BILL ANALYSIS
AB 648
Page 1
ASSEMBLY THIRD READING
AB 648 (Chesbro)
As Amended May 5, 2009
Majority vote
BUSINESS & PROFESSIONS 9-0 HEALTH 18-0
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|Ayes:|Hayashi, Emmerson, |Ayes:|Jones, Fletcher, Ammiano, |
| |Conway, Eng, Hernandez, | |Block, Carter, Conway, De |
| |Nava, Niello, | |La Torre, |
| |John A. Perez, Smyth | |De Leon, Emmerson, |
| | | |Gaines, Hall, Hayashi, |
| | | |Hernandez, |
| | | |Bonnie Lowenthal, Nava, |
| | | |V. Manuel Perez, Salas, |
| | | |Audra Strickland |
|-----+--------------------------+-----+--------------------------|
| | | | |
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APPROPRIATIONS 15-0
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|Ayes:|De Leon, Nielsen, | | |
| |Ammiano, | | |
| |Charles Calderon, Davis, | | |
| |Duvall, Fuentes, Hall, | | |
| |Harkey, John A. Perez, | | |
| |Price, Skinner, Solorio, | | |
| |Audra Strickland, | | |
| |Torlakson | | |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Establishes a pilot project to permit certain rural
hospitals to directly employ physicians and surgeons, as specified.
Specifically, this bill :
1)Establishes the Rural Hospital Physician and Surgeon Services
Demonstration Project, which permits a rural hospital whose service
area includes a medically underserved area, a medically underserved
population, or that has been federally designated as a health
professional shortage area, to employ one or more physicians and
surgeons, not to exceed 10 physicians and surgeons at one time, as
specified, to provide medical services.
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2)Permits the rural hospital to retain all or part of the income
generated by the physician and surgeon for medical services billed
and collected by the rural hospital, if the physician and surgeon
approves the charges.
3)Permits a rural hospital to participate in the program if:
a) The rural hospital can document that it has been unsuccessful
in recruiting one or more primary care or speciality physicians
for at least 12 continuous months beginning July 1, 2008; and,
b) The chief executive officer of the rural hospital certifies to
the Medical Board of California (MBC) that the inability to
recruit primary care or speciality physicians has negatively
impacted patient care in the community and that there is a
critical unmet need in the community, based on a number of
factors, including, but not limited to, the number of patients
referred for care outside the community, the number of patients
who experienced delays in treatment, and the length of the
treatment delays.
4)States that the total number of licensees employed by the rural
hospital at one time shall not exceed 10, unless the employment of
additional physicians and surgeons is deemed appropriate by the MBC
on a case-by-case basis.
5)Requires a rural hospital employing a physician and surgeon pursuant
to develop and implement a written policy to ensure that each
employed physician and surgeon exercises his or her independent
medical judgment in providing care to patients.
6)Requires each physician and surgeon employed by a rural hospital to
sign a statement biennially indicating that the physician and
surgeon:
a) Voluntarily desires to be employed by the hospital;
b) Will exercise independent medical judgment in all matters
relating to the provision of medical care to his or her patients;
and,
c) Will report immediately to the MBC any action or event that
the physician and surgeon reasonably and in good faith believes
constitutes a compromise of his or her independent medical
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judgment in providing care to patients in a rural hospital or
other health care facility owned or operated by the rural
hospital.
7)Requires a rural hospital to retain the signed statement for at
least three years and submit a copy of the signed statement to the
MBC within 10 working days after the statement is signed.
8)Prohibits a rural hospital from interfering with, controlling, or
directing a physician's and surgeon's exercise of his or her
independent medical judgment in providing medical care to patients.
If the MBC believes that a rural hospital has violated this
prohibition, the MBC shall refer the matter to the State Department
of Public Health, which shall investigate the matter, as specified.
9)States that nothing in this chapter shall exempt a rural hospital
from a reporting requirement or affect the authority of the board to
take action against a physician's and surgeon's license.
10)Requires the MBC to deliver a report to the Legislature regarding
the demonstration project no later than January 1, 2019. The report
shall include an evaluation of the effectiveness of the
demonstration project in improving access to health care in rural
and medically underserved areas and the demonstration project's
impact on consumer protection as it relates to intrusions into the
practice of medicine.
11)Sunsets the project on January 1, 2020.
12)Makes legislative findings and declarations.
13)Defines a "rural hospital" as:
a) A general acute care hospital located in an area designated as
nonurban by the United States Census Bureau;
b) A general acute care hospital located in a rural-urban
commuting area code of 4 or greater as designated by the United
States Department of Agriculture; or,
c) A rural general acute care hospital, as defined in Health and
Safety Code 1250(a).
FISCAL EFFECT : According to the Assembly Appropriations Committee,
this bill has no direct fiscal impact to the MBC to continue oversight
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of physicians in California, the demonstration project, corporate
practice of medicine (CPM) prohibitions and exceptions, and to
complete the report to the Legislature at the end of the 10-year
period.
COMMENTS : According to the author's office, "Due to an overall
shortage of physicians, many California hospitals face significant
obstacles attracting and retaining physicians. This situation is
especially difficult in California's rural areas and this shortage
limits access to health care for Californians in these communities.
AB 646 improves access to health care in California's rural
communities through legislation allowing rural hospitals to directly
employ physicians and bill for their professional services."
The CPM is typically referred to in the context of a prohibition,
banning hospitals from employing physicians. CPM evolved in the early
20th century when mining companies had to hire physicians directly to
provide care for their employees in remote areas. However, problems
arose when physicians' loyalty to the mining companies conflicted with
patients' needs. Eventually, physicians, courts, and legislatures
prohibited CPM in an effort to preserve physicians' autonomy and
improve patient care.
There are 66 rural hospitals in California as defined by AB 648. The
sponsors of this bill indicate that rural hospitals have a
particularly difficult time attracting physicians, especially primary
care practitioners, and would benefit from the ability to hire them
directly as employees. There are varied reasons for the dearth of
qualified individuals, but often the problem is that rural communities
have a higher Medicare/Medicaid payer mix, and the resulting lower
reimbursement rates make it difficult for physicians to maintain a
practice.
SB 326 (Chesbro), Chapter 411, Statutes of 2003, established a pilot
project permitting district hospitals meeting specific requirements to
hire and employ up to two physicians each, for a total of 20
physicians statewide, if the district hospital met specified
conditions.
SB 326 required the MBC to administer and evaluate the project prior
to its sunset on January 1, 2011. In its 2008 report, the MBC stated
that it was "challenged in evaluating the program and preparing this
report because the low number of participants did not afford us
sufficient information to prepare a valid analysis of the pilot.
?[W]hile the Board supports the ban on the corporate practice of
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medicine, it also believes there may be justification to extend the
pilot so that a better evaluation can be made.
"However, until there is sufficient data to perform a full analysis of
an expanded pilot, the Board
contends that the statutes governing the corporate practice of
medicine should not be amended
as a solution to solve the problem of access to healthcare."
This bill proposes a new pilot for rural hospitals that would include
a greater number of participating facilities and physicians, for a
greater length of time, which should enable the MBC to do a more
thorough analysis of the direct employment of physicians.
Analysis Prepared by : Sarah Huchel / B. & P. / (916) 319-3301
FN: 0000889