Existing law provides for the regulation of health care service plans by the Department of Managed Health Care and imposes certain requirements on health care service plans. Existing law imposes various fines and administrative penalties for certain violations of these provisions that are deposited in the Managed Care Administrative Fines and Penalties Fund. Existing law requires the first $1,000,000 in the fund to be transferred each year to the Medically Underserved Account for Physicians for the purposes of the Steven M. Thompson Physician Corps Loan Repayment Program. Existing law requires all remaining funds to be transferred each year to the Major Risk Medical Insurance Fund for purposes of the Major Risk Medical Insurance Program.

Existing law establishes within the Health Professions Education Foundation the Steven M. Thompson Medical School Scholarship Program (STMSSP), managed by the foundation and the Office of Statewide Health Planning and Development to promote the education of medical doctors and doctors of osteopathy, as specified. Existing law provides up to $105,000 per recipient in scholarships to selected participants who agree in writing prior to completing an accredited medical or osteopathic school based in the United States to serve in an eligible setting. Existing law establishes the Steven M. Thompson Medical School Scholarship Account within the Health Professions Education Fund, which consists of private moneys donated to the STMSSP.

This bill would, beginning January 1, 2014, require that, after the first $1,000,000, be is transferred each year from the Managed Care Administrative Fines and Penalties Fund to the Medically Underserved Account for Physicians, for purposes of the STMSSP, as specified, upon appropriation by the legislature. This bill would, beginning January 1, 2014, require that no less than $1,000,000 $600,000 be transferred each year from the Managed Care Administrative Fines and Penalties Fund, provided that the fund has $2,000,000 or more in it, fund to the Steven M. Thompson Medical School Scholarship Account, for purposes of the STMSSP, upon appropriation by the Legislature. The bill would provide that if the Managed Care Administrative Fines and Penalties Fund has a balance of less than $2,000,000, the first $1,000,000 be transferred to the Medically Underserved Account for Physicians and the remainder, if any, to the Steven M. Thompson Medical School Scholarship Account. The bill would require that any amount remaining over the amounts transferred to the Medically Underserved Account for Physicians and the Steven M. Thompson Medical School Scholarship Account those two accounts be transferred each year to the Major Risk Medical Insurance Fund for purposes of the Major Risk Medical Insurance Program.