BILL NUMBER: SB 726 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JULY 15, 2009
AMENDED IN SENATE MAY 6, 2009
AMENDED IN SENATE APRIL 23, 2009
INTRODUCED BY Senator Ashburn
( Principal coauthors:
Assembly Members Chesbro and Swanson
)
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. District
Health care districts: rural 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 to employ a physician and surgeon
if 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 qualified district health care
districts and qualified rural hospitals , as defined,
of an unlimited number of physicians and surgeons under the
pilot project, and would authorize such a district or
hospital to employ up to 5 licensees
physicians and surgeons at a time 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
physician and surgeon not exceed 10 years . The bill
and 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. 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 health
care district organized and governed pursuant to Division 23
(commencing with Section 32000) of the Health and Safety Code or
a qualified rural 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 district or
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 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 qualified health
care districts and qualified rural 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
qualified health care district or qualified rural 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
qualified health care district or qualified rural 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
health care districts and qualified rural 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 "qualified
health care district" means a health care district organized and
governed pursuant to the Local Health Care District Law
(Division 23 (commencing with Section 32000) of the Health and Safety
Code). A qualified health care district shall be eligible to
employ physicians and surgeons pursuant to this section if all of the
following requirements are met:
(1) The district health care facility at which the physician and
surgeon will provide services meets both of the following
requirements:
(2)
(A) Is operated by the district itself, and not by
another entity.
(3)
(B) Is located within a medically underserved
population or medically underserved area, so designated by the
federal government pursuant to Section 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.
within a federally designated Health Professional Shortage Area.
(4) (A) The chief executive officer of the hospital has provided
certification to the board 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.
(2) The chief executive officer of the
district has provided certification to the board that the district
has been unsuccessful, using commercially reasonable efforts, in
recruiting a physician and surgeon to provide services at the
facility described in paragraph (1) for at least 12 continuous months
beginning on or after July 1, 2008. 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 and surgeon"
means a physician and surgeon specializing in family practice,
internal medicine, general 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.
(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.
(3) The chief executive officer of the district certifies to the
board that the hiring of a physician and surgeon pursuant to this
section shall not supplant physicians and surgeons with current
privileges or contracts with the facility described in paragraph (1).
(6) The hospital
(4) The district 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 physician and surgeon's clinical
practice.
(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 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
(5) The total number of physicians and
surgeons employed by the district does not exceed two at any time.
However, the board shall authorize the district to hire no more than
three additional physicians and surgeons if the district 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.
(8) The hospital
(6) The district notifies the
board in writing that the hospital district
plans to enter into a written contract with the
licensee physician and surgeon , and the board
has confirmed that the licensee's physician
and surgeon's employment is within the maximum number permitted
by this section. The board shall provide written confirmation to the
hospital district within five working
days of receipt of the written notification to the board.
(7) The chief executive officer of the district certifies to the
board that the district did not actively recruit or employ a
physician and surgeon who, at the time, was employed by a federally
qualified health center, a rural health center, or other community
clinic not affiliated with the district.
(d) (1) For purposes of this section, "qualified rural hospital"
means any of the following:
(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 four or greater as designated by the United
States Department of Agriculture.
(C) A rural hospital located within a medically underserved
population or medically underserved area, so designated by the
federal government pursuant to Section 254b or 254c-14 of Title 42 of
the United States Code, or within a federally designated Health
Professional Shortage Area.
(2) To be eligible to employ physicians and surgeons pursuant to
this section, a qualified rural hospital shall meet all of the
following requirements:
(A) The chief executive officer of the hospital has provided
certification to the board that the hospital has been unsuccessful,
using commercially reasonable efforts, in recruiting a physician and
surgeon for at least 12 continuous months beginning on or after July
1, 2008. This certification shall specify the commercially reasonable
efforts, including, but not limited to, recruitment payments or
other incentives, used to recruit a physician and surgeon that were
unsuccessful and shall specify the reason for the lack of success, if
known.
(B) The chief executive officer of the hospital certifies to the
board that the hiring of a physician and surgeon pursuant to this
section shall not supplant physicians and surgeons with current
privileges or contracts with the hospital.
(C) 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 physician and surgeon's clinical
practice.
(D) The total number of physicians and surgeons employed by the
hospital does not exceed two at any time. However, the board shall
authorize the hospital to hire no more than three additional
physicians and surgeons if 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.
(E) The hospital notifies the board in writing that the hospital
plans to enter into a written contract with the physician and
surgeon, and the board has confirmed that the physician's and surgeon'
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.
(F) The chief executive officer of the hospital certifies to the
board that the hospital did not actively recruit or employ a
physician and surgeon who, at the time, was employed by a federally
qualified health center, a rural health center, or other community
clinic not affiliated with the hospital.
(d)
(e) 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. The
board shall include in the report an analysis of the impact of the
pilot project on the ability of nonprofit community clinics and
health centers located in close proximity to participating health
care district facilities and participating rural hospitals to recruit
and retain physicians and surgeons.
(e)
(f) Nothing in this section shall exempt the
district a qualified health care district or qualified
rural hospital from any reporting requirements or affect the
board's authority to take action against a physician and surgeon's
license.
(f)
(g) 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.