BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 1416|
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THIRD READING
Bill No: SB 1416
Author: Rubio (D) and Hernandez (D)
Amended: 5/29/12
Vote: 21
SENATE HEALTH COMMITTEE : 7-0, 4/25/12
AYES: Hernandez, Alquist, Anderson, De Le�n, DeSaulnier,
Rubio, Wolk
NO VOTE RECORDED: Harman, Blakeslee
SENATE APPROPRIATIONS COMMITTEE : 7-0, 5/24/12
AYES: Kehoe, Walters, Alquist, Dutton, Lieu, Price,
Steinberg
SUBJECT : Medical residency training program grants:
grants
SOURCE : Author
DIGEST : This bill creates the Graduate Medical Education
(GME) Trust Fund and requires moneys in the fund to be used
by the Office of Statewide Health Planning and Development
(OSHPD) to fund grants to medical residency training
programs for the creation of additional residency
positions.
ANALYSIS : Existing law:
1.Establishes the California Healthcare Workforce Policy
Commission (Commission) and requires the Commission to,
CONTINUED
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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
(Foundation) within OSHPD. Requires the Foundation 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 the Foundation is
governed by a board consisting of 13 members appointed by
the Governor, Speaker of the Assembly, and Senate Rules
Committee.
3.Establishes, under the Foundation, 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 the Foundation, 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 the Foundation, 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 the
Foundation to appoint a selection committee to provide
policy direction and guidance to the STPCLRP. Requires
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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 (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.Creates the GME Trust Fund and requires moneys in the
fund to be used by OSHPD to fund grants to medical
residency training programs for the creation of
additional residency positions. Requires additional
residency positions funded pursuant to this bill to be
funded at the same rate as residency positions funded
through the Medicare Program.
2.Requires the GME Trust Fund to consist of all private
moneys donated by private individuals or entities to the
Commission for deposit into the fund, and no General Fund
moneys shall be used. Requires all interest earned on
the moneys in the fund to be retained in the fund and
used for purposes consistent with the fund.
Background
GME funding . According to the Western Journal of Medicine,
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Medicare is the largest source of federal funding for
medical education. Beginning in 1985, Medicare replaced its
cost-based funding formula with two types of payments:
direct medical education (DME) payments and indirect
medical education (IME) adjustments. DME payments are
intended to defray the costs associated with program
administration and salaries for residents and teaching
personnel. IME adjustments are intended to cover the costs
associated with the unnecessary procedures that residents
order and other inefficiencies of residents. In 2009,
Medicare spent $9.5 billion on GME, $3 billion of which was
on DME payments and the remaining $6.5 billion was directed
towards IME adjustments. Other sources of federal funding
for medical education include Medicaid, the Department of
Veterans Affairs (VA), the Department of Defense, and the
Bureau of Health Professions. Most states (48 of 50 states)
fund GME through their Medicaid programs and receive
federal matching funds for this purpose.
Several states and the VA are using innovative GME
financing approaches to take into account state or national
physician workforce needs in their decisions on how many
GME programs to support and in which specialties. Utah has
created a system to link Medicare and Medicaid payments to
meet the state's physician workforce needs; Texas lawmakers
have authorized state-formula funding to expand GME;
Minnesota is pooling multiple payment sources to offset the
costs of clinical training and to ensure health care
research; and the VA is increasing its support of the GME
enterprise with a multi-year, 2,000-position expansion of
resident positions in specialties of greatest need to US
veterans.
Workforce shortages . In March 2012, the Senate Health
Committee held two initial hearings in a series on
California's health care workforce. The background paper,
prepared by the Senate Office of Research (SOR), stated
that statewide shortages of health care providers currently
exist in several major health professions. Additionally,
health care workforce needs are projected to increase
dramatically due to the aging of the general population as
well as health care providers, population growth, expanding
diversity and implementation of the Affordable Care Act.
Recent health care workforce research indicates that health
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professional shortage, distribution, and diversity issues
impact access to primary, allied, mental, and dental health
care in California today. The demand for these health care
professions is also forecasted to grow faster than
professions in other industries. According to the SOR
paper, the scale and scope of the problem is not well
understood because data on the supply and demand of health
professionals is incomplete and is not systematically or
regularly updated.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
One-time costs up to $150,000 to develop criteria for
making grants (Private Funds). The development of grant
making criteria is subject to the Administrative
Procedures Act (beginning at Section 11340 of the
Government Code), which typically requires substantial
staff time.
Unknown costs to make grants to medical residency
programs (Private Funds).
SUPPORT : (Verified 5/29/12)
California Medical Association
California Academy of Family Physicians
ARGUMENTS IN SUPPORT : The California Medical Association
(CMA) writes that for far too long, federal funding for
California's GME has remained stagnant and as a result, the
state has inadequately supplied the physician workforce.
CMA states that the most effective way to address this
deficit is by expanding and strengthening the capacity of
California's medical resident programs, and this bill lays
the groundwork to achieve this goal.
CTW:nl 5/29/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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