Existing law provides that in administering the National Health Service Corps State Loan Repayment Program in accordance with federal law and regulations, the Office of Statewide Health Planning and Development is required to strive, whenever feasible, to equitably distribute loan repayment awards between eligible urban and rural program sites, after taking into account the availability of health care services in the communities to be served and the number of individuals to be served in each program site.

This bill would require the office to include all federally qualified health centers located in California in the programs certified eligible site list. As part of the application process for the program, the bill would require program sites to agree to provide matching funds.

Existing law provides that in administering the National Health Service Corps State Loan Repayment Program in accordance with federal law and regulations, the Office of Statewide Health Planning and Development is required to strive, whenever feasible, to equitably distribute loan repayment awards between eligible urban and rural program sites, after taking into account the availability of health care services in the communities to be served and the number of individuals to be served in each program site.

This bill would require the office to include all federally qualified health centers located in California in the programs certified eligible site list. As part of the application process for the program, the bill would require program sites to agree to provide matching funds.

Existing law provides that in administering the National Health Service Corps State Loan Repayment Program in accordance with federal law and regulations, the Office of Statewide Health Planning and Development is required to strive, whenever feasible, to equitably distribute loan repayment awards between eligible urban and rural program sites, after taking into account the availability of health care services in the communities to be served and the number of individuals to be served in each program site.

This bill would require the office to include all federally qualified health centers located in California in the programs certified eligible site list. The bill would require the office to notify all certified eligible sites when the program opens each application cycle and to strive, to the extent possible, to maximize the number of applications received each cycle. The bill would require the office to submit an annual report, as specified, to the Senate and Assembly Committees on Health that includes, among other things, the number of applications received during the annual application cycle and the percentage of applicants that were awarded funding. As part of the application process for the program, the bill would require program sites to agree to provide matching funds.

Existing law provides that in administering the National Health Service Corps State Loan Repayment Program in accordance with federal law and regulations, the Office of Statewide Health Planning and Development is required to strive, whenever feasible, to equitably distribute loan repayment awards between eligible urban and rural program sites, after taking into account the availability of health care services in the communities to be served and the number of individuals to be served in each program site.

This bill would require the office to include all federally qualified health centers located in California in the programs certified eligible site list. The bill would require the office to notify all certified eligible sites when the program opens each application cycle and to strive, to the extent possible, to maximize the number of applications received each cycle. The bill would require the office to submit an annual report, as specified, to the Senate and Assembly Committees on Health that includes, among other things, the number of applications received during the annual application cycle and the percentage of applicants that were awarded funding.

This bill would continuously appropriate $1,000,000 from the General Fund each fiscal year to authorize the Office of Statewide Health Planning and Development to use state funds for the purpose of providing state required matching funds to for the National Health Service Corps State Loan Repayment Program. Program in any year in which funding is appropriated by the annual Budget Act for that purpose. The bill would prohibit the office from requiring program applicants or participants to provide matching funds in any year that the office receives these matching funds, but would require a program applicant to agree to provide matching funds in any year in which the office does not receive state the required matching funds, as specified.

Existing law provides that in administering the National Health Service Corps State Loan Repayment Program in accordance with federal law and regulations, the Office of Statewide Health Planning and Development is required to strive, whenever feasible, to equitably distribute loan repayment awards between eligible urban and rural program sites, after taking into account the availability of health care services in the communities to be served and the number of individuals to be served in each program site.

This bill would require the office to include all federally qualified health centers located in California in the programs certified eligible site list. The bill would require the office to notify all certified eligible sites when the program opens each application cycle and to strive, to the extent possible, to maximize the number of applications received each cycle. The bill would require the office to submit an annual report, as specified, to the Senate and Assembly Committees on Health that includes, among other things, the number of applications received during the annual application cycle and the percentage of applicants who that were awarded funding.

This bill would continuously appropriate $1,000,000 from the General Fund each fiscal year to the Office of Statewide Health Planning and Development for the purpose of providing state matching funds to the National Health Service Corps State Loan Repayment Program. The bill would prohibit the office from requiring program applicants or participants to provide matching funds in years any year that the office receives these matching funds. funds, but would require a program applicant to agree to provide matching funds in any year in which the office does not receive state matching funds, as specified.

Existing law provides that in administering the National Health Service Corps State Loan Repayment Program in accordance with federal law and regulations, the Office of Statewide Health Planning and Development is required to strive, whenever feasible, to equitably distribute loan repayment awards between eligible urban and rural program sites, after taking into account the availability of health care services in the communities to be served and the number of individuals to be served in each program site.

This bill would make technical, nonsubstantive changes to that provision. require the office to include all federally qualified health centers located in California in the programs certified eligible site list. The bill would require the office to notify all certified eligible sites when the program opens each application cycle and to strive, to the extent possible, to maximize the number of applications received each cycle. The bill would require the office to submit an annual report, as specified, to the Senate and Assembly Committees on Health that includes, among other things, the number of applications received during the annual application cycle and the percentage of applicants who were awarded funding.

Existing law provides that in administering the National Health Service Corps State Loan Repayment Program in accordance with federal law and regulations, the Office of Statewide Health Planning and Development is required to strive, whenever feasible, to equitably distribute loan repayment awards between eligible urban and rural program sites, after taking into account the availability of health care services in the communities to be served and the number of individuals to be served in each program site.

This bill would make technical, nonsubstantive changes to that provision.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 2048

Author:(Gray)

As Amended Ver:August 15, 2016

Majority vote

Original Committee Reference: HEALTH

SUMMARY: Requires the Office of Statewide Health Planning and Development (OSHPD), in its administration of the National Health Service Corps State Loan Repayment Program (SLRP), to include all federally qualified health centers (FQHCs) located in California on the program's certified eligible site list.

The Senate amendments delete OSHPDs authority to provide state matching funds for the program.

EXISTING LAW requires OSHPD, in its administration of the SLRP to strive, whenever feasible, to equitably distribute loan repayment awards between eligible urban and rural program sites, after taking into account the availability of health care services in the communities to be served and the number of individuals to be served in each program site.

FISCAL EFFECT: According the Senate Appropriations Committee, no significant fiscal impact is anticipated by automatically making all federally qualified health centers eligible to participate. Automatically putting all federal qualified health centers on the eligible list does not guarantee any funding from the state; it only makes them automatically eligible to participate, providing they meet other program requirements.

COMMENTS: According to the author, FQHCs are safety net providers that serve some of the nation's most vulnerable populations. The author states they are required to offer services to all persons regardless of their ability to pay, be a nonprofit or public organization, serve a medically underserved area, and provide comprehensive primary care services. The author contends that FQHCs reduce health disparities by serving populations that would otherwise not have access to services, and care received at these centers is ranked among the most cost-effective, producing $24 billion in annual health system savings, yet studies have found that the quality of care provided is equal to or even greater that the quality of care provided elsewhere.

The author notes the SLRP was created in 1987 to increase and retain the number of primary care physicians, dentists, nurse practitioners, pharmacists, and mental and behavioral specialists in Health Professional Shortage Areas (HPSAs), and while the SLRP is an important program to recruit healthcare professionals to communities in need, FQHCs face burdensome obstacles to participation. The author states that, despite their federal designation, each FQHC is required to submit an application to be placed on the list of Certified Eligible Sites (CES) before applicants from their facility may be considered for loan repayment. Additionally, FQHCs must renew their application every three years to continue participation in the SLRP. The author contends that, as a result of these requirements, less than one-third of the health centers in the state are currently listed on the CES. The author also notes that federal SLRP dollars require a state match, and, while other states provide this match themselves, California has shifted that cost onto the health centers. The author points out that California receives only $1 million in federal funding annually, and many small and medium size health centers that cannot afford to provide matching funds are precluded from SLRP participation.

The author concludes that this bill will streamline participation in the SLRP by eliminating CES application and renewal requirements for FQHCs, creating notification and reporting requirements to keep health centers and the Legislature informed about the program, and lifting the financial burden of providing matching funds off the shoulders of the health centers.

As noted by the author, FQHCs serve a significant portion of the uninsured and underinsured in California. They are open-door providers that treat patients on a sliding scale fee structure and make their services available regardless of a patient's ability to pay. There are approximately 600 FQHCs in California. All FQHCs are either non-profit community clinics or government entities Community clinics and health centers provide health care to 14% of Californians. This figure is even higher in rural or remote areas that struggle to attract and retain health care providers.

SLRP was congressionally authorized in 1987 under the United States (U.S.) Public Health Services Act. SLRP increases the number of primary care physicians, dentists, dental hygienists, physician assistants, nurse practitioners, certified nurse midwives, pharmacists and mental/behavioral health providers practicing in federally designated California HPSAs. SLRP authorizes repayment of qualified educational loans for eligible primary health care professionals, who must commit to an initial two year full-time or four year half-time service agreement to provide direct patient care in a primary, dental, or mental health HPSA.

In order for a site to be eligible to host SLRP providers, it must:

1. Be located in a federally designated HPSA;
2. Be a public or private, not-for-profit, out-patient facility;
3. Match the SLRP award, on a dollar-for-dollar basis;
4. Pay the provider a prevailing wage; and,
5. Provide services on a free or reduced fee schedule basis to individuals at or below 200% of the federal poverty level.

The table below shows the areas of the state where current awarded providers are practicing:

Currently, there are 415 SLRP Certified Eligible Sites: 392 primary care, 165 mental health, and 135 dental health. Four are located in Frontier areas, 140 in Rural areas, and 271 in Urban areas.

OSHPD notifies all CES when the application cycle opens up each year. OSHPD/SLRP sends stakeholder announcements, updates the SLRP Website and contacts current awardees (healthcare providers) who are eligible for an extension award. The CES application is open year-round. The provider application cycle is tentatively set for August 1 to October 1 of each year but has varied the last few years due to the implementation of OSHPDs online application system.

Analysis Prepared by: Lara Flynn / HEALTH / (916) 319-2097 FN: 0004120

 THIRD READING  

Bill No: AB 2048

Author:

: 8/15/16

Vote:

SENATE HEALTH COMMITTEE: 8-0, 6/29/16

AYES: Hernandez, Nguyen, Hall, Mitchell, Monning, Nielsen, Pan, Roth

NO VOTE RECORDED: Wolk

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/11/16

AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen

ASSEMBLY FLOOR: 80-0, 6/1/16 - See last page for vote

SUBJECT:

SOURCE: Central Valley Health Network

DIGEST: This bill requires the Office of Statewide Planning and Development (OSHPD), in its administration of the State Loan Repayment Program (SLRP), to include all federally qualified health centers (FQHCs) located in California on the certified eligible site (CES) list. This bill permits OSHPD to use state funds for purposes of providing required matching funds for the National Health Service Corps State Loan Repayment Program in any year in which funding is appropriated by the annual Budget Act for that purpose.

ANALYSIS: Existing law requires OSHPD, in administering SLRP to strive, whenever feasible, to equitably distribute loan repayment awards between eligible urban and rural program sites, after taking into account the availability of health care services in the communities to be served and the number of individuals to be served in each program site. Requires OSHPD to set a reasonable deadline for when applications are required to be received and requires all eligible applications to be given consideration before any award is granted. 

This bill:

1. Requires OSHPD to include all FQHCs located in California in the SLRP’s CES list.
2. Requires OSHPD to notify all CESs when the SLRP opens each application cycle and to strive, to the extent possible, to maximize the number of applications received each cycle.
3. Requires applicants, as part of the applicant’s initial application, to agree to provide matching funds.

Comments

1. Author’s statement. According to the author, the SLRP was created in 1987 to increase and retain the number of primary care physicians, dentists, nurse practitioners, pharmacists, and mental and behavioral specialists in health professional shortage areas. While the SLRP is an important program to recruit healthcare professionals to communities in need, FQHCs face burdensome obstacles to participation. Despite their federal designation, each FQHC is required to submit an application to be placed on the list of CES before applicants from their facility may be considered for loan repayment. In addition, FQHCs must renew their application every three years to continue participation in the SLRP. Finally, federal SLRP dollars require a state match, but, while other states provide this match themselves, California has shifted the cost onto the health centers. California receives just $1 million in federal funding annually, but many small and medium size health centers that cannot afford to provide matching funds are precluded from SLRP participation. As a result of these requirements, less than one third of the health centers in the state are currently listed on the CES.
2. FQHCs. As noted by the author, FQHCs serve a significant portion of the uninsured and underinsured in California. They are open-door providers that treat patients on a sliding scale fee structure and make their services available regardless of a patient's ability to pay. There are approximately 600 FQHCs in California, all of which are either non-profit community clinics or government entities. Community clinics and health centers provide health care to 14% of Californians. This figure is even higher in rural or remote areas that struggle to attract and retain health care providers.
3. The California State Loan Repayment Program. According to the National Health Services Corp, SLRP is a federally-funded grant program to states and territories that provides cost-sharing grants to assist them in operating their own state educational loan repayment programs for primary care providers working in Health Professional Shortage Areas (HPSAs) within their state. SLRP does not provide loan repayment directly to individual health professionals. SLRP requires matching funds from the state applicant and administration of the program by a state agency. States must agree to make available (directly or through donations from public or private entities) non-federal contributions in cash toward SLRP contracts. States are not required to include all eligible disciplines in their program, but eligible professions include: physicians, nurse practitioners, physician assistants, dental professionals, mental health professionals, registered nurses, and pharmacists. SLRP authorizes repayment of qualified educational loans for eligible primary health care professionals, who must commit to an initial two year full-time or four year half-time service agreement to provide direct patient care in a primary, dental, or mental health HPSA. In California, in order for a site to be eligible to host SLRP providers, it must:
   1. Be located in a federally designated HPSA;
   2. Be a public or private, not-for-profit, out-patient facility;
   3. Match the SLRP award, on a dollar-for-dollar basis;
   4. Pay the provider a prevailing wage; and,
   5. Provide services on a free or reduced fee schedule basis to individuals at or below 200% of the federal poverty level.

The purpose of the CES list is to identify those sites that are located in a HPSA and agree to match the SLRP award amount. When a site submits a CES application, SLRP determines if the site is located in a HPSA, if the site is in Northern, Central, or Southern California, and if it is in a Rural, Urban, or Frontier area. (A "Frontier area" by federal definition, is an area with population density of less than 11 persons per square mile). HPSA site designations are valid for three years; then they must be recertified by SLRP to ensure they are still located in a HPSA. If a site loses its HPSA designation, it is no longer an eligible site. FQHCs are automatically approved HPSA designations through the NHSC. However, SLRP does not currently automatically approve all FQHCs; if SLRP did, it would be assuming all FQHCs could match the SLRP award amount.

SLRP receives $1 million per grant year. The number of awards given out depends upon how many applications are received. Because the purpose of SLRP is to recruit and retain high quality healthcare professionals working in HPSAs, applicants requesting an extension usually receive an award.

The table below shows funding, applicant, and award amounts:

*2013 funding was reduced due to Federal Sequester

The table below shows the areas of the state where current awarded providers are practicing:

1. SLRP participation. Currently, there are 415 SLRP CESs: 392 primary care, 165 mental health, and 135 dental health. Four are located in Frontier areas, 140 in Rural areas, and 271 in Urban areas. OSHPD notifies all CES when the application cycle opens up each year. OSHPD/SLRP sends stakeholder announcements, updates the SLRP Web site and contacts current awardees (healthcare providers) who are eligible for an extension award. The CES application is open year-round. The provider application cycle is tentatively set for August 1 to October 1 of each year but has varied the last few years due to the implementation of OSHPDs online application system.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee, no significant fiscal impact is anticipated by automatically making all FQHCs eligible to participate. Automatically putting all FQHCs on the eligible list does not guarantee any funding from the state, it only makes them automatically eligible to participate, providing they meet other program requirements.

SUPPORT: (Verified 8/15/16)

Central Valley Health Network (source)

APLA Health & Wellness

Association of California Healthcare Districts

California Primary Care Association

Coalition of Orange County Community Health Centers

Community Clinic Association of Los Angeles County

Community Clinic Consortium

Family Health Centers of San Diego

Health Alliance of Northern California•

La Clinica de La Raza

Los Angeles LGBT Center

Neighborhood Healthcare

North Coast Clinics Network

Northeast Valley Health Corporation

Sacramento Native American Health Center, Inc.

San Ysidro Health Center

South Central Family Health Center

White Memorial Community Health Center

OPPOSITION: (Verified 8/15/16)

Department of Finance

Office of Statewide Health Planning and Development

ASSEMBLY FLOOR: 80-0, 6/1/16

AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon

Prepared by:

8/15/16 20:10:13

**** END ****

SENATE COMMITTEE ON

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 2048 (Gray) - National Health Service Corps State Loan Repayment Program

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on August 11, 2016

Bill Summary:

AB 2048 would make all federally qualified health centers eligible to participate in the National Health Service Corps State Loan Repayment Program.

Fiscal Impact:

• No significant fiscal impact is anticipated by automatically making all federally qualified health centers eligible to participate. Automatically putting all federal qualified health centers on the eligible list does not guarantee any funding from the state, it only makes them automatically eligible to participate, providing they meet other program requirements.

Author Amendments:

Delete the authority for the Office to provide state matching funds for the program.

-- END --

SENATE COMMITTEE ON

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 2048 (Gray) - National Health Service Corps State Loan Repayment Program

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

AB 2048 would make all federally qualified health centers eligible to participate in the National Health Service Corps State Loan Repayment Program. The bill would authorize the Office of Statewide Health Planning and Development, upon appropriation, to use state funds to provide federally required matching funds.

Fiscal Impact:

• No significant fiscal impact is anticipated by automatically making all federally qualified health centers eligible to participate. Automatically putting all federal qualified health centers on the eligible list does not guarantee any funding from the state, it only makes them automatically eligible to participate, providing they meet other program requirements.
• Potential additional administrative costs, up to $180,000 per year to process additional applications (General Fund or federal funds). The Office of Statewide Health Planning and Development indicates that it anticipates receiving additional applications from FQHCs, because the bill would remove an existing administrative requirement that they apply for inclusion in the eligible site list. Most likely, the Office would only receive a significant number of additional applications in years in which the state provides the matching funds currently required of participating clinics.
• Potential future costs, up to $1 million per year, to provide federally-required matching funds (General Fund). The bill would authorize the Office, upon appropriation of the Legislature, to use state funds to provide the federally-required matching funds. Currently, the state received $1 million per year from the federal government, which must be matched by an equal amount of state or other non-federal funds (in recent years matching funds have been provided by participating clinics).

Background:

The National Health Service Corps State Loan Repayment Program is a federal program that provides funding to the states to provide loan repayments to qualified health care providers working in underserved areas. The state receives $1 million per year in federal funding and federal law requires an equivalent match using non-federal funds. The state currently requires participating clinics to put up the required matching funds. The program requires a two or four year commitment from the health care provider and provides up to $50,000 per award. Under current law, clinics that wish to participate in the program must apply the Office of Statewide Health Planning and Development to be included in the eligible site list, and must reapply every three years to remain on the eligible site list. Being on the eligible site list does not mean that clinics are automatically considered for participation in the program. Clinics that wish to participate must also apply for funding.

Proposed Law:

AB 2048 would make all federally qualified health centers eligible to participate in the State Loan Repayment Program.

The bill would authorize the Office of Statewide Health Planning and Development, upon appropriation, to use state funds to provide federally required matching funds.

Staff Comments:

To the extent that future state funds are appropriated for this program, it would not increase the overall number of health care professionals that are participating in the program. Rather, it would reduce the financial burden on clinics to provide the federally-required matching funds. In recent years, the Office has been able to award all of the available federal funding, indicating that the matching requirement imposed on clinics is not a barrier to providing funding to health care professionals. If the Legislature wishes to improve its health care workforce in underserved areas, it would be more effective to use any future state funding to make additional awards to qualifying health care providers.

The Office indicates that there would be additional applications because the bill removes the requirement that clinics first apply for inclusion in the eligible site list before applying for grant funds. Given that the Office has exhausted its available funding each year and that clinics typically have a matching requirement (which could be relaxed under the bill), staff does not believe that there is likely to be a significant increase in the number of applications in years in which clinics are required to provide the matching funds.

The recently enacted 2016-17 Budget Act includes $33.3 million per year for three years from the General Fund to support new and existing primary care residency positions. (Funding will not be available for use until federal approval of the state’s hospital quality assurance fee has been granted, likely in the spring of 2017.) However, that funding is specifically appropriated to an existing grant program (the Song-Brown Program) and would not be available to provide the non-federal match authorized in this bill.

-- END --

SENATE COMMITTEE ON HEALTH

Senator Ed Hernandez, O.D., Chair

BILL NO: AB 2048

SUBJECT: National Health Service Corps State Loan Repayment Program

SUMMARY:

1. Requires the Office of Statewide Planning and Development (OSHPD), in its administration of the State Loan Repayment Program, to include all federally qualified health centers located in California on the certified eligible site list. Permits OSHPD to use state funds for purposes of providing required matching funds for the National Health Service Corps State Loan Repayment Program in any year in which funding is appropriated by the annual Budget Act for that purpose.

Existing law: Requires OSHPD, in administering the State Loan Repayment Program (SLRP) to strive, whenever feasible, to equitably distribute loan repayment awards between eligible urban and rural program sites, after taking into account the availability of health care services in the communities to be served and the number of individuals to be served in each program site. Requires OSHPD to set a reasonable deadline for when applications are required to be received and requires all eligible applications to be given consideration before any award is granted. 

This bill:

1. Requires OSHPD to include all federally qualified health centers (FQHCs) located in California in the SLRP’s certified eligible site (CES) list.
2. Requires OSHPD to notify all certified eligible sites when the SLRP opens each application cycle and to strive, to the extent possible, to maximize the number of applications received each cycle.
3. Requires applicants, as part of the initial application process, to agree to provide matching funds in any year that OSHPD does not receive required matching funds in the annual Budget Act, but prohibits OSHPD from requiring applicants and participants to provide matching funds in that case.
4. Requires OSHPD, until January 1, 2021, to submit an annual report, as specified, to the Senate and Assembly Committees on Health that includes:
   1. The number of applications received during the annual application cycle;
   2. The percentage of applicants that were awarded funding under the program;
   3. The percentage of applicants that were not awarded funding under the program; and,
   4. The percentage of funding that went to each geographic region in the state.
5. Permits OSHPD to use state funds for purposes of providing required matching funds for the SLRP in any year in which funding is appropriated by the annual Budget Act for that purpose.

FISCAL EFFECT:

According to the Assembly Appropriations Committee: Up to $200,000 in one-time costs to OSHPD to update policies, procedures, forms, as well as handle a significant influx of applications (California Health Planning Fund). General Fund cost pressure to appropriate state funding for the SLRP in future years

PRIOR VOTES:

COMMENTS:

1. Author’s statement. According to the author, the SLRP was created in 1987 to increase and retain the number of primary care physicians, dentists, nurse practitioners, pharmacists, and mental and behavioral specialists in health professional shortage areas. While the SLRP is an important program to recruit healthcare professionals to communities in need, FQHCs face burdensome obstacles to participation. Despite their federal designation, each FQHC is required to submit an application to be placed on the list of CES before applicants from their facility may be considered for loan repayment. In addition, FQHCs must renew their application every three years to continue participation in the SLRP. Finally, federal SLRP dollars require a state match, but, while other states provide this match themselves, California has shifted the cost onto the health centers. California receives just $1 million in federal funding annually, but many small and medium size health centers that cannot afford to provide matching funds are precluded from SLRP participation. As a result of these requirements, less than one third of the health centers in the state are currently listed on the CES.
2. FQHCs. As noted by the author, FQHCs serve a significant portion of the uninsured and underinsured in California. They are open-door providers that treat patients on a sliding scale fee structure and make their services available regardless of a patient's ability to pay. There are approximately 600 FQHCs in California, all of which are either non-profit community clinics or government entities. Community clinics and health centers provide health care to 14% of Californians. This figure is even higher in rural or remote areas that struggle to attract and retain health care providers.
   
3. The California State Loan Repayment Program. According to the National Health Services Corp, SLRP is a federally-funded grant program to states and territories that provides cost-sharing grants to assist them in operating their own state educational loan repayment programs for primary care providers working in Health Professional Shortage Areas (HPSAs) within their state. SLRP does not provide loan repayment directly to individual health professionals. SLRP requires matching funds from the state applicant and administration of the program by a state agency. States must agree to make available (directly or through donations from public or private entities) non-federal contributions in cash toward SLRP contracts. States are not required to include all eligible disciplines in their program, but eligible professions include: physicians, nurse practitioners, physician assistants, dental professionals, mental health professionals, registered nurses, and pharmacists. SLRP authorizes repayment of qualified educational loans for eligible primary health care professionals, who must commit to an initial two year full-time or four year half-time service agreement to provide direct patient care in a primary, dental, or mental health HPSA. In California, in order for a site to be eligible to host SLRP providers, it must:
   
   1. Be located in a federally designated HPSA;
   2. Be a public or private, not-for-profit, out-patient facility;
   3. Match the SLRP award, on a dollar-for-dollar basis;
   4. Pay the provider a prevailing wage; and,
   5. Provide services on a free or reduced fee schedule basis to individuals at or below 200% of the federal poverty level.

The purpose of the CES list is to identify those sites that are located in a HPSA and agree to match the SLRP award amount. When a site submits a CES application, SLRP determines if the site is located in a HPSA, if the site is in Northern, Central, or Southern California, and if it is in a Rural, Urban, or Frontier area. (A "Frontier area" by federal definition, is an area with population density of less than 11 persons per square mile). HPSA site designations are valid for three years; then they must be recertified by SLRP to ensure they are still located in a HPSA. If a site loses its HPSA designation, it is no longer an eligible site. FQHCs are automatically approved HPSA designations through the NHSC. However, SLRP does not currently automatically approve all FQHCs; if SLRP did, it would be assuming all FQHCs could match the SLRP award amount.

SLRP receives $1 million per grant year. The number of awards given out depends upon how many applications are received. Because the purpose of SLRP is to recruit and retain high quality healthcare professionals working in HPSAs, applicants requesting an extension usually receive an award.

The table below shows funding, applicant, and award amounts:

    *2013 funding was reduced due to Federal Sequester

The table below shows the areas of the state where current awarded providers are practicing:

1. SLRP participation. Currently, there are 415 SLRP Certified Eligible Sites: 392 primary care, 165 mental health, and 135 dental health. Four are located in Frontier areas, 140 in Rural areas, and 271 in Urban areas. OSHPD notifies all CES when the application cycle opens up each year. OSHPD/SLRP sends stakeholder announcements, updates the SLRP Website and contacts current awardees (healthcare providers) who are eligible for an extension award. The CES application is open year-round. The provider application cycle is tentatively set for August 1 to October 1 of each year but has varied the last few years due to the implementation of OSHPDs online application system.
   
2. Prior legislation. AB 820 (Nakanishi, Chapter 682, Statutes of 2003), requires OSHPD, in administering SLRP, to strive, whenever feasible, to equitably distribute loan repayment awards between urban and rural program sites, after taking into account the availability of health care services in the communities to be served and the number of individuals to be served in each program site. Requires that all eligible applications be given consideration before any award is granted.

1. Support. The California Primary Care Association, Community Clinic Association of Los Angeles, and Redwood Community Health Coalition all support this bill stating that it is a simple, yet effective way to support community health centers ability to recruit and retain providers by strengthening SLRP. The proponents note that at a time when our state's underserved communities are grappling with a severe and growing primary care provider shortage, SLRP increases the number of primary care providers practicing in federally designated HPSAs, however SLRP is currently structured in a way that disincentives participation among FQHCs who serve low-income and uninsured communities. The supporters conclude that this bill will address these challenges by streamlining participation in the SLRP through automatic enrollment for FQHCs as CES. The Association of California Healthcare Districts (ACHD) notes that as the demand for physicians rises with the implementation of the Patient Protection and Affordable Care Act, it is of utmost importance that California be innovative in addressing physician shortage issues in underserved areas, where many FQHC's operate. ACHD also states, by appropriating the necessary funds for the SLRP, California will continue to promote access to healthcare in the most underserved areas of the state.

SUPPORT AND OPPOSITION:

Support: Central Valley Health Health Network (sponsor)

APLA Health & Wellness

Association of California Healthcare Districts

California Primary Care Association

Coalition of Orange County Community Health Centers

Community Clinic Association of Los Angeles County

Community Clinic Consortium

Family Health Centers of San Diego

Health Alliance of Northern California•

La Clinica de La Raza

Los Angeles LGBT Center

Neighborhood Healthcare

North Coast Clinics Network

Northeast Valley Health Corporation

Sacramento Native American Health Center, Inc.

San Ysidro Health Center

South Central Family Health Center

White Memorial Community Health Center

Oppose: None Received

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 2048

Author:(Gray)

As Amended Ver:

Majority vote

SUMMARY: Requires the Office of Statewide Health Planning and Development (OSHPD), in its administration of the National Health Service Corps State Loan Repayment Program (SLRP), to include all federally qualified health centers (FQHCs) located in California on the program's certified eligible site list. Specifically, this bill:

1. Requires OSHPD to notify all certified eligible sites when the program opens each application cycle, and to maximize, to the extent possible, the number of applications received each cycle.
2. Specifies, as part of the initial application process, program applicants must agree to provide matching funds in any year that OSHPD does not receive the required matching funds, and prohibits OSHPD from requiring program applicants and participants to provide matching funds in any year that OSHPD receives the required matching funds.
3. Requires OSHPD to submit an annual report to the Senate and Assembly Committees on Health that includes all of the following information:
   1. The number of applications received during the annual application cycle;
   2. The percentage of applicants who were awarded funding under the program; and,
   3. The percentage of funding that went to each geographic region in the state.
4. Authorized OSHPD to use state funds for purposes of providing required matching funds for the SLRP in any year in which funding is appropriated by the annual Budget Act for that purpose.

EXISTING LAW: Requires OSHPD, in its administration of the SLRP to strive, whenever feasible, to equitably distribute loan repayment awards between eligible urban and rural program sites, after taking into account the availability of health care services in the communities to be served and the number of individuals to be served in each program site.

FISCAL EFFECT: According to the Assembly Appropriations Committee:

1. Up to $200,000 in one-time costs to OSHPD to update policies, procedures, forms, as well as handle a significant influx of applications (California Health Planning Fund).
2. General Fund cost pressure to appropriate state funding for the SLRP in future years.

COMMENTS: According to the author, FQHCs are safety net providers that serve some of the nation's most vulnerable populations. The author states they are required to offer services to all persons regardless of their ability to pay, be a nonprofit or public organization, serve a medically underserved area, and provide comprehensive primary care services. The author contends that FQHCs reduce health disparities by serving populations that would otherwise not have access to services, and care received at these centers is ranked among the most cost-effective, producing $24 billion in annual health system savings, yet studies have found that the quality of care provided is equal to or even greater that the quality of care provided elsewhere.

The author notes the SLRP was created in 1987 to increase and retain the number of primary care physicians, dentists, nurse practitioners, pharmacists, and mental and behavioral specialists in Health Professional Shortage Areas (HPSAs), and while the SLRP is an important program to recruit healthcare professionals to communities in need, FQHCs face burdensome obstacles to participation. The author states that, despite their federal designation, each FQHC is required to submit an application to be placed on the list of Certified Eligible Sites (CES) before applicants from their facility may be considered for loan repayment. Additionally, FQHCs must renew their application every three years to continue participation in the SLRP. The author contends that, as a result of these requirements, less than one-third of the health centers in the state are currently listed on the CES. The author also notes that federal SLRP dollars require a state match, and, while other states provide this match themselves, California has shifted that cost onto the health centers. The author points out that California receives only $1 million in federal funding annually, and many small and medium size health centers that cannot afford to provide matching funds are precluded from SLRP participation.

The author concludes that this bill will streamline participation in the SLRP by eliminating CES application and renewal requirements for FQHCs, creating notification and reporting requirements to keep health centers and the Legislature informed about the program, and lifting the financial burden of providing matching funds off the shoulders of the health centers.

As noted by the author, FQHCs serve a significant portion of the uninsured and underinsured in California. They are open-door providers that treat patients on a sliding scale fee structure and make their services available regardless of a patient's ability to pay. There are approximately 600 FQHCs in California. All FQHCs are either non-profit community clinics or government entities Community clinics and health centers provide health care to 14% of Californians. This figure is even higher in rural or remote areas that struggle to attract and retain health care providers.

SLRP was congressionally authorized in 1987 under the U.S. Public Health Services Act. SLRP increases the number of primary care physicians, dentists, dental hygienists, physician assistants, nurse practitioners, certified nurse midwives, pharmacists and mental/behavioral health providers practicing in federally designated California HPSAs. SLRP authorizes repayment of qualified educational loans for eligible primary health care professionals, who must commit to an initial two year full-time or four year half-time service agreement to provide direct patient care in a primary, dental, or mental health HPSA.

In order for a site to be eligible to host SLRP providers, it must:

1. Be located in a federally designated HPSA;
2. Be a public or private, not-for-profit, out-patient facility;
3. Match the SLRP award, on a dollar-for-dollar basis;
4. Pay the provider a prevailing wage; and,
5. Provide services on a free or reduced fee schedule basis to individuals at or below 200% of the federal poverty level.

The purpose of the CES list is to identify those sites that are located in a HPSA and agree to match the SLRP award amount. When a site submits a CES application, SLRP determines if the site is located in a HPSA, if the site is in Northern, Central, or Southern California, and if it is in a Rural, Urban, or Frontier area. (A "Frontier area" by federal definition, is an area with population density of less than 11 persons per square mile). HPSA site designations are valid for three years; then they must be recertified by SLRP to ensure they are still located in a HPSA. If a site loses its HPSA designation, it is no longer an eligible site. FQHCs are automatically approved HPSA designations through the NHSC. However, SLRP does not currently automatically approve all FQHCs; if SLRP did, it would be assuming all FQHCs could match the SLRP award amount. SLRP is federally funded through a grant from the Health Resources and Services Administration. SLRP receives $1 million per grant year. The number of awards given out depends upon how many applications are received. Because the purpose of SLRP is to recruit and retain high quality healthcare professionals working in HPSAs, applicants requesting an extension usually receive an award.

The table below shows the areas of the state where current awarded providers are practicing:

Currently, there are 415 SLRP Certified Eligible Sites: 392 primary care, 165 mental health, and 135 dental health. Four are located in Frontier areas, 140 in Rural areas, and 271 in Urban areas.

OSHPD notifies all CES when the application cycle opens up each year. OSHPD/SLRP sends stakeholder announcements, updates the SLRP Website and contacts current awardees (healthcare providers) who are eligible for an extension award. The CES application is open year-round. The provider application cycle is tentatively set for August 1 to October 1 of each year but has varied the last few years due to the implementation of OSHPDs online application system.

Analysis Prepared by: Lara Flynn / HEALTH / (916) 319-2097 FN: 0003223

Date of Hearing: April 20, 2016

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 2048

Author:(Gray) – As Amended Ver:April 7, 2016

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill makes changes to the federally funded State Loan Repayment Program (SLRP) administered by the Office of Statewide Health Planning and Development, and appropriates state funding to support the program. Specifically, this bill:

1. Requires OHPD include all federally qualified health centers (FQHCs) located in California in the program’s certified eligible site list, to strive to maximize the number of applications per grant cycle, and to report to the Legislature on applications and awards.
2. Continuously appropriates $1 million to OSHPD, without regard to fiscal year, to provide state matching funds for the SLRP.

FISCAL EFFECT:

1. One-time cost of $1 million GF to provide state matching funds for the program, as appropriated by this bill.
2. Up to $200,000 in one-time costs to OSHPD to update policies, procedures, forms, as well as handle a significant influx of applications (California Health Planning Fund).
3. Ongoing GF cost pressure to continue state funding participation for the SLRP in future years.

COMMENTS:

1. Purpose. This bill is intended to streamline participation in the SLRP by eliminating burdensome application and renewal requirements for FQHCs and shifting the responsibility to provide matching funds to the state.
2. Background. The SLRP is a federally-funded, state-administered program that provides loan repayment funds of up to $50,000 per service obligation, which is either a full-time two-year or half-time four-year period. Extensions to the service obligation are also available. The program includes a matching requirement. Federal rules require states to make available (directly or through donations from public or private entities) non-federal contributions in cash toward SLRP contracts in an amount not less than $1 for each $1 of federal funds provided in the grant. California does not currently provide state funding for the required match; instead, participating clinics provide the match. Thus, a $50,000 award would include $25,000 from the federal grant and $25,000 from the clinic's match. Essentially, providing this benefit costs the clinic an additional $12,500 per year for two years on top of the provider's salary, while the eligible provider receives a tax-free loan repayment award of up to $50,000 over two years.

This bill also requires all California FQHCs to be included in the program's "certified eligible list." Currently, OSHPD uses the list to identify sites that are located in areas that are designated as "health professional shortage areas" and that have agreed to provide matching funds. To be on the list, sites must apply and renew every three years. By federal rule, all community clinics meet the "health professional shortage" criteria— and if the program no longer requires clinics to match funds as this bill appears to propose, then allowing automatic eligibility for FQHCs seems reasonable.

1. Comments. While providing state funding would benefit clinics, it does not appear that it would increase the number of loan repayment awards that occur though the program. If state funding simply displaces private funding for the match, the state will pay $1 million for the same overall amount of recruitment and retention benefits that would occur in absence of state funding. If this bill is attempting to change the current distribution of funds, rather than increasing the total number of awards, the author could consider alternative ways to do this, or could more clearly specify this intent. Also, it is unclear why the $1 million is continuously appropriated and whether it is intended that the department use this state funding to match federal funding for all recipients, or only for those who could not otherwise afford the match.

Analysis Prepared by: Lisa Murawski / APPR. / (916) 319-2081

Date of Hearing: April 5, 2016

ASSEMBLY COMMITTEE ON HEALTH

Jim Wood, Chair

ABPCA Bill Id:AB 2048

Author:Gray – As Amended Ver:March 16, 2016

SUBJECT: National Health Service Corps State Loan Repayment Program.

SUMMARY: Requires the Office of Statewide Health Planning and Development (OSHPD), in its administration of the National Health Service Corps State Loan Repayment Program (SLRP), to include all federally qualified health centers (FQHCs) located in California on the program's certified eligible site list. Specifically, this bill:

1. Requires OSHPD to notify all certified eligible sites when the program opens each application cycle, and to maximize, to the extent possible, the number of applications received each cycle.
2. Prohibits OSHPD from requiring program applicants and participants to provide matching funds in years that OSHPD receives state matching funds.
3. Requires OSHPD to submit an annual report to the Senate and Assembly Committees on Health that includes all of the following information:
   1. The number of applications received during the annual application cycle;
   2. The percentage of applicants who were awarded funding under the program; and,
   3. The percentage of funding that went to each geographic region in the state.
4. Continuously appropriates $1 million from the General Fund (GF), without regard to fiscal year, to OSHPD for purposes of providing state matching funds for the SLRP.

EXISTING LAW: Requires OSHPD, in its administration of the SLRP to strive, whenever feasible, to equitably distribute loan repayment awards between eligible urban and rural program sites, after taking into account the availability of health care services in the communities to be served and the number of individuals to be served in each program site.

FISCAL EFFECT: This bill has not been analyzed by a fiscal committee.

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, FQHCs are safety net providers that serve some of the nation’s most vulnerable populations. The author states they are required to offer services to all persons regardless of their ability to pay, be a nonprofit or public organization, serve a medically underserved area, and provide comprehensive primary care services. The author contends that FQHCs reduce health disparities by serving populations that would otherwise not have access to services, and care received at these centers is ranked among the most cost-effective, producing $24 billion in annual health system savings, yet studies have found that the quality of care provided is equal to or even greater that the quality of care provided elsewhere.

The author notes the SLRP was created in 1987 to increase and retain the number of primary care physicians, dentists, nurse practitioners, pharmacists, and mental and behavioral specialists in Health Professional Shortage Areas (HPSAs), and while the SLRP is an important program to recruit healthcare professionals to communities in need, FQHCs face burdensome obstacles to participation. The author states that, despite their federal designation, each FQHC is required to submit an application to be placed on the list of Certified Eligible Sites (CES) before applicants from their facility may be considered for loan repayment. Additionally, FQHCs must renew their application every three years to continue participation in the SLRP. The author contends that, as a result of these requirements, less than one-third of the health centers in the state are currently listed on the CES. The author also notes that federal SLRP dollars require a state match, and, while other states provide this match themselves, California has shifted that cost onto the health centers. The author points out that California receives only $1 million in federal funding annually, and many small and medium size health centers that cannot afford to provide matching funds are precluded from SLRP participation.

The author concludes that this bill will streamline participation in the SLRP by eliminating CES application and renewal requirements for FQHCs, creating notification and reporting requirements to keep health centers and the Legislature informed about the program, and lifting the financial burden of providing matching funds off the shoulders of the health centers.

1. BACKGROUND.
   
   1. FQHCs. As noted by the author, FQHCs serve a significant portion of the uninsured and underinsured in California. They are open-door providers that treat patients on a sliding scale fee structure and make their services available regardless of a patient's ability to pay. There are approximately 600 FQHCs in California. All FQHCs are either non-profit community clinics or government entities. Community clinics and health centers provide health care to 14% of Californians. This figure is even higher in rural or remote areas that struggle to attract and retain health care providers.
      
   2. The California State Loan Repayment Program. SLRP was congressionally authorized in 1987 under the U.S. Public Health Services Act. SLRP increases the number of primary care physicians, dentists, dental hygienists, physician assistants, nurse practitioners, certified nurse midwives, pharmacists and mental/behavioral health providers practicing in federally designated California HPSAs. SLRP authorizes repayment of qualified educational loans for eligible primary health care professionals, who must commit to an initial two year full-time or four year half-time service agreement to provide direct patient care in a primary, dental, or mental health HPSA.
      
      In order for a site to be eligible to host SLRP providers, it must:
      
      1. Be located in a federally designated HPSA;
      2. Be a public or private, not-for-profit, out-patient facility;
      3. Match the SLRP award, on a dollar-for-dollar basis;
      4. Pay the provider a prevailing wage; and,
      5. Provide services on a free or reduced fee schedule basis to individuals at or below 200% of the federal poverty level.

The purpose of the CES list is to identify those sites that are located in a HPSA and agree to match the SLRP award amount. When a site submits a CES application, SLRP determines if the site is located in a HPSA, if the site is in Northern, Central, or Southern California, and if it is in a Rural, Urban, or Frontier area. (A "Frontier area" by federal definition, is an area with population density of less than 11 persons per square mile). HPSA site designations are valid for three years; then they must be recertified by SLRP to ensure they are still located in a HPSA. If a site loses its HPSA designation, it is no longer an eligible site. FQHCs are automatically approved HPSA designations through the NHSC. However, SLRP does not currently automatically approve all FQHCs; if SLRP did, it would be assuming all FQHCs could match the SLRP award amount.

SLRP is federally funded through a grant from the Health Resources and Services Administration. SLRP receives $1 million per grant year. The number of awards given out depends upon how many applications are received. Because the purpose of SLRP is to recruit and retain high quality healthcare professionals working in HPSAs, applicants requesting an extension usually receive an award.

The table below shows the areas of the state where current awarded providers are practicing:

• 1. SLRP participation. Currently, there are 415 SLRP Certified Eligible Sites: 392 primary care, 165 mental health, and 135 dental health. Four are located in Frontier areas, 140 in Rural areas, and 271 in Urban areas.
     
     OSHPD notifies all CES when the application cycle opens up each year. OSHPD/SLRP sends stakeholder announcements, updates the SLRP Website and contacts current awardees (healthcare providers) who are eligible for an extension award. The CES application is open year-round. The provider application cycle is tentatively set for August 1 to October 1 of each year but has varied the last few years due to the implementation of OSHPDs online application system.
     

1. SUPPORT. The California Primary Care Association, Community Clinic Association of Los Angeles, and Redwood Community Health Coalition all support this bill stating that it is a simple, yet effective way to support community health centers ability to recruit and retain providers by strengthening SLRP. The proponents note that at a time when our state's underserved communities are grappling with a severe and growing primary care provider shortage, SLRP increases the number of primary care providers practicing in federally designated HPSAs, however SLRP is currently structured in a way that disincentives participation among FQHCs who serve low-income and uninsured communities. The supporters conclude that this bill will address these challenges by streamlining participation in the SLRP through automatic enrollment for FQHCs as CES.
   
   The Association of California Healthcare Districts (ACHD) notes that as the demand for physicians rises with the implementation of the Pateint Protection and Affordable Care Act, it is of utmost importance that California be innovative in addressing physician shortage issues in underserved areas, where many FQHC's operate. ACHD also states, by appropriating the necessary funds for the SLRP, California will continue to promote access to healthcare in the most underserved areas of the state.
2. PREVIOUS LEGISLATION. AB 820 (Nakanishi) Chapter 682, Statutes of 2003, requires OSHPD, in administering SLRP, to strive, whenever feasible, to equitably distribute loan repayment awards between urban and rural program sites, after taking into account the availability of health care services in the communities to be served and the number of individuals to be served in each program site. Requires that all eligible applications be given consideration before any award is granted.
   
3. TECHNICAL AMENDMENT. As currently drafted this bill requires OSHPD to include all FQHCs located in California on the SLRP program's CES list. However, by deleting the requirement for FQHCs to reapply to be on the list, this bill removes the mechanism by which SLRP/OSHPD determines if an FQHC is still in a HPSA and willing to match the funds. This bill should be amended to require the provider’s site to certify their agreement to match the SLRP award as part of the provider’s application in any year OSHPD does not receive state matching funds.

REGISTERED SUPPORT / OPPOSITION:

Support

APLA Health & Wellness

Association of California Healthcare Districts

California Primary Care Association

Central Valley Health Network

Coalition of Orange County Community Health Centers

Community Clinic Association of Los Angeles

Community Clinic Consortium

Health Alliance of Northern California

La Clinicia de La Raza

Los Angeles LGBT Center

Marin Community Clinics

Neighborhood Healthcare

Northeast Valley Health Corporation

Redwood Community Health Coalition

Sacramento Native American Health Center, Inc.

San Ysidro Health Center

South Central Family Health Center

Opposition

None on file.

Analysis Prepared by: Lara Flynn / HEALTH / (916) 319-2097