BILL NUMBER: SB 726 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 20, 2009
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)
( Coauthors: Senators Cox
and Ducheny )
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. 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. 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 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 physicians and surgeons at a time if
certain requirements are met. The bill would require that the term of
a contract with a physician and surgeon not exceed 10 years 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 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 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 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 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 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, "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:
(A) Is operated by the district itself, and not by another entity.
(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 within a federally designated Health Professional Shortage
Area.
(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 physician
and surgeon that were unsuccessful and shall specify the reason for
the lack of success, if known. In providing a certification
pursuant to this paragraph, the chief executive officer need not
provide confidential information regarding specific contract offers
or individualized recruitment incentives.
(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).
(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 physician and surgeon's clinical
practice.
(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.
(6) The district notifies the board in writing that the district
plans to enter into a written contract with the physician and
surgeon, and the board has confirmed that the physician and surgeon's
employment is within the maximum number permitted by this section.
The board shall provide written confirmation to the 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 small and rural hospital as defined in Section 124840
of the Health and Safety Code.
(C)
(D) 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. In providing a certification
pursuant to this subparagraph, the chief executive officer need not
provide confidential information regarding specific contract offers
or individualized recruitment incentives.
(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.
(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.
(f) Nothing in this section shall exempt 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.
(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.