Reference Title: rural private primary care providers

AN ACT
AMENDING SECTIONS 36-2172 AND 36-2174, ARIZONA REVISED STATUTES; AMENDING SECTION 36-2921, ARIZONA REVISED STATUTES, AS AMENDED BY LAWS 1998, CHAPTER 1, SECTION 108, CHAPTER 214, SECTION 9 AND CHAPTER 256, SECTION 2; AMENDING LAWS 1997, CHAPTER 257, SECTION 5, AS AMENDED BY LAWS 1998, CHAPTER 238, SECTION 1; REPEALING SECTION 36-2921, ARIZONA REVISED STATUTES, AS AMENDED BY LAWS 1998, FOURTH SPECIAL SESSION, CHAPTER 4, SECTION 3; RELATING TO HEALTH CARE SERVICES TO RURAL AREAS.

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 36-2172, Arizona Revised Statutes, is amended to read:

36-2172 . Primary care provider loan repayment program; purpose; eligibility; default; civil penalty; exemption

A. The primary care provider loan repayment program is established in the department to pay off portions of education loans taken out by physicians , DENTISTS and mid-level providers.

B. The department shall prescribe application and eligibility requirements that are consistent with the requirements of the national health service corps loan repayment program (42 Code of Federal Regulations part 62). To be eligible to participate in the primary care provider loan repayment program, an applicant shall meet all of the following requirements:

1. Have completed the final year of a course of study or program approved by recognized accrediting agencies for higher education in a health profession licensed pursuant to title 32 or hold an active license in a health profession licensed pursuant to title 32.

2. Demonstrate current or prospective employment with a public or nonprofit entity located and providing services in a federally designated health personnel PROFESSIONAL shortage area in this state as designated under 42 Code of Federal Regulations section 62.52.

3. Contract with the department to serve and be qualified to serve in DENTISTRY, family practice, pediatrics, obstetrics or internal medicine.

C. In addition to the requirements of subsection B of this section, an applicant who is a physician shall meet both of the following requirements:

1. Have completed a professional residency program in family practice, pediatrics, obstetrics or internal medicine.

2. Contract with the department to serve for at least two years.

D. A mid-level provider OR DENTIST who participates in the primary care provider loan repayment program shall contract with the department to provide services pursuant to this section for two years.

E. In making recommendations for the primary care provider loan repayment program, the department shall give priority to applicants who intend to practice in rural areas most in need of primary care services. In determining the areas most in need of primary care services, the department shall consider areas that are either designated as medically underserved by the department or have been assigned to a high-degree-of-shortage group pursuant to 42 Code of Federal Regulations section 62.52.

F. All loan repayment contract obligations are subject to the availability of monies and legislative appropriation. The department may cancel or suspend a loan repayment contract based on unavailability of monies for the program. The department is not liable for any claims, actual damages or consequential damages arising out of a cancellation or suspension of a contract.

G. This section does not prevent the department from encumbering an amount that is sufficient to assure payment of each primary care provider loan for a period of up to two years.

H. The department shall issue program monies to pay primary care provider loans that are limited to the amount of principal, interest and related expenses of educational loans according to the following schedule:

1. For physicians AND DENTISTS :

(a) For the first year of service, a maximum of twenty thousand dollars.

(b) For the second year of service, a maximum of twenty thousand dollars.

(c) For the third year of service, a maximum of twenty-two thousand dollars.

(d) For the fourth year of service, a maximum of twenty-five thousand dollars.

2. For mid-level providers, a maximum of seven thousand five hundred dollars for each of the two years of service.

I. A physician OR DENTIST who enters into an original two-year contract may apply for additional contracts for one or two years, subject to approval by the department.

J. A participant in the primary care provider loan repayment program who breaches the loan repayment contract by failing to begin or to complete the obligated services is liable for liquidated damages in an amount equivalent to twice the total uncredited amount of the loan repayment contracted for on a prorated monthly basis. The department may waive the liquidated damages provisions of this subsection if it determines that death or permanent physical disability accounted for the failure of the participant to fulfill the contract. The department may prescribe additional conditions for default, cancellation, waiver or suspension that are consistent with the national health service corps loan repayment program (42 Code of Federal Regulations sections 62.27 and 62.28).

K. Notwithstanding section 41-192, the department may retain legal counsel and commence whatever actions are necessary to collect loan payments and charges if there is a default or a breach of a contract entered into pursuant to this section.

Sec. 2. Section 36-2174, Arizona Revised Statutes, is amended to read:

36-2174 . Rural private primary care provider loan repayment program; private practice

A. The department of health services shall establish a rural private primary care provider loan repayment program for physicians , DENTISTS and mid-level providers with current or prospective rural primary care practices located in medically underserved areas in this state, as designated pursuant to 42 Code of Federal Regulations section 62.52 PRESCRIBED IN SECTION 36-2352 . To be eligible to participate in the program an applicant shall agree to provide organized, discounted, sliding fee scale services for medically uninsured individuals from families with annual incomes below two hundred per cent of the federal poverty guidelines as established annually by the United States department of health and human services. The department shall approve the sliding fee scale used by the provider. The provider shall assure notice to consumers of the availability of these services. The department shall give preference to applicants who agree to serve in rural areas. For the purposes of this subsection, "rural" means either of the following:

1. A county with a population of less than four hundred thousand persons according to the most recent United States decennial census.

2. A census county division with less than fifty thousand persons in a county with a population of four hundred thousand or more persons according to the most recent United States decennial census.

B. Except as provided in section 36-2172, subsection B, paragraph 2, relating to employment in a public or nonprofit entity, the program established pursuant to this section and loan repayment contracts made pursuant to this section shall comply with the requirements of section 36-2172.

C. The department of health services may apply for and receive private donations and grant monies to implement the rural private primary care provider loan repayment program established pursuant to this section.

Sec. 3. Section 36-2921, Arizona Revised Statutes, as amended by Laws 1998, chapter 1, section 108, chapter 214, section 9 and chapter 256, section 2, is amended to read:

36-2921 . Tobacco tax allocation

A. Subject to the availability of monies in the medically needy account established pursuant to section 36-774 the administration shall use the monies in the account in the following order:

1. The administration shall withdraw the amount necessary to pay the state share of costs for providing health care services to any person who is eligible pursuant to section 36-2901, paragraph 4, subdivisions (a), (c) and (h) and who becomes eligible for a heart, lung, heart-lung, liver or autologous and allogeneic bone marrow transplant pursuant to section 36-2907, subsection A, paragraph 11, subdivision (d) as determined by the administrator and to any person who is eligible pursuant to section 36-2901, paragraph 4, subdivision (b) and who becomes eligible for a lung or heart-lung transplant pursuant to section 36-2907, subsection A, paragraph 11, subdivision (b), as determined by the administrator.

2. Beginning on August 1, 1995 and on the first day of each month thereafter UNTIL JULY 1, 1998 , the sum of one million two hundred fifty thousand dollars shall be transferred from the medically needy account to the medical services stabilization fund for uses as prescribed in section 36-2922.

3. THE ADMINISTRATION SHALL WITHDRAW THE SUM OF NINE MILLION TWO HUNDRED FIFTY-ONE THOUSAND ONE HUNDRED DOLLARS IN FISCAL YEAR 1998-1999 FOR DEPOSIT IN THE CHILDREN'S HEALTH INSURANCE PROGRAM FUND ESTABLISHED BY SECTION 36-2995 TO PAY THE STATE SHARE OF THE CHILDREN'S HEALTH INSURANCE PROGRAM ESTABLISHED PURSUANT TO ARTICLE 4 OF THIS CHAPTER.

3. 4. From and after August 1, 1995 and each year thereafter, the administration shall transfer the following monies to the department of health services to be allocated as follows if the department awards a contract:

(a) Five million dollars, for the mental health grant program established pursuant to section 36-3414.

(b) Six million dollars, for primary care services established pursuant to section 36-2907.05.

(c) Five million dollars, for grants to the QUALIFYING community health centers established pursuant to section 36-2907.06 , SUBSECTION A .

4. 5. The administration shall transfer up to five hundred thousand dollars for fiscal years 1997-1998 , and 1998-1999 AND 1999-2000 for pilot programs providing detoxification services in counties having a population of five hundred thousand persons or less according to the most recent United States decennial census. The department of health services shall report to the joint legislative oversight committee on the tobacco tax and health care fund no later than October 1, 1998 regarding the operation and effectiveness of the detoxification pilot programs funded pursuant to this subsection. The report shall also include recommendations regarding the continued funding of these programs.

5. 6. The administration shall transfer up to two hundred fifty thousand dollars annually for fiscal years 1995-1996, 1996-1997, 1997-1998 , and 1998-1999 AND 1999-2000 for telemedicine pilot programs designed to facilitate the provision of medical services to persons living in medically underserved areas as provided in section 36-2352.

6. 7. The administration shall transfer up to two hundred fifty thousand dollars annually beginning in fiscal year 1996-1997 for contracts by the department of health services with nonprofit organizations that primarily assist in the management of end stage renal disease and related problems. Contracts shall not include payments for transportation of patients for dialysis.

7. 8. Contingent on the existence of a premium sharing demonstration project fund, beginning October 1, 1996 and until September 30, 1999, the administration shall withdraw the sum of twenty million dollars in each of fiscal years 1996-1997, 1997-1998 and 1998-1999 for deposit in the premium sharing demonstration project fund established by section 36-2923 to provide health care services to any person who is eligible for an Arizona health care cost containment system premium sharing demonstration program enacted by the legislature. The Arizona health care cost containment system premium sharing demonstration program enacted by the legislature shall not be an entitlement program. BEGINNING ON OCTOBER 1, 1997, the administration shall annually withdraw monies from the medically needy account not to exceed two per cent of the sum of any monies transferred pursuant to this paragraph for administrative costs associated with the premium sharing demonstration project.

8. 9. Subject to the availability of monies, the Arizona health care cost containment system administration shall transfer to the department of health services up to five million dollars annually beginning in fiscal year YEARS 1996-1997 AND 1997-1998 AND TWO MILLION FIVE HUNDRED THOUSAND DOLLARS IN FISCAL YEAR 1998-1999 for providing nonentitlement funding for a basic children's medical services program established by section 36-2907.08. The administration may also withdraw and transfer to the department amounts for program evaluation and for administrative costs as prescribed in section 36-2907.08.

9. 10. Subject to the availability of monies, the sum of one million dollars shall be transferred annually to the health crisis fund for use as prescribed in section 36-797.

10. 11. Subject to the availability of monies, the Arizona health care cost containment system administration shall transfer to the aging and adult administration in the department of economic security the sum of five hundred thousand dollars annually beginning in fiscal year 1997-1998 for services provided pursuant to section 46-192, subsection A, paragraph 4. Services shall be used for persons who meet the low income eligibility criteria developed by the aging and adult administration.

11. 12. Subject to the availability of monies, the Arizona health care cost containment system administration shall transfer to the department of health services the sum of two hundred thousand dollars annually beginning in fiscal year 1998-1999 for contracts entered into pursuant to section 36-132, subsection D, with hospitals THAT ARE licensed by the department of health services AND that perform nonrenal organ transplant operations. These contracts shall not include payments for transportation to and from treatment facilities.

13. SUBJECT TO THE AVAILABILITY OF MONIES, THE ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM ADMINISTRATION SHALL ANNUALLY TRANSFER TO THE DEPARTMENT OF HEALTH SERVICES THE SUM OF ONE HUNDRED ELEVEN THOUSAND TWO HUNDRED DOLLARS TO IMPLEMENT THE RURAL PRIVATE PRIMARY CARE PROVIDER LOAN REPAYMENT PROGRAM ESTABLISHED PURSUANT TO SECTION 36-2174. THE DEPARTMENT SHALL NOT USE THESE MONIES FOR ADMINISTRATIVE COSTS. THE TRANSFERS MADE PURSUANT TO THIS PARAGRAPH ARE EXEMPT FROM THE PROVISIONS OF SECTION 35-190 RELATING TO LAPSING OF APPROPRIATIONS.

B. The department of health services shall establish an accounting procedure to ensure that all funds transferred pursuant to this section are maintained separately from any other funds.

C. The administration shall annually withdraw monies from the medically needy account in the amount necessary to reimburse the department of health services for administrative costs to implement each program established pursuant to subsection A of this section not to exceed four per cent of the amount transferred for each program.

D. The administration shall annually withdraw monies from the medically needy account in the amount necessary to reimburse the department of health services for the evaluations as prescribed by section 36-2907.07.

E. The administration shall annually report, no later than November 1 of each year, to the joint legislative oversight committee on the tobacco tax and health care fund the annual revenues deposited in the medically needy account and the estimated expenditures needed in the subsequent year to provide funding for services provided in subsection A, paragraph 1 of this section. The administration shall immediately report to the cochairs of the oversight committee if at any time the administration estimates that the amount available in the medically needy account will not be sufficient to fund the maximum allocations established in this section.

Sec. 4. Repeal

Section 36-2921 , Arizona Revised Statutes, as amended by Laws 1998, fourth special session, chapter 4, section 3, is repealed.

Sec. 5. Laws 1997, chapter 257, section 5, as amended by Laws 1998, chapter 238, section 1, is amended to read:

Sec. 5. Allocation; rural capital projects

Notwithstanding section 42-1245 36-771 , Arizona Revised Statutes, and subject to availability of monies, the Arizona health care cost containment system administration shall transfer two million five hundred thousand dollars from the medically needy account established pursuant to section 42-1241, subsection C, paragraph 3 36-774 , Arizona Revised Statutes, to the department of health services for EACH OF fiscal years 1997-1998 , and 1998-1999 AND 1999-2000 , for capital project grants to public and private nonprofit entities that provide health services in rural areas as defined in section 36-2171, Arizona Revised Statutes, or in medically underserved areas as prescribed in section 36-2352, Arizona Revised Statutes. Capital projects may include the purchase or lease of land, buildings, mobile medical clinics, equipment and furnishings, and other costs associated with the construction, expansion or renovation of facilities to expand primary care services as provided by section 42-1241 36-774 , Arizona Revised Statutes. The maximum amount of any capital project grant is five hundred thousand dollars. The department of health services shall give preference to applicants that serve rural areas as defined in section 36-2171, Arizona Revised Statutes, for one-half of the sum transferred in each fiscal year. The department of health services shall also give preference to applicants that provide matching or in-kind contributions. Highest preference shall be given to applicants that serve rural areas that are medically underserved and that provide matching or in-kind contributions. The department of health services shall avoid duplication of capital project components that are funded pursuant to section 36-2907.05, Arizona Revised Statutes. A recipient is eligible for only one capital project grant IN ANY TWO YEAR PERIOD AND IS LIMITED TO A MAXIMUM OF TWO CAPITAL PROJECT GRANTS pursuant to this section. Monies transferred pursuant to this section are exempt from the provisions of section 35-190, Arizona Revised Statutes, relating to lapsing of appropriations.

Sec. 6. Emergency

This act is an emergency measure that is necessary to preserve the public peace, health or safety and is operative immediately as provided by law.

APPROVED BY THE GOVERNOR MAY 18, 1999.

FILED IN THE OFFICE OF THE SECRETARY OF STATE MAY 19, 1999.