SENATE COMMITTEE ON

Senator Anthony Portantino, Chair

2019 - 2020 Regular Session

AB 565 (Maienschein) - Public health workforce planning: loan forgiveness, loan repayment, and scholarship programs

Bill Summary:

Assembly Bill 565 would expand the definition of “practice setting” to include a program or facility operated by, or contracted to, a county mental health plan, for the Steven M. Thompson Physician Corps Loan repayment Program (STLRP). Would require 20 percent of the STLRP scholarships awards go to program applicants who practice specialties outside of a primary specialty, under specified conditions. Would require the Office of Statewide Health Planning and Development (OSHPD) to include in its five-year Workforce Education and Training (WET) plan, expansion plans for loan forgiveness and scholarship programs for employment in the public mental health system.

Fiscal Impact:

According to OSHPD, the bill has an unknown, indeterminable fiscal impact. By expanding the definition of “practice setting” and allowing more practice sites and physicians to qualify for financial incentives, the bill would create new workload to handle the expected, but unquantifiable increase in applications. The current level of resources dedicated to STLRP cannot absorb additional workload. Staff notes by expanding the definition of “practice setting,” the bill broadens the pool of applicant eligibility but does not increase funding available for scholarship in the long-term, and would create cost pressures of over $150,000 (special fund). Currently, demand for the STLRP program exceeds supply.

Background:

According to OSHPD, the STLRP encourages recently licensed physicians to practice in health professions shortage areas (HPSAs), as defined, 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: be an allopathic or osteopathic physician; be free of any contractual service obligations; have outstanding educational debt from specified lending institutions; have a valid, unrestricted license to practice medicine in California; be employed or have accepted employment in a HPSA-Primary Care or Primary Care Shortage Area (PCSA) in California; and, can commit to providing full-time direct patient care in a HPSA-Primary Care or PCSA. Prioritization is granted for applicants who meet patients’ cultural and linguistic needs, are from an economically disadvantaged background, and have experience working in, and for, a medically underserved areas.

Current law authorizes up to 20 percent of the available STLRP funds may be awarded to program applicants from specialties outside of the primary care specialties, including psychiatry. In the 2017-18 award cycle, of 44 total grant recipients, only three were psychiatrists, and five went to other specialties, including emergency medicine.

Proposed Law:

The bill includes the following provisions:

• Expands the definition of “practice setting” to include a program or facility operated by, or contracted to, a county mental health plan.
• Requires the OSHPD to include in their five-year WET plan, expansion plans for loan forgiveness and scholarship programs offered in return for a commitment to employment in California’s public mental health system.

Related Legislation:

1. The Legislature has contemplated several measures related to workforce education and training and loan forgiveness programs, including:

• SB 539 (Caballero, 2019) would have created the Mental Health Services Workforce Education and Training Account and a continuous appropriation for the WET five-year plan. The bill was held on the Senate Appropriations Committee suspense file.
• AB 1619 (Weber, 2019) would have appropriated $20 million General Fund to OSHPD to increase available grant moneys for the Mental Health Loan Assumption Program (MHLAP). AB 1619 was held on the Assembly Appropriations Committee suspense file.
• AB 2018 (Maienschein, 2018) was substantially similar to this bill. AB 2018 was held on the Senate Appropriations Committee suspense file.
• AB 2143 (Caballero, 2018) would have added physician assistants (PA) in a psychiatric mental health setting and nurse practitioners (NP) to those eligible for loan repayment grants under the Licensed Mental Health Service Provider Education Program. Governor Brown vetoed the bill, stating that PAs and NPs are already eligible for educational loan repayment grants, as specified.
• AB 2539 (Mathis, 2018) and AB 148 (Mathis, 2017) would have changed the definition of “practice setting” for purposes of applying to participate in the STLRP to include practice settings in rural areas with at least 30% of patients who are uninsured, Medi-Cal beneficiaries, or beneficiaries of another publicly funded program. AB 2539 and AB 148 were held on the Senate Appropriations Committee suspense file.

Staff Comments:

1. Assembly Bill 74 (Budget Committee), the 2019-20 budget bill, includes $50 million in one-time General Fund appropriation to expand the mental health workforce across the entire health system. Specifically, $46.3 million GF for Mental Health Workforce Development; $1 million GF for scholarships for former foster youth; and $2.7 million GF for psychiatry fellowships. OSHPD was approved for multi-year appropriation authority of $50 million GF, starting in budget year through 2025-26, to support its WET mental health workforce development programs. The bill is at the Governor’s Desk.

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SENATE COMMITTEE ON HEALTH

Senator Dr. Richard Pan, Chair

BILL NO: AB 565

SUBJECT: Public health workforce planning: loan forgiveness, loan repayment, and scholarship programs

SUMMARY:

Expands the definition of “practice setting” for purposes of the Steven M. Thompson Physician Corps Loan Repayment Program (STLRP) to include a program or facility operated by, or contracted to, a county mental health plan. Requires 20% of the available STLRP scholarships to be awarded to applicants in certain practice specialties, as specified.

Existing law:

1. Creates the STLRP within the Health Professions Education Fund (HPEF), administered by the Office of Statewide Health Planning and Development (OSHPD), which provides for the repayment of educational loans for physicians and surgeons who practice in medically underserved areas of the state, as defined. [HSC §128550, et seq.]
2. Creates the Medically Underserved Account for Physicians within the HPEF for the primary purpose of providing funding for the STLRP to repay loans per agreements made with physicians, including loan repayments do not exceed $105,000 per individual licensed physician and do not exceed the amount of the educational loans incurred by the physician participant. [HSC §128555]
3. Requires OSHPD and the HPEF to develop guidelines for the selection and placement of STLRP applicants with priority consideration given to applicants best suited to meet the cultural and linguistic needs of patients by meeting such criteria as speaking a Medi-Cal threshold language, being from an economically disadvantaged background, having significant training in culturally and linguistically appropriate service delivery, and agreeing to practice in a medically underserved area. [HSC §128553]
4. Defines “practice setting” as either:
5. 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, as specified, and which is located in a medically underserved area and at least 50% of the patients are from a medically underserved population; or,
6. 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. [HSC §128552]
7. Defines “medically underserved area” as a health professional shortage area (HPSA), as specified, or an area of the state where unmet priority needs for physicians exist as determined by the California Healthcare Workforce Policy Commission. Defines “medically underserved population” as the Medi-Cal Program, Healthy Families Program, and uninsured populations. [HSC §128552]
8. Requires the HPEF to report annually to the Legislature on such information that includes the number of STLRP participants, practice setting with program participants, the amount of funds expended for the STLRP, and information on annual performance reviews by the practice settings and program participants. [HSC §128557]

This bill:

1. Expands the definition of “practice setting” in existing law for purposes of the STLRP to include a program or facility operated by, or contracted to, a county mental health plan.
2. Requires 20% of the available STLRP scholarships to be awarded to program applicants who will practice specialties outside of a primary specialty if there are enough qualified applicants to meet the 20% threshold.
3. Makes technical, nonsubstantive changes.

FISCAL EFFECT:

According to the Assembly Appropriations Committee:

1. Minor and absorbable one-time administrative costs to OSHPD to modify current eligibility requirements (HPEF, Medically Underserved Account for Physicians).
2. Ongoing administrative and program cost pressure to increase funding for awards (General Fund [GF] or special funds). Expanding eligibility criteria increases pressure on a program that is already oversubscribed under current criteria. Only 44 applications were awarded in fiscal year 2017-18 of a total of 403 received.

PRIOR VOTES:

COMMENTS:

1. Author’s statement. According to the author, the shortage of psychiatrists in the U.S. has reached crisis levels, and California is suffering the fallout. In its 2017 report outlining the challenges, the National Council for Behavioral Health projected demand for psychiatry would outstrip services by 25% in 2025. As it now stands, 55% of counties in the U.S. have no psychiatrists and 77% have a severe shortage. The dynamic is evident in California, where county mental health departments labor, often in vain, to fill psychiatrist vacancies. According to state records, 23 of California’s 58 counties have fewer than one psychiatrist per 10,000 residents, while six counties have no psychiatrists at all. The shortage has created critical weaknesses in our public mental health care delivery system that counties are struggling to patch by expanding the roles of other categories of workers, such as physician assistants, nurse practitioners, and peer providers. But a lasting solution requires a more substantive fix that revitalizes the field of psychiatry. It must include a powerful incentive to steer promising students into careers in community psychiatry, ensuring our most vulnerable residents have access to quality psychiatric care.
2. Mental health in California. According to the March 2018 California Health Care Foundation (CHCF) Almanac, mental health conditions are among the most common health conditions faced by Californians: nearly one in six California adults experience mental illness of some kind, and one in 24 have a serious mental illness that makes it difficult to carry out major life activities. One in 13 children has an emotional disturbance that limits participation in daily activities. Mental health disorders encompass many diagnoses, including depression, anxiety, schizophrenia, attention deficit hyperactivity disorder, and post-traumatic stress disorder. From 2011 to 2015, slightly more than one-third of California adults with a mental illness reported receiving mental health treatment or counseling during the past year, lower than the national rate of 42.9%. Adults may often not be aware that they have a mental disorder, they may fear the stigma of mental illness, or they may encounter barriers to treatment. Even among California adults with any mental illness who sought treatment, 17% reported that they did not get it. The national rate of unmet need was higher (20%). Common barriers to accessing services include lack of health insurance, lack of available treatment providers or programs, and inability to pay for treatment.
3. Behavioral health workforce in California. The CHCF Almanac reported that in 2016 California had about 75,000 licensed mental health professionals, with marriage and family therapists (31,349) comprising the greatest share, almost double the number of licensed psychologists (16,683). This workforce does not reflect the racial and ethnic diversity of the state, and many professionals, particularly psychiatrists (5,806) and psychologists will reach retirement age within the next decade (45% of psychiatrists and 37% of psychologists are over age 60.) Per-population rates of behavioral health professionals varied by California region: the Greater Bay Area’s rates were 38% to 67% greater than the state average while the Inland Empire and San Joaquin Valley regions had rates that were 39% to 88% lower than average. The Northern and Sierra regions had rates of psychiatrists and psychologists that were at least 40% lower than average. Under the HPSA designation, areas are identified as having a shortage of primary care, dental care, or mental health providers. For mental health providers, the shortage is based on the availability of psychiatrists and other mental health professionals. Approximately 16% of Californians live in a mental health HPSA. According to OSHPD’s Web site, to qualify for designation as a mental health HPSA, an area must be a rational service area; the population-to-core mental health professional and/or the population-to-psychiatrist ratio meet established shortage criteria; and there is a lack of access to mental health care in surrounding areas because of excessive distance, overutilization, or access barriers.
4. STLRP. The STLRP was created in response to the physician shortage problem in underserved areas, but funding for this program has been unpredictable and insufficient, with demand exceeding available funding every year. According to OSHPD, the 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:
   1. Be an allopathic or osteopathic physician;
   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 employed or have accepted employment in a HPSA-Primary Care or Primary Care Shortage Area (PCSA) in California; and,
   6. Commit to providing full-time direct patient care in a HPSA-Primary Care or PCSA.

Under current law, up to 20% of the available STLRP funds may be awarded to program applicants from specialties outside of the primary care specialties, including psychiatry. According to OSHPD, in recent award cycles HPEF has not awarded up to the 20% cap to specialty physicians. In the 2017-18 award cycle, of 44 total grant recipients, only three were psychiatrists, and five went to other specialties, including emergency medicine.

1. HPEF report to the Legislature on the STLRP. According to the June 2017 report, since its inception in 2003, the STLRP has received 1,228 applications and has awarded more than $47 million and monitored the progress of 538 physicians providing direct patient care in 47 of the state’s 58 counties. Between July 1, 2015, and November 30, 2016, the STLRP received 187 applications representing 31 counties and more than $45 million of program applicant educational debt. Of the applicants, 63 were awarded grants; 92 were eligible but did not receive an award due to regulatory limits on awarded applicants with outside specialties or limited funding; and 32 were ineligible due to practice setting or part-time employment. Priority consideration is given to applicants best suited to meet the cultural and linguistic needs of patients by meeting such criteria as speaking a Medi-Cal threshold language, being from an economically disadvantaged background, having significant training in culturally and linguistically appropriate service delivery, and having three years of experience working in a medically underserved area or with a medically underserved population. Of the 63 recipients, seven worked in a HPSA; four worked in a PCSA, which have a shortage of family physicians, nurse practitioners, and physician assistants; 30 worked in both a HPSA and PCSA; four worked in a PCSA and a Federally Qualified Health Center (FQHC); 15 worked in an FQHC; one worked in a site located on tribal land; one worked in a rural health center; and one worked in a designated HPSA facility. Additionally, 47 of the recipients came from an economically disadvantaged background, and 56 spoke at least one of the Medi-Cal threshold languages.
2. Funding proposals. The Governor’s 2019-2020 budget proposes $50 million in one-time GF to expand the mental health workforce across the entire health system. OSHPD also requests multi-year appropriation authority, through a Budget Change Proposal, of $50 million GF beginning in FY 2019-20 through 2025-26, to support its Workforce Education and Training mental health workforce development programs, allowing for additional loan repayment and scholarship awards for eligible practitioners to increase the number of mental health providers throughout the state’s public mental health system. OSHPD’s loan repayment and scholarship programs historically have been overextended, and applications received far exceed funds awarded.
3. Related legislation. SB 539 (Caballero) creates the Mental Health Services Workforce Education and Training Account, as specified, to be continuously appropriated to OSHPD for the purpose of funding the Workforce Education and Training five-year plan. SB 539 was held on the Senate Appropriations Committee suspense file.

AB 1619 (Weber) appropriates $20 million from the GF to OSHPD to increase available grant moneys for students eligible to apply for Mental Health Loan Assumption Program (MHLAP) and to, among other things, attract and encourage eligible students from culturally and ethnically diverse communities. Expresses the intent of the Legislature that the total amount allocated to MHLAP from all funding sources each fiscal year be a minimum of $30 million. AB 1619 was held on the Assembly Appropriations Committee suspense file.

1. Prior legislation. AB 2018 (Maienschein of 2018) was substantially similar to this bill. AB 2018 was held on the Senate Appropriations Committee suspense file.

AB 2143 (Caballero of 2018) would have added physician assistants who work in a psychiatric mental health setting and nurse practitioners, as specified, to those eligible for educational loan repayment grants under the Licensed Mental Health Service Provider Education Program. AB 2143 was vetoed by Governor Brown who stated that physician assistants and nurse practitioners are already eligible for educational loan repayment grants under the state's Advanced Healthcare Loan Repayment Program. Unfortunately, the loan repayment fund referenced in this bill lacks the necessary funding to pay for the hundreds of applications it currently receives. Adding more applicants as this bill requires just compounds the problem.

AB 2539 (Mathis of 2018) and AB 148 (Mathis of 2017) would have changed the definition of “practice setting” for purposes of applying to participate in the STLRP to include practice settings in rural areas with at least 30% of patients who are uninsured, Medi-Cal beneficiaries, or beneficiaries of another publicly funded program. AB 2539 and AB 148 were held on the Senate Appropriations Committee suspense file.

AB 1188 (Nazarian, Chapter 557, Statutes of 2017) raises the additional biennial renewal fee, from $10 to $20, for specified licensed mental health service providers and adds licensed professional clinical counselors (LPCCs) and LPCC interns to the types of licensed mental health service providers eligible to participate in the Licensed Mental Health Education Program.

SB 1471 (Hernandez of 2016) would have required, on and after January 1, 2017, any funds over $2 million in the Managed Care Administrative Fines and Penalties Fund to annually be transferred to the Medically Underserved Account for Physicians in the HPEF, to be used for the purposes of the STLRP. SB 1471 was held on the Assembly Appropriations Committee suspense file.

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 a medically underserved area.

1. Support. The sponsors of this bill and other supporters, largely mental health care providers and advocates, state that tuition costs for medical schools are escalating at an alarming rate as students take on increasing amounts of debt, which drives career choices away from relatively lower paying psychiatric practice generally. Supporters argue that debt relief options are one way to not only recruit more psychiatric residents, but also to selectively target them towards training that prepares them to work with people with severe mental illness and in underserved settings. Supporters state that the shortage has created critical weaknesses in the public mental health care delivery system that counties are struggling to patch by expanding the roles of other categories of workers, such as physician assistants, nurse practitioners, and peer providers.
2. Oppose unless amended. The California Academy of Family Physicians (CAFP) states that this bill is problematic as primary care is facing its own shortage, and experts estimate that by 2030 California will need an extra 10,500 primary care providers to effectively treat its population. CAFP argues that carving out a specific portion of the fund for non-primary care providers runs contrary to the original intent of the STLRP and is asking that the language that requires 20% of the funding to go to non-primary care providers be removed from the bill.
3. Policy comment. This bill expands the potential pool of applicants for STLRP awards by broadening eligibility, but it does not increase the funding available for awards. While the Governor’s budget proposal includes one-time funds for OSHPD workforce development programs, demand for the STLRP program already exceeds supply, and this bill has the potential to exacerbate that problem.

SUPPORT AND OPPOSITION:

Support: California Psychiatric Association (co-sponsor)

Steinberg Institute (co-sponsor)

American Federation of State, County and Municipal Employees, AFL-CIO

California Alliance

California Chapter of the American College of Emergency Physicians

County Behavioral Health Directors Association

California Behavioral Health Planning Council

California Council of Community Behavioral Health Agencies

Kaiser Permanente

NAMI California

San Francisco Department of Public Health

Oppose: California Academy of Family Physicians (unless amended)

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Date of Hearing: April 10, 2019

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 565

Author:(Maienschein) – As Amended Ver:March 28, 2019

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

SUMMARY:

This bill changes the criteria for and distribution of awards made by an existing physician loan repayment program by:

1. Expanding eligible practice settings to include a program or facility operated by, or contracted to, a county mental health plan.
2. Requiring 20% of available awards be given to program applicants who will practice specialties outside of a primary specialty, if there are enough qualified applicants to meet that threshold. 

FISCAL EFFECT:

1. Minor and absorbable one-time administrative costs to Office of Statewide Health Planning and Development (OSHPD) to modify current eligibility requirements (Health Professions Education Fund, Medically Underserved Account for Physicians).
2. Ongoing administrative and program cost pressure to increase funding for awards (GF or special funds). Expanding eligibility criteria increases pressure on a program that is already oversubscribed under current criteria. Only 44 applications were awarded in fiscal year 2017-18 of a total of 403 received.

COMMENTS:

1. Purpose. Co-sponsored by the Steinberg Institute and the County Behavioral Health Directors Association, this bill seeks to increase the availability of loan repayment for psychiatrists who work in public mental health systems in order to help address a workforce shortage.
2. Background. The Steven M. Thompson Loan Repayment Program (STLRP), administered by the Health Professions Education Foundation within OSHPD, offers up to $105,000 in loan repayment to physicians in exchange for three years of service in eligible practice settings, which include community clinics or physician offices in medically underserved areas. The purpose is to increase the number of linguistically and culturally competent physicians practicing in underserved areas. It is primarily funded through special funds, with most funding provided through a $25 fee at physician license renewal.

State funding allocated for mental health workforce development has decreased, while mental health workforce shortages exist in many practice specialties and geographic areas in California. The Workforce Education and Training (WET) component of the 2004 Mental Health Services Act (Proposition 63, a tax on high-income earners to fund community mental health) set aside $445 million for mental health workforce development, including loan repayment programs, over the past decade. Pursuant to current law, the funding set-aside for the WET program ceased in 2018-19, but the 2018-19 Budget Act provided $10 million one time to continue this program and an additional $1 million to fund psychiatry fellowships at two University of California medical schools.

1. Related Budget Proposal. The governor’s proposed 2019-20 budget includes a $50 million GF investment in the Office of Statewide Health Planning and Development to support behavioral health workforce programs, including targeted funding for the STLRP that would provide loan repayment to psychiatrists.
2. Major Health Workforce Study. The California Future Health Workforce Commission was a recent foundation-supported statewide effort comprised of senior leaders across multiple sectors, including health, education, employment, labor and government. In a report released in January 2019, the commission noted a shortage of behavioral health providers and recommended expanding funding for educational capacity, stipends and scholarships to strengthen the size, distribution and diversity of the behavioral health workforce.
3. Prior Legislation. AB 2018 (Maienschein), of the 2017-18 Legislative Session, would have expanded the definition of “practice setting” for purposes of STLRP in a manner similar to the expansion in this bill, as well as added to the criteria for guidelines developed by OSHPD and the HPEF for early loan repayment consideration for trainees who otherwise satisfy all application requirements of the STLRP. AB 2018 was held on the Senate Appropriations Committee Suspense File.

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

Date of Hearing: March 26, 2019

ASSEMBLY COMMITTEE ON HEALTH

Jim Wood, Chair

ABPCA Bill Id:AB 565

Author:(Maienschein) – As Introduced Ver:February 13, 2019

SUBJECT: Mental health workforce planning: loan forgiveness, loan repayment, and scholarship programs.

SUMMARY: Expands the definition of “practice setting,” for purposes of the Steven M. Thompson Physician Corp Loan Repayment Program (STLRP) to include a program or facility operated by a county mental health plan. Specifically, this bill:

1. Requires OSHPD, as part of its five-year education and training development plan for mental health professionals, to include expansion plans for loan forgiveness and scholarship programs offered in return for a commitment to employment in California’s public mental health system.
2. Makes various findings and declarations that the Legislature intends the changes made by this bill clarify that the Office of Statewide Health Planning and Development (OSHPD) is authorized to provide for early loan repayment under current law, and to emphasize the importance of this option.

EXISTING LAW:

1. Establishes the Health Professions Education Foundation (HPEF) within 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 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 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 (including psychiatrists) 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.
7. Requires the HPEF to report annually to the Legislature on the number of STLRP participants, practice settings with program participants, the amount of funds expended for the STLRP, and information on annual performance reviews by the practice settings and program participants.
8. Requires every county and every city and county to relieve and support all incompetent, poor, indigent persons, and those incapacitated by age, disease, or accident, lawfully resident therein, when such persons are not supported and relieved by their relatives or friends, by their own means, or by state hospitals or other state or private institutions.

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

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, the shortage of psychiatrists in the United States has reached crisis levels, and California is suffering the fallout. The author states that in its 2017 report, the National Council for Behavioral Health projected demand for psychiatry would outstrip services by 25% in 2025. The author notes that, according to state records, 23 of California’s 58 counties have less than one psychiatrist per 10,000 residents, while six counties have no psychiatrists at all. The shortage has created critical weaknesses in our public mental health care delivery system that counties are struggling to patch by expanding the roles of other categories of workers, such as physician assistants, nurse practitioners, and peer providers. The author states that a lasting solution requires a more substantive fix that revitalizes the field of psychiatry, and must include a powerful incentive to steer promising students into careers in community psychiatry, ensuring our most vulnerable residents have access to quality psychiatric care.
2. BACKGROUND. The provision of services and treatment to those who suffer from mental illness or who are at risk of mental illness is an issue of statewide and national importance. According to the U.S. Department of Health and Human Services’ 2015-16 data, 17% of California adults (nearly 5 million people) have mental health needs, while about 4% suffer from serious mental illnesses. Moreover, the U.S. Department of Housing and Urban Development estimated that in 2016 more than one fourth (31,000 individuals) of California’s homeless population suffered from serious mental illnesses.
   1. HPEF and STLRP. The HPEF is a state non-profit established in 1987 and housed in OSHPD. HPEF has awarded more than 16,385 scholarships and loan repayments totaling more than $186.75 million to California health professionals serving in all 58 counties in areas of unmet need. 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. Other OSHPD Administered Loan & Scholarship Programs.
      
      1. Mental Health Loan Assumption Program (MHLAP). #MHLAP was created by the Mental Health Services Act (MHSA), passed by California voters in November 2004. The MHSA provided funding to develop a loan forgiveness program in order to retain qualified professionals working within the Public Mental Health System. Counties determine which professions are eligible for their hard-to-fill or retain positions. Some of the eligible professions include, but are not limited to, Registered or Licensed Psychologists, Registered or Licensed Psychiatrists, Postdoctoral Psychological Assistants, Postdoctoral Psychological Trainees, Registered or Licensed Marriage and Family Therapists (LMFTs), Registered or Licensed Clinical Social Workers (LSCW), Licensed Professional Clinical Counselors (LPCCs), LPCC Interns, and Registered or Licensed Psychiatric Mental Health Nurse Practitioners in California. Support, managerial and/or fiscal staff may be eligible.
         
      2. Licensed Mental Health Service Provider Education Program (LMH). Like the other HPEF programs, the LMH was statutorily created to encourage individuals from underrepresented communities to become health professionals and increase access to health providers in MUAs. The LMH is funded through a $10 surcharge for renewal and licensure fees of psychologists, marriage and family therapists, and licensed clinical social workers in California. An awardee may receive up to $15,000 to repay educational loans in exchange for up to two-years practicing and providing direct care in a publicly funded mental health facility, a non-profit mental health facility, a mental health professions shortage area, or in a public mental health system.
         
   3. Governor’s Budget proposal. The Governor’s budget proposes $50 million in one-time General Fund (GF) to expand the mental health workforce. Specifically, OSHPD requests multi-year appropriation authority of $50 million GF beginning in fiscal year 2019-20, through 2024-25, to support mental health workforce development programs. OSHPD does not anticipate the need for any additional legislation to implement the proposal, as the funds will support existing programs. OSHPD proposes to fund the following programs:
      

• 1. Five-year plans. OSHPD develops and administers statewide mental health workforce education and training programs to increase the number of qualified personnel serving individuals who have serious mental illness. Funds were provided through Proposition 63, the MHSA, which required five-year spending plans. From 2008 to 2013, the former Department of Mental Health administered the first five-year plan. The responsibility for administering the plan was transferred to OSHPD in 2013. Funding for the program expired on June 30, 2018. OSHPD recently completed the development of the third five-year plan (2020-25), as required by law, however the plan has not been funded and a cost estimate has not been completed.

1. SUPPORT. The Steinberg Institute and the California Psychiatric Association are the co-sponsors of this bill and note that the shortage of psychiatrists in the United States has reached crisis levels; and California is suffering the fallout. As it now stands, 55% of counties in the U.S. have no psychiatrists, and 77% have a severe shortage. Among psychiatrists who are practicing, nearly half operate on a cash-only basis, meaning much of the population cannot access or afford their services. According to OSHPD, 23 of California’s 58 counties have less than one psychiatrists per 10,000 residents, while six counties have none at all. The sponsors state that with tuition costs for medical schools escalating at an alarming rate, effective debt relief is a key component of a comprehensive strategy to recruit individuals to a career in psychiatry in the public mental health field.
2. RELATED LEGISLATION. AB 1619 (Weber) appropriates $20 million from the GF to OSHPD, to increase available grant moneys for students eligible to apply for MHLAP. The funds would also be used to increase the maximum grant amount for an MHLAP recipient to $15,000, and to develop and implement an informational outreach program to attract and encourage eligible students from culturally and ethnically diverse communities to apply to MHLAP. AB 1619 would express the intent of the Legislature that the total amount allocated to MHLAP from all funding sources each fiscal year be a minimum of $30 million. AB 1619 is currently pending in the Assembly Health Committee.
3. PREVIOUS LEGISLATION.
   1. AB 2018 (Maienschein) of 2018 would have expanded the definition of “practice setting” for purposes of STLRP to include a program or facility operated by, or contracted to, a county mental health plan, and, added to the criteria for guidelines developed by OSHPD and the HPEF for early loan repayment consideration for trainees who otherwise satisfy all application requirements of the STLRP. AB 2018 was held on the Senate Appropriations Committee suspense file.
   2. AB 1188 (Nazarian), Chapter 557, Statutes of 2017, increases from $10 to $20 the additional license renewal fee collected by the Board of Psychology from licensed psychologists and by the Board of Behavioral Sciences (BBS) from LMFTs and LCSWs for the Licensed Mental Health Service Provider Education Program (Loan Program); adds LPCCs to the definition of "licensed mental health service provider" for participation in the Loan Program; and requires the BBS to collect the additional $20 licensure renewal fee from LPCCs.
      
4. SUGGESTED AMENDMENTS.
   1. Currently the STLRP may award up to 20% of funding to non-primary care specialties (i.e. psychiatrist, emergency physicians). In recent award cycles, HPEF has not awarded up to the 20% cap. For example, in the 2017-18 award cycle, of 44 total recipients, only three were psychiatrists. The author may wish to amend the bill to require HPEF to meet the 20% cap if there are enough qualified, non-primary care applicants.
   2. As currently drafted, the intent language in this bill states that OSHPD is authorized to provide for early loan repayment under current law, and to emphasize the importance of this option. It is unclear what “early” loan repayment means and OSHPD already has the ability to provide scholarships, grants, and loan repayments. The Committee may wish to remove the intent language from this bill.

REGISTERED SUPPORT / OPPOSITION:

Support

California Psychiatric Association (cosponsor)
Steinberg Institute (cosponsor)
American Congress of Obstetricians & Gynecologists - District IX
American Federation of State, County and Municipal Employees, AFL-CIO
California Alliance of Child and Family Services
California Chapter of the American College Of Emergency Physicians
California Medical Association

Opposition

None on file.

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