BILL ANALYSIS
AB 648
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Date of Hearing: May 20, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 648 (Chesbro) - As Amended: May 5, 2009
Policy Committee: Business &
Professions Vote: 9-0
Health 18-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill establishes a 10-year exemption from Corporate
Practice of Medicine (CPM) statutes for up to 70 rural
hospitals. CPM generally prohibits hospitals from hiring
physicians in most hospital settings. This bill establishes the
Rural Hospital Physician and Surgeon Services Demonstration
Project (project) until January 1, 2020 to authorize rural
hospitals to each employ up to 10 physicians at a time.
Establishes specific eligibility for hospitals and physicians
and requires the Medical Board of California (MBC) to report to
the Legislature by January 1, 2019.
FISCAL EFFECT
No direct fiscal impact to MBC to continue oversight of
physicians in California, the demonstration project, CPM
prohibitions and exceptions, and to complete the report to the
Legislature at the end of the 10-year period.
COMMENTS
1)Rationale . This bill is sponsored by the California Hospital
Association (CHA) to provide rural hospitals with additional
support to recruit and retain medical staff. According to the
author and sponsor, health professional workforce issues are
exacerbated in rural areas due to low reimbursement by public
payers such as Medi-Cal and Medicare and the higher
concentration of low-income, uninsured, and elderly patients
in many rural communities.
AB 648
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2)The Corporate Practice of Medicine refers to prohibitions in
California law that ban the direct employment of physicians
by hospitals. California's prohibitions in this area are some
of the strongest in the country. Current law makes exceptions
for employment of doctors by Uc medical centers, county
hospitals, some community clinics, and some non-profit
organizations. Current law contains several other specific
exemptions to CPM. This bill establishes a temporary
exception for rural hospitals until 2020.
3)Related Legislation
a) AB 646 (Swanson), also being heard in this committee
today, also establishes a CPM exception until 2020, for up
to 75 district hospitals statewide.
b) AB 1944 (Swanson), SB 1294 (Ducheny), and SB 1640
(Ashburn) in 2008 each addressed modifications of CPM and
hiring of physicians. AB 1944 died in Senate Health
Committee, SB 1294 failed passage in the Assembly
Appropriations Committee, and SB 1640 failed passage in the
Assembly Business and Professions Committee.
c) SB 376 (Chesbro), Chapter 411, Statutes of 2003
established a pilot project to authorize district hospitals
to hire up to two physicians. The MBC has had difficulty
evaluating SB 376 because of the low number of physicians
who were hired. SB 376 expires in 2011.
Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081