Existing law establishes the Steven M. Thompson Physician Corps Loan Repayment Program (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, to primarily provide funding for the ongoing operations of the program. Existing law requires the foundation and the Office of Statewide Health Planning and Development to develop guidelines using specified criteria for selection and placement of applicants.

Existing law defines practice setting, for these purposes, to include a community clinic, as defined, 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 countys role to serve its indigent population, that is located in a medically underserved area and at least 50% of whose patients are from a medically underserved population. Existing law also defines practice setting, for these purposes, to include a physician owned and operated medical practice setting that provides primary care located in a medically underserved area and has a minimum of 50% of patients who are uninsured, Medi-Cal beneficiaries, or beneficiaries of another publicly funded program that serves patients who earn less than 250% of the federal poverty level.

This bill would instead require, for purposes of this definition, only until January 1, 2020, and only for program participants who enroll in the program on or after January 1, 2018, as specified, and before January 1, 2020, that the clinic or the physician owned and operated medical practice setting have at least 30% of patients, if the area is rural, a rural area, as defined, or at least 50% of patients, if the area is urban, not a rural area, who are from the above-described populations. By expanding the authorization for the use of moneys in the Medically Underserved Account for Physicians, this bill would make an appropriation.

Existing law establishes the Steven M. Thompson Physician Corps Loan Repayment Program (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, to primarily provide funding for the ongoing operations of the program. Existing law requires the foundation and the Office of Statewide Health Planning and Development to develop guidelines using specified criteria for selection and placement of applicants.

Existing law defines practice setting, for these purposes, to include a community clinic, as defined, 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 countys role to serve its indigent population, that is located in a medically underserved area and at least 50% of whose patients are from a medically underserved population. Existing law also defines practice setting, for these purposes, to include a physician owned and operated medical practice setting that provides primary care located in a medically underserved area and has a minimum of 50% of patients who are uninsured, Medi-Cal beneficiaries, or beneficiaries of another publicly funded program that serves patients who earn less than 250% of the federal poverty level.

This bill would instead require, for purposes of this definition, and only for program participants who enroll in the program on or after January 1, 2018, as specified, that the clinic or the physician owned and operated medical practice setting have at least 30% of patients, if the area is rural, or at least 50% of patients, if the area is urban, who are from the above-described populations. By expanding the authorization for the use of moneys in the Medically Underserved Account for Physicians, this bill would make an appropriation.

Existing law establishes the Steven M. Thompson Physician Corps Loan Repayment Program (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, to primarily provide funding for the ongoing operations of the program. Existing law requires the foundation and the Office of Statewide Health Planning and Development to develop guidelines using specified criteria for selection and placement of applicants.

Existing law defines practice setting, for these purposes, to include a community clinic, as defined, 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 countys role to serve its indigent population, that is located in a medically underserved area and at least 50% of whose patients are from a medically underserved population. Existing law also defines practice setting, for these purposes, to include a physician owned and operated medical practice setting that provides primary care located in a medically underserved area and has a minimum of 50% of patients who are uninsured, Medi-Cal beneficiaries, or beneficiaries of another publicly funded program that serves patients who earn less than 250% of the federal poverty level.

This bill would instead require, for purposes of this definition, and only for program participants who enroll in the program on or after January 1, 2018, as specified, that the clinic or the physician owned and operated medical practice setting have at least 30% of patients, if the area is rural, or at least 50% of patients, if the area is urban, who are from the above-described populations. By expanding the authorization for the use of moneys in the Medically Underserved Account for Physicians, this bill would make an appropriation.

Existing law establishes the Steven M. Thompson Physician Corps Loan Repayment Program (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, to primarily provide funding for the ongoing operations of the program. Existing law requires the foundation and the Office of Statewide Health Planning and Development to develop guidelines using specified criteria for selection and placement of applicants.

Existing law defines practice setting, for these purposes, to include a community clinic, as defined, 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 countys role to serve its indigent population, that is located in a medically underserved area and at least 50% of whose patients are from a medically underserved population. Existing law also defines practice setting, for these purposes, to include a physician owned and operated medical practice setting that provides primary care located in a medically underserved area and has a minimum of 50% of patients who are uninsured, Medi-Cal beneficiaries, or beneficiaries of another publicly funded program that serves patients who earn less than 250% of the federal poverty level.

This bill would instead require, for purposes of this definition, that the clinic or the physician owned and operated medical practice setting have at least 30% of patients, if the area is rural, or at least 50% of patients, if the area is urban, who are from the above-described populations. By expanding the authorization for the use of moneys in the Medically Underserved Account for Physicians, this bill would make an appropriation.

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2017 - 2018 Regular Session

AB 148 (Mathis) - California Physician Corps Program: practice setting

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

Bill Summary:

AB 148 would revise the criteria for the California Physician Corps Loan Repayment Program, which provides financial incentives for physicians to work in underserved areas.

Fiscal Impact:

• One-time costs of $120,000 in 2018-19 and $110,000 in 2019, for the Office of Statewide Health Planning and Development to revise regulations, provide technical assistance to an increased number of applicants for funding, and prepare the report required in the bill (California Health Data and Planning Fund). The Office notes that current administrative expenses charged to the Medically Underserved Account for Physicians equal the 5% cap on administrative expenses for that fund. Therefore, the Office anticipates that the additional administrative costs of this bill would be borne by the California Health Data and Planning Fund.
• Unknown additional demand for loan repayment funding due to changes in the program criteria (Medically Underserved Account for Physicians). The bill would allow participating physicians to receive loan repayment funds if they work in a community clinic or medical practice whose patient population is at least 30% uninsured, Medi-Cal beneficiaries, or beneficiaries of other public programs if the practice setting is in a rural area. This is a reduction from the current requirement that at least 50% of the practice’s patient population meet this criteria. By loosening this program criteria, the bill is likely to increase the number of eligible physicians. The size of this impact is unknown.

Background:

Under Current law, the California Physician Corps Program is composed to two programs – the Volunteer Physicians Program and the Stephen M. Thompson Loan Repayment Program. The Volunteer Physicians Program has never been funded and is inactive. The Steven M. Thompson Physician Corps Loan Repayment Program provides up to $105,000 in loan repayments for physicians who agree to work in medically underserved areas for at least three years. Criteria for awarding loan repayments are developed by the Health Professions Education Foundation within the Office of Statewide Health Planning and Development.

In order to qualify for the Steven M. Thompson Physician Corps Loan Repayment Program, a physician must agree to work full time in a community clinic or a medical practice in a medically underserved area whose patient population is at least 50% uninsured or eligible for Medi-Cal or the Healthy Families Program.

Historically, the Steven M. Thompson Loan Repayment Program has been funded at $3 million per year, made up of $1 million from administrative fines levied on health plans and $2 million per year from license fees and donations from physicians. In addition, the California Endowment previously made a $21 million grant to the program, to supplement existing state funding. Those additional grant funds will be fully expended by the end of the current year. Finally, the 2017 Budget Act provides $333,000 for the Program (out of a total General Fund budget augmentation of $100 million over three years for health workforce development programs).

Proposed Law:

AB 148 would revise the criteria for the California Physician Corps Loan Repayment Program, which provides financial incentives for physicians to work in underserved areas.

Specific provisions of the bill would:

• From January 1, 2018 to January 1, 2020, authorize participation in the program for physicians working in a community clinic or medical practice with at least 30% percent of patients who are medically underserved (a decrease from the current requirement that 50% of patients be medically underserved);
• Require the Office of Statewide Health Planning and Development to prepare a study on the effect of the changes in the bill on program funding.

Related Legislation:

AB 565 (Salas, Statutes of 2013) revised the definition of a practice setting for the purposes of the Steven M. Thompson Loan Repayment Program.

Staff Comments:

Over the last ten years, the Office of Statewide Health Planning and Development has awarded all the funding available under the Steven M. Thompson Loan Repayment Program to physicians who qualify under the current criteria. This bill would loosen the existing criteria for the program, to allow physicians who see fewer Medi-Cal or uninsured patients to qualify for funding. Given that the program has been fully subscribed in recent years, the changes in this bill are not likely to increase the supply of physicians providing services in underserved areas. It may shift funding to physicians who serve fewer low-income patients than is the case under current law.

-- END --

SENATE COMMITTEE ON HEALTH

Senator Ed Hernandez, O.D., Chair

BILL NO: AB 148

SUBJECT: California Physician Corps Program: practice setting

SUMMARY:

Expands eligibility for the California Physician Corps Program in rural areas by revising the definition of “practice setting” to include a clinic that has at least 30% of patients in rural areas; and, a physician owned and operated medical practice setting that provides primary care located in a medically underserved area and has at least 30% of patients in rural areas.

Existing law:

1. Establishes the Health Professions Education Foundation (HPEF) within the Office of Statewide Health Planning and Development (OSHPD) to, among other functions, develop criteria for evaluating applicants for various scholarships and loans.
2. Establishes the California Physician Corps Program, which consists of the Stephen M. Thompson Loan Repayment Program (STLRP) and the Physician Volunteer Program, administered by HPEF. Requires the California Physician Corps Program to provide financial incentives, as specified, to applicants who possess a current valid medical or osteopathic license who practice in medically underserved communities, as specified.
3. Defines medically underserved area (MUA) as consistent with the federal definition of a Health Professional Shortage Area (HPSA) or an area of the state where unmet priority needs for physicians exist as determined by the California Healthcare Workforce Policy Commission.
4. Defines medically underserved populations (MUP) as those covered under the Medi-Cal and Healthy Families programs and the uninsured.
5. Defines “practice setting,” for the purposes of eligibility for the California Physician Corps Program as either:
6. A community clinic, 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 safety net role, as specified, which is located in a MUA and at least 50% of whose patients are from a MUP; or,
7. A physician owned and operated medical practice setting that provides primary care located in a MUA and has a minimum of 50% of patients who are uninsured, Medi-Cal beneficiaries, or beneficiaries of another publicly funded program that serves patients who earn less than 250% of the federal poverty level (FPL).

This bill: Expands eligibility for the California Physician Corps Program in rural areas, beginning January 1, 2018, by revising the definition of “practice setting,” to include a clinic that has at least 30% of patients, if the area is rural, or at least 50% of patients, if the area is urban; and, a physician owned and operated medical practice setting that provides primary care located in a medically underserved area and has at least 30% of patients, if the area is rural, or at least 50% of patients, if the area is urban.

FISCAL EFFECT:

According to the Assembly Appropriations Committee analysis:

1. Minor and absorbable one-time costs to modify program regulations and forms (Medically Underserved Account for Physicians).
2. Potential minor increase in program administrative costs by increasing the number of applicants requiring technical assistance (Medically Underserved Account for Physicians).

This bill changes the potential distribution of the awards by broadening the eligibility

threshold, but does not increase the number of awards or funds available. Demand for the

program already exceeds supply, prior to the relaxation of standards proposed.

PRIOR VOTES:

COMMENTS:

1. Author’s statement. According to the author, rural areas regularly struggle to incentivize quality surgeons and physicians to take up residency. This has created a void within rural areas, in terms of physician and surgeon retention, which ultimately harms many low-income regions. This measure is designed to give rural areas a greater chance to obtain the benefits of the STLRP, and as such incentivize quality health care throughout disadvantaged regions.
2. Background. California is home to the largest number of primary care physicians and nurse practitioner in the country. However, the state ranks 23rd in the number of primary care physicians per resident. An August 2014 report by the California HealthCare Foundation states that California has only 35 to 49 primary care physicians per 100,000 Medi-Cal enrollees. Federal guidelines call for the state to have 60 to 80 doctors per 100,000 patients. The supply of primary care physicians also varies substantially across California’s counties. The number of primary care physicians actively practicing in California counties is, in too many cases, at the bottom range of, or below, the state's need. According to 2011 Health Resources and Services Administration (HRSA) data, 29 of California’s 58 counties fall at the lower end, or below, the needed supply range for primary care physicians. In other words, half of Californians live in a community where they do not have adequate access to the health care services they need.
3. HPSAs. HPSAs are designated by HRSA as having shortages of primary medical care, dental or mental health providers and may be geographic (a county or service area), demographic (low income population), or institutional (comprehensive health center, federally qualified health center, or other public facility). MUAs/MUPs are areas or populations designated by HRSA as having: too few primary care providers, high infant mortality, high poverty, and/or high elderly populations
4. California Physician Corps Program. The California Physician Corps Program consists of two programs: the Volunteer Physicians Program and STLRP. According to OSHPD, the Volunteer Physicians Program has never been implemented. STLRP encourages recently licensed physicians to practice in HPSAs in California. The program repays up to $105,000 in educational loans in exchange for full-time service for at least three years. To be considered eligible for an award, applicants must:
5. Be an allopathic or osteopathic physician;
6. Be free of any contractual service obligations (i.e. the National Health Service Corps Federal Loan Repayment Program or other financial incentive programs);
7. Have outstanding educational debt from a government or commercial lending institution;
8. Have a valid, unrestricted license to practice medicine in California;
9. Be employed or have accepted employment in a HPSA in California; and,
10. Commit to providing full-time direct patient care in a HPSA.
11. 2016 STLRP Report to the Legislature. In April 2016, OSHPD released a report that included data on STLRP awards funded through a three-year California Endowment's $21.4 million grant, the Medical Board of California and Osteopathic Medical Board of California licensure fees, and the Managed Care Administrative Fines and Penalties (MCAFP) Fund. During the last two application cycles a total of 230 applications were received and 107 recipients were awarded a total of $10.3 million. The balance of the MUAP for FY 2015-16 year-end is $4.6 million. OSHPD received 405 completed applications for the 2016-17 cycle of the STLRP.
    
    Of 107 recipients in 2016, 50 worked in HPSAs; 44 worked in a primary care shortage area; 67 came from an economically disadvantaged background; and, 88 spoke at least one of the Medi-Cal threshold languages. STLRP recipients by county of employment from July 1, 2014, to November 30, 2015, are as follows: Alameda (5), Contra Costa (2), Fresno (4), Humboldt (2), Kern (1), Los Angeles (29), Madera (7), Merced (2), Monterey (2), Napa (2), Orange (7), Riverside (6), Sacramento (3), San Bernardino (1), San Diego (15), San Luis Obispo (1), Santa Clara (3), Santa Cruz (2), Shasta (1), Tulare (2), and Ventura (10).
    
12. Geographic distribution of STLRP awards. The tables below show the areas of the state where current STLRP awarded providers are practicing.  Please note; there is some overlap for some facilities as they counted for two categories. For example, Ventura County Behavioral Health is counted as urban and southern. It is an urban facility, but is also located in Southern California. Of the total awards granted in fiscal year 2014-15, 10% were awarded to providers in a rural practice setting. Of the total awards granted in FY 2015-16 the number rose slightly to 12%.

1. Prior legislation. AB 565 (Salas, Chapter 378, Statutes of 2013) revises the definition of a practice setting for purposes of the STLRP to include a physician owned and operated medical practice setting that provides primary care located in an MUA.

SB 20 (Hernandez, Chapter 24, Statutes of 2014) requires, beginning on the date that the California Major Risk Medical Insurance Program (MRMIP) becomes inoperative, all the funds in the Managed Care Administrative Fines and Penalties Fund (MCAFP Fund) to be transferred each year to the Medically Underserved Account for Physicians in the Health Professions Education Fund for use by STLRP.

AB 860 (Perea and Bocanegra) appropriates $600,000 from the MCAFP Fund to the Steven Thompson Medical School Scholarship Program within HPEF. AB 860 is pending in Assembly Appropriations Committee. AB 860 was held on suspense in the Assembly Appropriations Committee.

AB 1176 (Bocanegra and Bonta) establishes the Medical Residency Training Program within OSHPD to fund graduate medical education residency programs in California, as specified. AB 1176 was held on suspense in the Assembly Appropriations Committee.

SB 635 (Hernandez of 2012) was substantially similar to SB 20, but would have instead transferred the MCAFP funds to a newly created Song-Brown Program Account, which supports training for health care professionals. SB 635 was held on suspense in the Assembly Appropriations Committee.

SB 606 (Ducheny, Chapter 600, Statutes of 2009) requires the Osteopathic Medical Board of California to assess an additional $25 fee to an osteopathic physician and surgeon applying for initial or reciprocity licensure, or for a biennial renewal license. Requires the funds collected to be transferred to the MUAP for STLRP and permits osteopathic physicians to be eligible to apply for the program.

SB 1379 (Ducheny, Chapter 607, Statutes of 2008) requires fines and administrative penalties levied against health plans under the Knox-Keene Act to be placed in the MCAFP Fund and used, upon appropriation by the Legislature, for a physician loan-repayment program and MRMIP. Requires DMHC to make a one-time transfer of fine and administrative penalty revenue of $10 million to MRMIP and $1 million to the loan repayment program. Prohibits using the fines and administrative penalties authorized by the Knox-Keene Act to reduce assessments on health plans.

AB 2439 (De La Torre, Chapter 640, Statutes of 2008) mandates the Medical Board of California assess a $25 fee to applicants for issuance or renewal of a physician and surgeon's license. Requires up to 15% of the funds collected be dedicated to loan assistance for physicians and surgeons who agree to practice in geriatric care settings or settings that primarily serve adults over the age of 65 or adults with disabilities.

AB 1403 (Nuñez, Chapter 367, Statutes of 2004) renames the California Physician Corps Loan Repayment Program as STLRP effective January 1, 2005.

AB 982 (Firebaugh, Chapter 1131, Statutes of 2002) establishes the California Physician Corps Loan Repayment Program within the Medical Board of California.

1. Support. The Rural County Representatives of California (RCRC) states that access to high quality health care in rural areas is dependent upon an adequate supply of health care providers. RCRC notes that loan repayment programs are a great way to attract high quality physicians with diverse qualifications to medically underserved regions. The California Hospital Association and the California Medical Association state that they support increasing access to care in rural and medically underserved urban settings and this bill has the potential to expand the number of practice settings eligible for this program, increasing patient access.
2. Amendments. The author has agreed to amend this bill to:
   1. Sunset this bill’s provision on January 1, 2020;
   2. Require OSHPD to conduct a study on the impact this bill has on loan repayment awarded under the STLRP;
   3. Provide a definition of “rural” for purposes of loan repayment under this bill; and,
   4. Make other technical changes, including clarifying that the 50% threshold applies to all other areas besides rural areas in the state.

SUPPORT AND OPPOSITION:

Support: Adventist Health

Alliance of Catholic Health Care

Association of California Healthcare Districts

California Chapters of the American College of Physicians

California Commission on Aging

California Hospital Association

California Medical Association

Loma Linda University Health

Rural County Representatives of California

Tenet Healthcare

Oppose: None received

-- END --

SENATE COMMITTEE ON HEALTH

Senator Ed Hernandez, O.D., Chair

BILL NO: AB 148

SUBJECT: California Physician Corps Program: practice setting

SUMMARY:

Expands eligibility for the California Physician Corps Program in rural areas by revising the definition of “practice setting” to include a clinic that has at least 30% of patients in rural areas; and, a physician owned and operated medical practice setting that provides primary care located in a medically underserved area and has at least 30% of patients in rural areas.

Existing law:

1. Establishes the Health Professions Education Foundation (HPEF) within the Office of Statewide Health Planning and Development (OSHPD) to, among other functions, develop criteria for evaluating applicants for various scholarships and loans.
2. Establishes the California Physician Corps Program, which consists of the Stephen M. Thompson Loan Repayment Program (STLRP) and the Physician Volunteer Program, administered by HPEF. Requires the California Physician Corps Program to provide financial incentives, as specified, to applicants who possess a current valid medical or osteopathic license who practice in medically underserved communities, as specified.
3. Defines medically underserved area (MUA) as consistent with the federal definition of a Health Professional Shortage Area (HPSA) or an area of the state where unmet priority needs for physicians exist as determined by the California Healthcare Workforce Policy Commission.
4. Defines medically underserved populations (MUP) as those covered under the Medi-Cal and Healthy Families programs and the uninsured.
5. Defines “practice setting,” for the purposes of eligibility for the California Physician Corps Program as either:
6. A community clinic, 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 safety net role, as specified, which is located in a MUA and at least 50% of whose patients are from a MUP; and,
7. A physician owned and operated medical practice setting that provides primary care located in a MUA and has a minimum of 50% of patients who are uninsured, Medi-Cal beneficiaries, or beneficiaries of another publicly funded program that serves patients who earn less than 250% of the federal poverty level (FPL).

This bill:

Expands eligibility for the California Physician Corps Program in rural areas, beginning January 1, 2018, by revising the definition of “practice setting,” to include a clinic that has at least 30% of patients, if the area is rural; and, a physician owned and operated medical practice setting that provides primary care located in a medically underserved area and has at least 30% of patients, if the area is rural.

FISCAL EFFECT:

According to the Assembly Appropriations Committee analysis:

• Minor and absorbable one-time costs to modify program regulations and forms (Medically Underserved Account for Physicians).
• Potential minor increase in program administrative costs by increasing the number of applicants requiring technical assistance (Medically Underserved Account for Physicians).

This bill changes the potential distribution of the awards by broadening the eligibility

threshold, but does not increase the number of awards or funds available. Demand for the

program already exceeds supply, prior to the relaxation of standards proposed.

PRIOR VOTES:

COMMENTS:

1. Author’s statement. According to the author, rural areas regularly struggle to incentivize quality surgeons and physicians to take up residency. This has created a void within rural areas, in terms of physician and surgeon retention, which ultimately harms many low-income regions. This measure is designed to give rural areas a greater chance to obtain the benefits of the Steven M. Thompson Loan Repayment Program, and as such incentivize quality health care throughout disadvantaged regions.
2. Background. California is home to the largest number of primary care physicians and nurse practitioner in the country. However, the state ranks 23rd in the number of primary care physicians per resident. An August 2014 report by the California HealthCare Foundation states that California has only 35 to 49 primary care physicians per 100,000 Medi-Cal enrollees. Federal guidelines call for the state to have 60 to 80 doctors per 100,000 patients. The supply of primary care physicians also varies substantially across California’s counties. The number of primary care physicians actively practicing in California counties is, in too many cases, at the bottom range of, or below, the state's need. According to 2011 Health Resources and Services Administration (HRSA) data, 29 of California’s 58 counties fall at the lower end, or below, the needed supply range for primary care physicians. In other words, half of Californians live in a community where they do not have adequate access to the health care services they need.
3. HPSAs. HPSAs are designated by HRSA as having shortages of primary medical care, dental or mental health providers and may be geographic (a county or service area), demographic (low income population), or institutional (comprehensive health center, federally qualified health center, or other public facility). MUAs/MUPs are areas or populations designated by HRSA as having: too few primary care providers, high infant mortality, high poverty, and/or high elderly populations
4. California Physician Corps Program. The California Physician Corps Program consists of two programs: the Volunteer Physicians Program and STLRP. According to OSHPD, the Volunteer Physicians Program has never been implemented. STLRP encourages recently licensed physicians to practice in HPSAs in California. The program repays up to $105,000 in educational loans in exchange for full-time service for at least three years. To be considered eligible for an award, applicants must:
5. Be an allopathic or osteopathic physician;
6. Be free of any contractual service obligations (i.e. the National Health Service Corps Federal Loan Repayment Program or other financial incentive programs);
7. Have outstanding educational debt from a government or commercial lending institution;
8. Have a valid, unrestricted license to practice medicine in California;
9. Be employed or have accepted employment in a HPSA in California; and,
10. Commit to providing full-time direct patient care in a HPSA.
11. 2016 STLRP Report to the Legislature. In April 2016, OSHPD released a report that included data on STLRP awards funded through a three-year California Endowment's $21.4 million grant, the Medical Board of California and Osteopathic Medical Board of California licensure fees, and the Managed Care Administrative Fines and Penalties (MCAFP) Fund. During the last two application cycles a total of 230 applications were received and 107 recipients were awarded a total of $10.3 million. The balance of the MUAP for FY 2015-16 year-end is $4.6 million. OSHPD received 405 completed applications for the 2016-17 cycle of the STLRP.
    
    Of 107 recipients in 2016, 50 worked in HPSAs; 44 worked in a primary care shortage area; 67 came from an economically disadvantaged background; and, 88 spoke at least one of the Medi-Cal threshold languages. STLRP recipients by county of employment from July 1, 2014, to November 30, 2015, are as follows: Alameda (5), Contra Costa (2), Fresno (4), Humboldt (2), Kern (1), Los Angeles (29), Madera (7), Merced (2), Monterey (2), Napa (2), Orange (7), Riverside (6), Sacramento (3), San Bernardino (1), San Diego (15), San Luis Obispo (1), Santa Clara (3), Santa Cruz (2), Shasta (1), Tulare (2), and Ventura (10).
    
12. Geographic distribution of STLRP awards. The tables below show the areas of the state where current STLRP awarded providers are practicing.  Please note; there is some overlap for some facilities as they counted for two categories. For example, Ventura County Behavioral Health is counted as urban and southern. It is an urban facility, but is also located in Southern California. Of the total awards granted in fiscal year 2014-15, 10% were awarded to providers in a rural practice setting. Of the total awards granted in FY 2015-16 the number rose slightly to 12%.

1. Prior legislation. AB 565 (Salas, Chapter 378, Statutes of 2013) revises the definition of a practice setting for purposes of the STLRP to include a physician owned and operated medical practice setting that provides primary care located in an MUA.

SB 20 (Hernandez, Chapter 24, Statutes of 2014) requires, beginning on the date that the California Major Risk Medical Insurance Program (MRMIP) becomes inoperative, all the funds in the Managed Care Administrative Fines and Penalties Fund (MCAFP Fund) to be transferred each year to the Medically Underserved Account for Physicians in the Health Professions Education Fund for use by STLRP.

AB 860 (Perea and Bocanegra) appropriates $600,000 from the MCAFP Fund to the Steven Thompson Medical School Scholarship Program within HPEF. AB 860 is pending in Assembly Appropriations Committee. AB 860 was held on suspense in the Assembly Appropriations Committee.

AB 1176 (Bocanegra and Bonta) establishes the Medical Residency Training Program within OSHPD to fund graduate medical education residency programs in California, as specified. AB 1176 was held on suspense in the Assembly Appropriations Committee.

SB 635 (Hernandez of 2012) was substantially similar to SB 20, but would have instead transferred the MCAFP funds to a newly created Song-Brown Program Account, which supports training for health care professionals. SB 635 was held on suspense in the Assembly Appropriations Committee.

SB 606 (Ducheny, Chapter 600, Statutes of 2009) requires the Osteopathic Medical Board of California to assess an additional $25 fee to an osteopathic physician and surgeon applying for initial or reciprocity licensure, or for a biennial renewal license. Requires the funds collected to be transferred to the MUAP for STLRP and permits osteopathic physicians to be eligible to apply for the program.

SB 1379 (Ducheny, Chapter 607, Statutes of 2008) requires fines and administrative penalties levied against health plans under the Knox-Keene Act to be placed in the MCAFP Fund and used, upon appropriation by the Legislature, for a physician loan-repayment program and MRMIP. Requires DMHC to make a one-time transfer of fine and administrative penalty revenue of $10 million to MRMIP and $1 million to the loan repayment program. Prohibits using the fines and administrative penalties authorized by the Knox-Keene Act to reduce assessments on health plans.

AB 2439 (De La Torre, Chapter 640, Statutes of 2008) mandates the Medical Board of California assess a $25 fee to applicants for issuance or renewal of a physician and surgeon's license. Requires up to 15% of the funds collected be dedicated to loan assistance for physicians and surgeons who agree to practice in geriatric care settings or settings that primarily serve adults over the age of 65 or adults with disabilities.

AB 1403 (Nuñez, Chapter 367, Statutes of 2004) renames the California Physician Corps Loan Repayment Program as STLRP effective January 1, 2005.

AB 982 (Firebaugh, Chapter 1131, Statutes of 2002) establishes the California Physician Corps Loan Repayment Program within the Medical Board of California.

1. Support. The Rural County Representatives of California (RCRC) states that access to high quality health care in rural areas is dependent upon an adequate supply of health care providers. RCRC notes that loan repayment programs are a great way to attract high quality physicians with diverse qualifications to medically underserved regions. The California Hospital Association and the California Medical Association state that they support increasing access to care in rural and medically underserved urban settings and this bill has the potential to expand the number of practice settings eligible for this program, increasing patient access.
2. Amendments. This bill should be amended to clarify the definition of “rural area” for purposes of this bill as follows:

On page 3, line 14, after “(i)” insert: “Rural” means a Medical Service Study Area with a population density of less than 250 persons per square mile where no population center exceeds 50,000.  

SUPPORT AND OPPOSITION:

Support: Adventist Health

Association of California Healthcare Districts

California Chapters of the American College of Physicians

California Hospital Association

California Medical Association

Loma Linda University Health

Rural County Representatives of California

Tenet Healthcare

Oppose: None received

-- END --

Date of Hearing: April 5, 2017

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 148

Author:(Mathis) – As Amended Ver:March 27, 2017

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

SUMMARY:

This bill relaxes the eligibility standard for community clinics and physician offices applying to the California Physician Corps Program, by allowing such practice settings to participate in the program if 30% of their patient population qualifies as medically underserved (as opposed to 50% under current law).

FISCAL EFFECT:

1. Minor and absorbable one-time costs to modify program regulations and forms (Medically Underserved Account for Physicians).
2. Potential minor increase in program administrative costs by increasing the number of applicants requiring technical assistance (Medically Underserved Account for Physicians). This bill changes the potential distribution of the awards by broadening the eligibility threshold, but does not increase the number of awards or funds available. Demand for the program already exceeds supply, prior to the relaxation of standards proposed.

COMMENTS:

1. Purpose. This bill attempts to encourage a greater number of rural applicants by relaxing the standards for participation in the California Physician Corps Program, which includes the Physician Volunteer Program and the Steven M. Thompson Loan Repayment Program.
2. Background. The Loan Repayment Program was established in 2003 to increase access to health care and promote the retention of primary care physicians in medically underserved areas of California. It provides physicians and surgeons up to $105,000 in exchange for providing direct patient care in a medically underserved area for a minimum of three years. In 2015, the administration of the program was transferred from the Medical Board of California to the Health Professions Education Foundation within the Office of Statewide Health Planning and Development.
3. Funding. The Loan Repayment Program receives ongoing funding from two sources. The Managed Care Administrative Fines and Penalties Fund (which holds revenues from fines and penalty assessments on health care service plans) provides $1 million per year, pursuant to availability of funds. A $25 additional fee on license renewal for physicians and doctors of osteopathy, as well as voluntary contributions, provides about $2 million per year. In 2013, the California Endowment also made a major investment in the program with a three-year, $21.4 million grant, but those funds will have been spent by the time this bill takes effect. The 2016-17 Budget Act appropriated $33.3 million for primary care workforce programs—the first year of a planned three-year, $100 million primary care workforce investment, of which $1 million of which was set aside for loan repayment. These funds were not spent; the Governor's January 2017 budget proposes to revert these unspent funds, along with other legislative augmentations, in order to balance the budget.

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

Date of Hearing: March 21, 2017

ASSEMBLY COMMITTEE ON HEALTH

Jim Wood, Chair

ABPCA Bill Id:AB 148

Author:(Mathis) – As Introduced Ver:January 10, 2017

SUBJECT: California Physician Corps Program: practice setting.

SUMMARY: Revises the definition of "practice setting" for purposes of eligibility under the California Physician Corps Program to include clinics or physician-owned and operated medical practice settings in rural areas, if at least 30% of patients are uninsured, Medi-Cal beneficiaries, or beneficiaries of another publicly funded program that serves patients who earn less than 250% of the federal poverty level.

EXISTING LAW:

1. Establishes the Health Professions Education Foundation (HPEF) within the Office of Statewide Health Planning and Development (OSHPD) to develop criteria for evaluating applicants for various scholarships and loan programs. Establishes within HPEF, the California Physician Corps Program, which consists of the Steven M. Thompson Physician Corps Loan Repayment Program (STLRP) and the Physician Volunteer Program.
2. Establishes the Health Professions Education Fund (Fund), and the Medically Underserved Account for Physicians (MUAP) within the Fund, the primary purpose of which is being to provide funding for the operations of the STLRP. Allows HPEF to seek and receive matching funds from foundations and private sources to be placed in the MUAP.
3. Requires STLRP to provide financial incentives to applicants who possess a current valid medical or osteopathic license who practice in medically underserved areas (MUAs). Allows up to 20% of the available positions to be awarded to applicants from specialties outside of primary care and requires up to 15% of funds to be dedicated to loan assistance for physician and surgeons who agree to practice in geriatric settings.
4. Defines an MUA as a federal health professional shortage area (HPSA) or an area of the state where unmet priority needs for physicians exist as determined by the California Healthcare Workforce Policy Commission. Indicates that HPSAs are designations that indicate health care provider shortages in primary care, dental health, or mental health and these shortages may be geographic-, population-, or facility-based.
5. Defines medically underserved population (MUP) as the Medi-Cal program, Healthy Families Program, and uninsured populations.
6. Defines practice setting for purposes of the STLRP as either:
   1. A community clinic as defined, 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 to serve indigent population, which is located in a MUA and at least 50% of whose patients are from a MUP; or,
   2. A physician owned and operated medical practice located in a MUA and at least 50% of whose patients are from a MUP.

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

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, rural areas regularly struggle to incentivize quality surgeons and physicians to take up residency and this has created a void within rural areas, in terms of physician and surgeon retention, which ultimately harms many low-income regions. The author states that this bill is designed to give rural areas a greater chance to obtain the benefits of the STLRP, and as such incentivize quality health care throughout disadvantaged regions.
2. BACKGROUND. The HPEF is a state non-profit established in 1987. HPEF has awarded more than 12,882 scholarships and loan repayments totaling more than $146.7 million to California health professionals serving in all 58 counties in areas of unmet need.
   
   1. STLRP. STLRP was established in 2003 to increase access to healthcare and promote the retention of primary care physicians in MUAs. The program is counseled by an advisory committee of seven members, with two members recommended by the California Medical Association. Physicians and surgeons can receive up to $105,000 every year in exchange for providing direct patient care in a MUA for a minimum of three years. To be considered for an award, an applicant must:
      
      1. Be an allopathic or osteopathic physician or surgeon;
      2. Be free of any contractual service obligations (i.e. the National Health Service Corps Federal Loan Repayment Program or other financial incentive programs);
      3. Have outstanding educational debt from a government or commercial lending institution;
      4. Have a valid, unrestricted license to practice medicine in California;
      5. Be currently employed or have accepted employment in an HPSA or Primary Care Shortage Area (PCSA) in California; and,
      6. Commit to providing full-time medical services in a HPSA or PCSA for a minimum of three years.
   2. Rural California. Rural areas are defined as a Medical Service Study Area (MSSA) with a population density of less than 250 persons per square mile where no population center exceeds 50,000.   MSSAs are sub-city and sub-county geographical units used to organize and display population, demographic and physician data. MSSAs were developed in 1976 by the California Healthcare Workforce Policy Commission (formerly California Health Manpower Policy Commission) to respond to legislative mandates requiring it to determine "areas of unmet priority need for primary care family physicians" (Song-Brown Act of 1973) and "geographical rural areas where unmet priority need for medical services exist" (Garamendi Rural Health Services Act of 1976). MSSAs are recognized by the U.S. Health Resources and Services Administration, Bureau of Health Professions' Office of Shortage Designation as rational service areas for purposes of designating HPSAs, and MUAs and MUPs.
   3. 2016 STLRP Report to the Legislature. This report covers the period of July 1, 2014, through November 30, 2015, for the purpose of including the second year of the California Endowment's three-year $21.4 million total grant for STLRP. The report also includes data on STLRP recipients awarded during this period that were funded by the Medical Board of California and Osteopathic Medical Board of California licensure fees, and the Managed Care Administrative Fines and Penalties (MCAFP) Fund, which is administered by the Department of Managed Health Care (DMHC). In late 2013 the California Endowment awarded $78.2 million in grants to numerous California organizations to increase and diversify California’s heath care workforce, some of which went to the STLRP to fund primary care physicians providing direct patient care.
      
      Of the 107 recipients in 2016; 50 worked in HPSAs; 44 worked in a primary care shortage area (areas with shortages of family physicians, nurse practitioners, and physicians assistants); 67 came from an economically disadvantaged background; and, 88 spoke at least one of the Medi-Cal threshold languages. STLRP recipients by county of employment from July 1, 2014, to November 30, 2015, are as follows:

Alameda (5), Contra Costa (2), Fresno (4), Humboldt (2), Kern (1), Los Angeles (29), Madera (7), Merced (2), Monterey (2), Napa (2), Orange (7), Riverside (6), Sacramento (3), San Bernardino (1), San Diego (15), San Luis Obispo (1), Santa Clara (3), Santa Cruz (2), Shasta (1), Tulare (2), and Ventura (10).

During the last two application cycles a total of 230 applications were received and 107 recipients were awarded a total of $10.3 million. The balance of the MUAP for fiscal year (FY) 2015-16 year-end is $4.6 million. OSHPD received 405 completed applications for the 2016-17 cycle of the STLRP, obviously many more than can be funded.

• 1. Geographic distribution of STLRP awards. The tables below show the areas of the state where current STLRP awarded providers are practicing as of June 30^th for FY 2014-15 and June 30^th for FY 2015-16.  Please note; there is some overlap for some facilities as they counted for two categories. For example, Ventura County Behavioral Health is counted as urban and southern. It is an urban facility, but is also located in Southern California.

Of the total awards granted in fiscal year 2014-15, 10% were awarded to providers in a rural practice setting. Of the total awards granted in FY 2015-16 the number rose slightly to 12%.

1. SUPPORT. The Rural County Representatives of California (RCRC) states that access to high quality health care in rural areas is dependent upon an adequate supply of health care providers. RCRC notes that loan repayment programs are a great way to attract high quality physicians with diverse qualifications to medically underserved regions.
   
   The California Hospital Association and the California Medical Association state that they support increasing access to care in rural and medically underserved urban settings and this bill has the potential to expand the number of practice settings eligible for this program, increasing patient access.
2. PREVIOUS LEGISLATION.
   1. AB 565 (Salas), Chapter 378, Statutes of 2013, revised the definition of a practice setting for purposes of the STLRP to include a physician owned and operated medical practice setting that provides primary care located in an MUA.
   2. SB 20 (Hernandez), Chapter 24, Statutes of 2014, requires, beginning on the date that the Major Risk Medical Insurance Program (MRMIP) becomes inoperative, all the funds in the MCAFP Fund to be transferred each year to the MUAP Fund for use by the STLRP.
   3. AB 860 (Perea and Bocanegra) of 2013 would have provided, beginning January 1, 2014, if the MCAFP Fund has $2 million or more, no less than $1 million shall be transferred to the STLRP Account. AB 860 was held in Assembly Appropriations.
   4. AB 1176 (Bocanegra and Bonta) of 2013 would have established the Medical Residency Training Program within OSHPD to fund graduate medical education residency programs in California. AB 1176 was held in Assembly Appropriations.
   5. SB 635 (Hernandez) of 2012 was substantially similar to SB 20, but would have instead transferred the MCAFP funds to a newly created Song-Brown Program Account, which would have supported training for health care professionals. SB 635 was held on suspense in the Assembly Appropriations Committee.
   6. SB 606 (Ducheny), Chapter 600, Statutes of 2009, requires the Osteopathic Medical Board of California to assess an additional $25 fee to an osteopathic physician and surgeon applying for initial or reciprocity licensure, or for a biennial renewal license. Requires the funds collected to be transferred to the MUA for Physicians for STLRP. Allows osteopathic physicians and surgeons to be eligible to apply for the STLRP.
   7. SB 1379 (Ducheny), Chapter 607, Statutes of 2008, requires fines and administrative penalties levied against health plans under the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene Act) to be placed in the MCAFP Fund and used, upon appropriation by the Legislature, for a physician loan-repayment program and MRMIP. Requires DMHC to make a one-time transfer of fine and administrative penalty revenue of $10 million to MRMIP and $1 million to the loan repayment program. Prohibits using the fines and administrative penalties authorized by the Knox-Keene Act to reduce assessments on health plans.
   8. AB 2439 (De La Torre), Chapter 640, Statutes of 2008, mandates the Medical Board of California assess to a $25 fee to applicants for issuance or renewal of a physician and surgeon's license. Provides that up to 15% of the funds collected be dedicated to loan assistance for physicians and surgeons who agree to practice in geriatric care settings or settings that primarily serve adults over the age of 65 or adults with disabilities.
   9. AB 1403 (Nuñez), Chapter 367, Statutes of 2004, renamed the California Physician Corps Loan Repayment Program as the STLRP effective January 1, 2005.
   10. AB 982 (Firebaugh), Chapter 1131, Statutes of 2002, established the California Physician Corps Loan Repayment Program within the Medical Board of California.

REGISTERED SUPPORT / OPPOSITION:

Support

California Hospital Association
California Medical Association
Rural County Representatives of California
Tenet Healthcare

Opposition

None on file.

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