s role pursuant to Section
17000 of the Welfare and Institutions Code, which is located in a
medically underserved area and at least 50 percent of whose
patients are from a medically underserved population.

(2) A physician owned and operated medical practice setting
that provides primary care begin insert or psychiatric services end insert located in a
medically underserved area and has a minimum of 50 percent of
patients who are uninsured, Medi-Cal beneficiaries, or beneficiaries
of another publicly funded program that serves patients who earn
less than 250 percent of the federal poverty level.

(j) “Primary specialty” means family practice, internal medicine,
pediatrics, begin insert psychiatry, end insert or obstetrics/gynecology.

(k) “Program” means the Steven M. Thompson Physician Corps
Loan Repayment Program.

(l) “Selection committee” means a minimum three-member
committee of the board, that includes a member that was appointed
by the Medical Board of California.

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begin insert SEC. 4. end insert   

end insert

begin insert Section 128555.5 is added to the end insert begin insert Health and Safety
Code end insert begin insert , to read: end insert

begin insert

begin insert 128555.5. end insert   

Notwithstanding subdivision (e) of Section 128555,
funds deposited into the Medically Underserved Account for
Physicians shall not be made available to fund the repayment of
loans under the Steven M. Thompson Physician Corps Loan
Repayment Program for those physicians providing psychiatric
services or those physicians whose primary specialty is psychiatry,
except as provided in subparagraph (B) of paragraph (4) of
subdivision (c) of Section 1341.45.

end insert

All matter omitted in this version of the bill appears in the bill as introduced in the Senate, February 19, 2016. (JR11)