BILL NUMBER: SB 726 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 23, 2009
INTRODUCED BY Senator Ashburn
FEBRUARY 27, 2009
An act to amend Sections 2401 and 2401.1 of the Business and
Professions Code, relating to medicine.
LEGISLATIVE COUNSEL'S DIGEST
SB 726, as amended, Ashburn. Hospitals: employment of physicians
and surgeons.
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.
Existing law establishes, until January 1, 2011, a pilot project to
allow qualified district hospitals, 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 authorizes the direct employment of a
total of 20 physicians and surgeons by those hospitals, and specifies
that each qualified district hospital may employ up to 2 physicians
and surgeons, subject to certain requirements. The pilot project
requires that the term of a contract with a licensee not exceed 4
years. Existing law requires the Medical Board of California to
report to the Legislature not later than October 1, 2008, on the
effectiveness of the pilot project.
This bill would revise the pilot project to authorize the direct
employment by general acute care hospitals meeting specified
requirements of an unlimited number of physicians and surgeons under
the pilot project, and would authorize such a hospital to employ
up to 5 more than 2 licensees at a time
in certain circumstances . The bill would require
that the term of a contract with a licensee not exceed 10 years.
The bill would extend the pilot project until January 1,
2016, 2018 . T he bill
would require the board to provide a preliminary
report to the Legislature not later than October
July 1, 2013, and a final report not later than July
1, 2016, on the evaluation of
evaluating the effectiveness of the pilot project, and would
make conforming changes.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature hereby finds and declares that a 2001
University of California, San Francisco, study found that the Inland
Empires, Central Valley/Sierra Nevada, and South Valley/Sierra Nevada
regions have at least 30 percent fewer physicians and surgeons than
the Los Angeles and San Francisco Bay area regions.
SEC. 2. 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 qualified hospital 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. 3. Section 2401.1 of the Business and Professions Code is
amended 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 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 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 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
physicians and surgeons by qualified 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 hospital means a
hospital that meets both all of the
following requirements:
(1) Is a general acute care hospital, as defined in Section 1250
of the Health and Safety Code.
(2) Is located within a medically underserved population,
medically underserved area, or health professions shortage area, so
designated by the federal government pursuant to Section 254b,
254c-14, or 254e of Title 42 of the United States Code, or is a rural
hospital as defined in Section 124840 of the Health and Safety Code.
(d) In addition to the requirements of subdivision (c), and in
addition to other applicable laws, a qualified hospital may directly
employ a licensee pursuant to subdivision (b) if all of the following
conditions are satisfied:
(3) (A) The chief executive officer of the hospital has provided
certification to the board that it has been unsuccessful in
recruiting a core physician for at least 12 consecutive months during
the period beginning on July 1, 2008, and ending on July 1, 2009.
(B) For purposes of this paragraph, "core physician" means a
physician and surgeon specializing in family practice, internal
medicine, general surgery, orthopedic surgery, or obstetrics and
gynecology.
(1)
(4) The medical staff and the elected trustees of the
qualified 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.
(2) The licensee enters into or renews a written employment
contract with the qualified hospital prior to December 31, 2011, for
a term not in excess of four years. The contract
(5) The hospital enters into or renews
a written employment contract with the physician and surgeon prior to
December 31, 2017, for a term not in excess of 10 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.
(3) The total number of licensees employed by the qualified
hospital does not exceed five at any time.
(6) (A) Except as provided in subparagraph (B), the total number
of licensees employed by the hospital does not exceed two at any
time.
(B) The board shall authorize the hospital to hire additional
licensees if the medical staff and elected trustees concur by an
affirmative vote taken pursuant to paragraph (4).
(4) The qualified
(7) The 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)
(d) The board shall report to the Legislature
not later than October 1, 2013, on the evaluation of
provide a preliminary report to the Legislature not later than July
1, 2013, and a final report not later than July 1, 2016, evaluating
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)
(e) Nothing in this section shall exempt the hospital
from any reporting requirements or affect the board's authority to
take action against a physician and surgeon's license.
(g)
(f) This section shall remain in effect only until
January 1, 2016 2018 , and as of that
date is repealed, unless a later enacted statute that is enacted
before January 1, 2016 2018 , deletes
or extends that date.