BILL NUMBER: SB 376 CHAPTERED
BILL TEXT
CHAPTER 411
FILED WITH SECRETARY OF STATE SEPTEMBER 17, 2003
APPROVED BY GOVERNOR SEPTEMBER 16, 2003
PASSED THE SENATE SEPTEMBER 2, 2003
PASSED THE ASSEMBLY AUGUST 28, 2003
AMENDED IN ASSEMBLY JULY 15, 2003
AMENDED IN ASSEMBLY JUNE 26, 2003
AMENDED IN SENATE JUNE 2, 2003
AMENDED IN SENATE MAY 1, 2003
INTRODUCED BY Senator Chesbro
FEBRUARY 19, 2003
An act to amend Section 2401 of, and to add and repeal Section
2401.1 of, the Business and Professions Code, relating to healing
arts.
LEGISLATIVE COUNSEL'S DIGEST
SB 376, Chesbro. Healing arts.
Existing law, the Medical Practice Act, restricts the employment
of licensed physicians and surgeons and podiatrists by a corporation
or other artificial legal entity, subject to specified exemptions.
This bill would establish until January 1, 2011, a pilot project
to allow a hospital owned and operated by a health care district, as
defined, to employ a physician and surgeon, if the hospital does not
interfere with, control, or otherwise direct the professional
judgment of the physician and surgeon. The pilot project would
authorize the direct employment of a total of 20 physicians and
surgeons by qualified district hospitals, as defined. The bill would
specify that each qualified district hospital could employ up to 2
physicians and surgeons, subject to specified requirements. The bill
would require the board to report to the Legislature not later than
October 8, 2008, on the effectiveness of the pilot project.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 2401 of the Business and Professions Code is
amended to read:
2401. (a) Notwithstanding Section 2400, a clinic operated
primarily for the purpose of medical education by a public or private
nonprofit university medical school, which is approved by the
Division of Licensing or the Osteopathic Medical Board of California,
may charge for professional services rendered to teaching patients
by licensees who hold academic appointments on the faculty of the
university, if the charges are approved by the physician and surgeon
in whose name the charges are made.
(b) Notwithstanding Section 2400, a clinic operated under
subdivision (p) of Section 1206 of the Health and Safety Code may
employ licensees and charge for professional services rendered by
those licensees. However, the clinic shall not interfere with,
control, or otherwise direct the professional judgment of a physician
and surgeon in a manner prohibited by Section 2400 or any other
provision of law.
(c) Notwithstanding Section 2400, a narcotic treatment program
operated under Section 11876 of the Health and Safety Code and
regulated by the State Department of Alcohol and Drug Programs, may
employ licensees and charge for professional services rendered by
those licensees. However, the narcotic treatment program shall not
interfere with, control, or otherwise direct the professional
judgment of a physician and surgeon in a manner prohibited by Section
2400 or any other provision of law.
(d) Notwithstanding Section 2400, a hospital owned and operated by
a health care district pursuant to Division 23 (commencing with
Section 32000) of the Health and Safety Code may employ a licensee
pursuant to Section 2401.1, and may charge for professional services
rendered by the licensee, if the physician and surgeon in whose name
the charges are made approves the charges. However, the hospital
shall not interfere with, control, or otherwise direct the physician
and surgeon's professional judgment in a manner prohibited by Section
2400 or any other provision of law.
SEC. 2. Section 2401.1 is added to the Business and Professions
Code, to read:
2401.1. (a) The Legislature finds and declares as follows:
(1) Due to the large number of uninsured and underinsured
Californians, a number of California communities are having great
difficulty recruiting and retaining physicians and surgeons.
(2) In order to recruit physicians and surgeons to provide
medically necessary services in rural and medically underserved
communities, many district hospitals have no viable alternative but
to directly employ physicians and surgeons in order to provide
economic security adequate for a physician and surgeon to relocate
and reside in their communities.
(3) The Legislature intends that a district hospital meeting the
conditions set forth in this section be able to employ physicians and
surgeons directly, and to charge for their professional services.
(4) The Legislature reaffirms that Section 2400 provides an
increasingly important protection for patients and physicians and
surgeons from inappropriate intrusions into the practice of medicine,
and further intends that a district hospital not interfere with,
control, or otherwise direct a physician and surgeon's professional
judgment.
(b) A pilot project to provide for the direct employment of a
total of 20 physicians and surgeons by qualified district hospitals
is hereby established in order to improve the recruitment and
retention of physicians and surgeons in rural and other medically
underserved areas.
(c) For purposes of this section, a qualified district hospital
means a hospital that meets all of the following requirements:
(1) Is a district hospital organized and governed pursuant to the
Local Health Care District Law (Division 23 (commencing with Section
32000) of the Health and Safety Code).
(2) Provides a percentage of care to Medicare, Medi-Cal, and
uninsured patients that exceeds 50 percent of patient days.
(3) Is located in a county with a total population of less than
750,000.
(4) Has net losses from operations in fiscal year 2000-01, as
reported to the Office of Statewide Health Planning and Development.
(d) In addition to the requirements of subdivision (c), and in
addition to other applicable laws, a qualified district hospital may
directly employ a licensee pursuant to subdivision (b) if all of the
following conditions are satisfied:
(1) The total number of physicians and surgeons employed by all
qualified district hospitals under this section does not exceed 20.
(2) The medical staff and the elected trustees of the qualified
district hospital concur by an affirmative vote of each body that the
physician and surgeon's employment is in the best interest of the
communities served by the hospital.
(3) The licensee enters into or renews a written employment
contract with the qualified district hospital prior to December 31,
2006, for a term not in excess of four years. The contract shall
provide for mandatory dispute resolution under the auspices of the
board for disputes directly relating to the licensee's clinical
practice.
(4) The total number of licensees employed by the qualified
district hospital does not exceed two at any time.
(5) The qualified district hospital notifies the board in writing
that the hospital plans to enter into a written contract with the
licensee, and the board has confirmed that the licensee's employment
is within the maximum number permitted by this section. The board
shall provide written confirmation to the hospital within five
working days of receipt of the written notification to the board.
(e) The board shall report to the Legislature not later than
October 1, 2008, on the evaluation of the effectiveness of the pilot
project in improving access to health care in rural and medically
underserved areas and the project's impact on consumer protection as
it relates to intrusions into the practice of medicine.
(f) Nothing in this section shall exempt the district hospital
from any reporting requirements or affect the board's authority to
take action against a physician and surgeon's license.
(g) This section shall remain in effect only until January 1,
2011, and as of that date is repealed, unless a later enacted statute
that is enacted before January 1, 2011, deletes or extends that
date.