BILL ANALYSIS �
SB 635
Page 1
Date of Hearing: June 12, 2012
ASSEMBLY COMMITTEE ON HEALTH
William W. Monning, Chair
SB 635 (Ed Hernandez) - As Amended: May 31, 2011
SENATE VOTE : 39-0
SUBJECT : Health care: workforce training.
SUMMARY : Requires funds deposited into the Managed Care
Administrative Fines and Penalties Fund (Managed Care Fund) in
excess of $1 million to be transferred each year to the Office
of Statewide Health Planning and Development (OSHPD) for the
purpose of the Song-Brown Health Care Workforce Training Act of
1973 (Song-Brown), as specified. Specifically, this bill :
1)Provides that transfers of funds from the Managed Care Fund to
the Major Risk Medical Insurance Fund (MRMIF) for the Major
Risk Medical Insurance Program (MRMIP) shall cease on the date
that MRMIP becomes inoperative. Requires the Department of
Finance to notify the Joint Legislative Budget Committee at
the time that MRMIP becomes inoperative.
2)Indicates that commencing with the date that the transfers of
funds under 1) above cease, any amount over the $1 million,
including accrued interest, in the Managed Care Fund shall be
transferred to OSHPD for deposit in the Song-Brown Program
Account, and shall upon appropriation by the Legislature, be
used for the purposes specified in Song-Brown.
EXISTING LAW :
1)Establishes MRMIP, administered by the Managed Risk Medical
Insurance Board (MRMIB), to provide state subsidized health
insurance for individuals who, because of health history or
health status have been denied health coverage by at least one
private health plan, or are offered only limited coverage or
coverage significantly above standard average individual
rates, as determined by MRMIB. Creates MRMIF for purposes of
MRMIP.
2)Establishes the Department of Managed Health Care (DMHC) to
regulate health plans under the Knox-Keene Health Care Service
Plan Act of 1975 (Knox-Keene). Authorizes the Director of
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DMHC to take various enforcement actions for violations of
Knox-Keene, including the imposition of fines and penalties.
3)Requires fines and penalties collected by DMHC in the
implementation of Knox-Keene to be deposited in the Managed
Care Fund.
4)Requires the fines and administrative penalties deposited into
the Managed Care Fund to be transferred to the DMHC beginning
September 1, 2009, and annually thereafter, as follows:
a) The first $1 million to be transferred to the Medically
Underserved Account for Physicians within the Health
Professions Education Fund for purposes of the Steven M.
Thompson Physician Corps Loan Repayment Program (Physician
Loan Repayment Program), as specified.
b) Any amount over the first $1 million, including accrued
interest, in the Managed Care Fund shall be transferred to
MRMIF to be used for MRMIP, as specified.
5)Establishes by January 1, 2014, under the federal Patient
Protection and Affordable Care Act (ACA), health benefit
insurance exchanges in each state for individuals and small
businesses to purchase health insurance products. Grants
authority to states to operate an exchange and prohibits
insurers participating in the exchange from discriminating
based on pre-existing conditions, health status, and gender.
6)Establishes, under the ACA, the Pre-existing Condition
Insurance Program, a federally subsidized temporary high risk
health insurance pool program to provide coverage to currently
uninsured individuals with pre-existing conditions and
provides an option for states to administer the program.
7)Establishes Song-Brown to increase the number of students and
residents receiving quality education and training in the
specialty of family practice and as primary care physician's
assistants, primary care nurse practitioners, and registered
nurses and to maximize the delivery of primary care family
physician services to specific areas of California where there
is a recognized unmet priority need. Provides that Song-Brown
is to be implemented through contracts with accredited medical
schools, and other programs that train the above
practitioners.
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8)Establishes the Physician Loan Repayment Program in the
California Physician Corps Program to provide financial
incentives, as specified, to physicians and surgeons for
practicing in a medically underserved community.
9)Establishes the Health Professions Education Foundation (HPEF)
within OSHPD, among other functions, to develop criteria for
evaluating applicants for various scholarships or loans and to
implement the Physician Loan Repayment Program and the
Volunteer Physician Program, as specified.
FISCAL EFFECT : According to the Senate Appropriations
Committee:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
Redirection of General $2,000 - $3000 annually,
commencing General
Fund revenue January 1, 2014, and ongoing
MRMIP cost pressure $2,000 - $3,000 annually, commencing
General
January 1, 2014, and ongoing
Increase in Song-Brown $2,000 - $3,000 annually,
commencing Special*
Program funds January 1, 2014, and ongoing
*Fund into which the monies would be deposited is unspecified.
COMMENTS :
1)PURPOSE OF THIS BILL . The author is the sponsor of this bill.
According to the author, this bill is necessary because the
state has a dramatic shortage of health care professionals.
Adding to the urgency and depth of the problem is the 2014
date of full implementation of the ACA, which will put an
estimated 4.7 million Californians into the health care
system. The shortage of health care workers is a widely
recognized problem not only in California, but nationwide.
However, the author believes that the discussion of this
problem often focuses solely on the shortage of primary care
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physicians without addressing the related problem of the
shortages of other health professionals, especially those who
are able to assist in providing primary care. This bill will
help the state address the shortage of primary care providers
in underserved areas by supplementing funding for Song-Brown,
which funds family practice residency programs, physician
assistant, nurse practitioner, and registered nurse education
programs. The author points out that due to the passage of
the ACA, MRMIP will no longer be needed as of January 1, 2014,
and this bill will take effect on that date.
2)BACKGROUND .
a) Beneficiaries of the Managed Care Fund . Existing law
establishes the Managed Care Fund for the purpose of
depositing fines and penalties collected by DMHC from
health plans for any violation of Knox-Keene. The first $1
million in the Managed Care Fund is transferred each year
to the Medically Underserved Account for Physicians for
purposes of the Physician Loan Repayment Program, and the
remainder of the funds are transferred to the MRMIF for
MRMIP.
The Physician Loan Repayment Program that was originally
within the Medical Board of California (MBC) but was
eventually transferred to OSHPD, is one of the programs
administered by the HPEF. The Physician Loan Repayment
Program was established to encourage physicians to practice
in medically underserved areas (MUAs) of California by
authorizing a plan for repayment of their educational
loans. Licensed physician graduates who are practicing
direct patient care within the state may apply for a grant.
An awardee may receive up to $105,000 to repay educational
debt if he or she commits to a three-year service
obligation practicing in direct patient care in a MUA in
California. According to the U.S. Health Resources and
Services Administration (HRSA), MUAs and medically
underserved populations have shortages of primary medical
care, dental or mental health providers and may be
designated based on geographic (a county or service area),
or demographic (low income, Medicaid-eligible populations,
cultural and/or linguistic access barriers to primary
medical care services) criteria.
Since 1991, MRMIB has operated MRMIP which is a state program
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that offers health insurance to Californians who are unable
to obtain coverage in the individual insurance market.
Services are delivered through licensed health insurance
plans. Most of MRMIP's funding comes from the Proposition
99 Cigarette and Tobacco Products Surtax Funds. Transfers
from the Managed Care Fund for MRMIP are as follows:
2009-10: $2,082,000; 2010-11: $3,678,000; and, 2011-12:
$2,416,000 (estimated). The Governor's 2012-13 Budget
includes a proposal to transfer MRMIP to the Department of
Health Care Services by July 2013. If this bill is enacted
on the date that MRMIP becomes inoperative, all funds from
the Managed Care Fund for MRMIP will be re-directed to
OSHPD for Song-Brown.
b) Song-Brown . Song-Brown, administered by OSHPD, was
established in 1973 to increase the number of health
professional training slots in established medical schools.
According to OSHPD, support is provided to institutions
(not individual students) that provide clinical training
for family medicine residents, family nurse practitioners
(FNP), physician assistants (PA) and registered nurses
(RN). Song-Brown funds are used to train and educate
residents and students by providing clinical training in
underserved areas (Health Professional Shortage Areas,
MUAs, Medically Underserved Populations, Primary Care
Shortage Areas, and Registered Nurse Shortage Areas), who
provide health care to the state's underserved population.
This provides residents and students with experience and
exposure, increases access to health care, and provides
health care to the underserved. OSHPD indicates that
Song-Brown awards over $7.1 Million annually to
institutions and currently funds the following: i) thirty
out of 38 family practice residency training programs; ii)
seven out of 22 FNP programs; iii) five out of 10 PA
programs; iv) one combined FNP/PA program; and, v)
thirty-two out of 132 RN education programs in the State
which includes Associates, Baccalaureate, and Masters level
programs. The outcomes for 2010-11 are as follows: 58% of
family practice graduates practice in areas of unmet need;
62% of FNP & PA graduates practice in areas of unmet need;
58% of registered nurse graduates practice in areas of
unmet need; and, 745,186 patient encounters were provided
by Song-Brown funded family practice residents, FNPs, and
PAs.
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c)Healthcare Workforce Shortage . On March 23, 2010, President
Obama signed the ACA (Public Law (PL) 111-148), as amended by
the Health Care and Education Reconciliation Act of 2010 (PL
111-152). Among other provisions, the new law requires most
U.S. citizens and legal residents to have health insurance;
creates state-based American Health Benefit Exchanges through
which individuals can purchase coverage, with premium and cost
sharing credits, as specified, and creates separate exchanges
through which small businesses can purchase coverage.
According to experts, implementation of the ACA will create
more pressures for an adequate healthcare workforce in
California. A 2011 study by the Center for the Health
Professions of the University of California, San Francisco
entitled "California's Health Care Workforce: Readiness for
the ACA Era" indicates that with California's implementation
of the ACA, four to six million more Californians will obtain
coverage. As such, there is a need not only for a sufficient
number of providers but also providers who can meet the needs
of a diverse and changing public. Specifically, the study
points out that primary care will be the area most immediately
affected because preventive care and chronic disease
management become increasingly important.
In March 2012, the Senate Health Committee conducted two
informational hearings relating to healthcare workforce and
the ACA. The hearings explored the supply, and expected
demand for various healing arts practitioners as part of ACA
implementation. Additionally, several options were discussed
to address workforce needs.
3)SUPPORT . The California Academy of Family Physicians states
that this bill will improve the primary care workforce in
California and address the shortage of primary care
physicians. The City of Hope indicates that healthcare
facilities already face a workforce shortage, especially in
specialized care, and this bill ensures that patients receive
the best care possible.
4)OPPOSE UNLESS AMENDED . The California Nurses Association
(CNA) has an oppose unless amended position and requests that
this bill prohibit funds that are redirected to Song-Brown
from being awarded to private programs. CNA believes that
funds collected by the State should be awarded solely to
public programs.
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5)RELATED LEGISLATION . AB 589 (Perea) establishes the Steven M.
Thompson Medical School Scholarship Program to promote the
education of medical doctors and doctors of osteopathy, as
specified. AB 589 is pending in the Senate Appropriations
Committee.
6)PREVIOUS LEGISLATION .
a) AB 2551 (Hernandez) of 2010, would have established the
Health Workforce Development Fund, consisting of moneys
received from federal and private sources, as specified,
and would have authorized the Fund to be used, upon
appropriation by the Legislature, for prescribed purposes
relating to health workforce development, and required the
California Workforce Investment Board (CWIB) and OSHPD to
report specified information to the Legislature annually as
specified. AB 2551 failed passage on the Senate floor.
b) AB 657 (Hernandez) of 2009, would have required OSHPD,
in collaboration with the CWIB, 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
prescribe the functions and duties of the task force in
that regard. AB 657 was vetoed by the Governor, who stated
in his veto message that AB 657 was unnecessary and
duplicative of efforts already underway.
c) 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.
d) AB 2439 (De La Torre), Chapter 640, Statutes of 2008,
requires the MBC to assess an additional $25 fee for the
initial license and license renewal of a physician or
surgeon to support the Physician Loan Repayment Program.
Requires up to 15% 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.
e) AB 2543 (Berg) of 2008 would have established the
California Geriatric and Gerontology Student Loan
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Assistance Program of 2008, which would have been
administered by OSHPD for purposes of providing loan
assistance to students who intend to become employed as
licensed health care professionals or social workers in a
geriatric care setting, as specified. AB 2549 was vetoed
by Governor Arnold Schwarzenegger, and in his veto message
he stated, "the provisions of this bill place an additional
licensing fee on an entire profession to provide
specialized loan assistance grants beyond the $10 surcharge
they already pay for the Mental Health Service Provider
Education Program. Unfortunately, this bill is
double-assessing the same profession for similar programs."
f) 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 collected to the Medically
Underserved Account for the Physician Loan Repayment
Program.
g) AB 920 (Aghazarian), Chapter 317, Statutes of 2005,
provides for the transfer of the Physician Loan Repayment
Program, and the Physician Volunteer Program from the MBC
to the California Physician Corps Program within HPEF,
effective July 1, 2006.
h) AB 1403 (Nu�ez), Chapter 367, Statutes of 2002, renames
the California Physician Corps Loan Repayment Program of
2002 as the Physician Loan Repayment Program.
i) AB 982 (Firebaugh), Chapter 1131, Statutes of 2002,
creates the California Physician Corps Loan Repayment
Program of 2002, to be administered by the Division of
Licensing of MBC for the purpose of granting loan repayment
awards to physicians and surgeons working in medically
underserved communities.
REGISTERED SUPPORT / OPPOSITION :
Support
Association of California Healthcare Districts
California Academy of Family Physicians
California Academy of Physician Assistants
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California Association for Nurse Practitioners
California Hospital Association
California Primary Care Association
City of Hope
Community Clinic Association of Los Angeles County
Community Clinic Consortium
Opposition
None on file.
Analysis Prepared by : Rosielyn Pulmano / HEALTH / (916)
319-2097