BILL NUMBER: SB 726 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 6, 2009
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:
District 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
certain conditions are satisfied. Existing law defines a qualified
district hospital as a district hospital that provides a certain
percentage of care to Medicare, Medi-Cal, and uninsured
patients, that is located in a county with a certain population, and
that has net losses from operations in a specified fiscal year
. 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 qualified
district hospitals meeting specified requirements
of an unlimited number of physicians and surgeons under the
pilot project, and would authorize such a hospital to employ
more than 2 up to 5 licensees at a time
in certain circumstances if certain
requirements are met. The bill would revise the definition of a
qualified district hospital to a hospital that, among other things,
is operated by the district itself and is either a small and rural
hospital, as defined, or is located within a medically underserved
area, as specified. The bill would further revise the pilot project
to authorize a qualified district hospital to directly
employ a physician and surgeon specializing in family practice,
internal medicine, general surgery, or obstetrics and gynecology, and
would authorize the hospital to request permission from the board to
employ a physician and surgeon specializing in a different field if
certain requirements are met . 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, 2018. The bill would
require the board to 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, 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 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 qualified 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. 3. SEC. 2. 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 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
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 general acute care hospital, as defined in Section 1250
of the Health and Safety Code.
(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) Is operated by the district itself, and not by another entity.
(2)
(3) Is located within a medically underserved
population, medically underserved area, or health professions
shortage area, population or medically underserved
area, so designated by the federal government pursuant to
Section 254b, 254c-14, or 254e 254b or
254c-14 of Title 42 of the United States Code, or is a
small and rural hospital as defined in Section 124840 of the
Health and Safety Code.
(3)
(4) (A) The chief executive officer of the hospital has
provided certification to the board that it
and the medical staff that the hospital has been unsuccessful
, using commercially reasonable efforts, in
recruiting a core physician and surgeon for at least 12
consecutive months during the period beginning on July 1, 2008, and
ending on July 1, 2009. This certification shall specify the
commercially reasonable efforts, including, but not limited to,
recruitment payments or other incentives, used to recruit a core
physician and surgeon that were unsuccessful and shall specify the
reason for the lack of success, if known.
(B) For purposes of this paragraph, "core physician"
physician and surgeon" means a physician and
surgeon specializing in family practice, internal medicine, general
surgery, orthopedic surgery, or obstetrics and
gynecology.
(C) Notwithstanding subparagraph (A), a hospital may request
permission from the board to hire a physician and surgeon in a
specialized field other than the fields listed in subparagraph (B) if
all of the following requirements are met:
(i) The hospital can demonstrate a pervasive inability to meet the
needs of the health care district in that specialized field.
(ii) The chief medical officer of the hospital provides the
certification described in subparagraph (A) regarding the hospital's
efforts to recruit a physician and surgeon in the specialized field
during the period of time specified in subparagraph (A).
(iii) The other applicable requirements of this subdivision are
satisfied.
(4) The
(5) Except as provided in subparagraph
(B) of paragraph (7), the medical staff and the elected
trustees of the 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.
(5)
(6) 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.
(6)
(7) (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).
no more than three additional licensees if both of the following
requirements are met:
(i) The hospital makes a showing of clear need in the community
following a public hearing duly noticed to all interested parties,
including, but not limited to, those involved in the delivery of
medical care.
(ii) The medical staff concurs by an affirmative vote that
employment of the additional licensee or licensees is in the best
interest of the communities served by the hospital.
(7)
(8) 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.
(d) The board shall 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.
(e) 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.
(f) This section shall remain in effect only until January 1,
2018, and as of that date is repealed, unless a later enacted statute
that is enacted before January 1, 2018, deletes or extends that
date.