BILL ANALYSIS
-----------------------------------------------------------------------
|Hearing Date:April 19, 2010 |Bill No:SB |
| |1031 |
-----------------------------------------------------------------------
SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Gloria Negrete McLeod, Chair
Bill No: SB 1031Author:Corbett
As Amended:April 5, 2010 Fiscal: Yes
SUBJECT: Medical malpractice insurance: volunteer physicians and
surgeons.
SUMMARY: Creates a "Volunteer Insured Physicians Program,"
administered by the Medical Board of California to provide specified
medical malpractice insurance coverage to physicians providing
volunteer uncompensated care to patients pursuant to a contract with a
qualified health care entity, as defined.
Existing law:
1)Establishes the Medical Board of California (MBC) to license,
regulate, and discipline physicians and surgeons, specifies that the
protection of the public is the highest priority of the MBC, and
imposes various fees on those licensees.
2)Provides that the license fee and the renewal fee shall be waived
for a physician and surgeon who certifies to the MBC that the
issuance of the license or the renewal of the license is for the
sole purpose of providing voluntary, unpaid service.
3)Provides that all moneys paid to and received by the MBC shall be
paid into the State Treasury and shall be credited to the Contingent
Fund of the MBC. The contingent fund shall be for the use of the
MBC and from it shall be paid all salaries and all other expenses
necessarily incurred in carrying out the Medical Practice Act.
4)Establishes within the Office of Statewide Health Planning and
Development (OSHPD) the Health Professions Education Foundation (HPE
Foundation), which is a nonprofit public benefit corporation, and
establishes under the HPE Foundation the California Physician Corps
SB 1031
Page 2
Program which includes: (1) The Steven M. Thompson Physician Corps
Loan Repayment Program (STLRP); and, (2) the Physician Volunteer
Program (PVP) developed by the MBC. Provides that OSHPD and the
Foundation shall have ongoing responsibility for implementation and
program management of both the STLRP and the PVP.
5)Creates within the OSHPD a "Health Professions Education Fund" (HPE
Fund) with the primary purpose to provide scholarships and loans to
students from underrepresented groups who are accepted to or
enrolled in schools of medicine, dentistry, nursing, or other health
professions. The HPE Fund is supported entirely through grants and
contributions from public and private agencies, hospitals, health
plans, foundations, corporations, individuals and through licensing
fees of specified health care practitioners.
6)Creates the "Medically Underserved Account for Physicians" (MUAP)
within the HPE Fund with the primary purpose to provide funding for
the ongoing operations of STLRP and PVP.
7)Requires in addition to the fees charged for the initial issuance or
biennial renewal of a physician and surgeon's certificate, and at
the time those fees are charged, that the MBC charge each applicant,
or renewing licensee, an additional $25 fee and that these moneys
shall be transferred on a monthly basis to the MUAP which is within
the HPE Fund and which is administered by OSHPD. Specified,
however, that these funds shall not be used to provide funding for
the PVP.
8)Allows a physician and surgeon the option of making a $25 voluntary
donation upon initial licensing or renewal in order to fund the
Song-Brown Family Physician Training Act, which is administered by
the Office of Statewide Health Planning and Development (OSHPD).
9)Specifies that it is unprofessional conduct for a physician and
surgeon to fail to provide adequate security by liability insurance,
or by participation in an interindemnity trust, for claims by
patients arising out of surgical procedures performed outside of a
general acute care hospital, as defined. However, a physician and
surgeon is not required to carry medical malpractice insurance.
10)Requires the MBC, in conjunction with the HPE Foundation, to study
the issue of providing medical malpractice insurance to physicians
and surgeons who provide voluntary, unpaid services and to report
its finding to the Legislature by January 1, 2008.
11)Requires the report to include:
SB 1031
Page 3
a) The cost of administering a program to provide medical
malpractice insurance to physicians and surgeons and the process
for administering the program.
b) The options for providing medical malpractice insurance to the
physicians and surgeons and for funding the coverage.
c) Whether the voluntary licensure surcharge fee (now mandatory)
assessed to fund the STLRP is sufficient to fund the provision of
medical malpractice insurance for the physicians and surgeons.
This bill:
1)Creates the Volunteer Insured Physicians (VIP) Program pursuant to
the Volunteer Insured Physicians Act.
2)Provides that the following definitions shall apply:
a) "Volunteer physician" means a licensee who volunteers to
provide primary care medical services, as described, to a
low-income patient, with no monetary or material compensation.
b) "Qualified health care entity" means a county health
department, hospital district or hospital or clinic owned and
operated by a governmental entity.
c) "Low income patient" means a person who is without health care
coverage and whose family income does not exceed 200 percent of
the federal poverty level, as defined annually by the federal
Office of Management and Budget
d) "Voluntary service agreement" means an agreement executed
between the MBC, a licensee, and a qualified health care entity
that authorizes the health care entity to enter into a voluntary
service contract with the licensee.
e) "Voluntary service application" means the written application
developed by the MBC that a licensee must complete and submit in
order to be considered for participation in the VIP Program.
f) "Voluntary service contract" means an agreement executed
between a licensee and a qualified health care entity that
authorizes the licensee to deliver health care services to
low-income patients as an agent of the qualified health care
entity on a volunteer, uncompensated basis.
SB 1031
Page 4
3)Provides that a licensee who wants to provide voluntary,
uncompensated care to low-income patients, but who does not have
medical professional liability insurance may submit a voluntary
service application to the MBC for coverage under the VIP Program.
4)Requires a licensee who submits an application for a waiver of
initial and renewal licensing fees, as specified, and who also
submits a voluntary service application to be simultaneously
assessed by the MBC for eligibility to receive medical professional
liability insurance coverage.
5)Permits a licensee who already has standard medical professional
liability insurance coverage for his or her regular practice but who
is not covered for volunteer service may submit a voluntary service
application to participate in the VIP Program, and in conjunction
with the voluntary service application, the licensee shall submit
verification from his or her medical professional liability
insurance carrier that voluntary, uncompensated care is not covered
by his or her existing medical professional liability insurance
policy.
6)Provides that the criteria for participation in the VIP Program
includes holding a license in good standing and no record of
disciplinary action by the MBC or any other regulatory board.
7)Provides that continued eligibility for the VIP Program shall be
reassessed by the MBC during each license renewal cycle.
8)Provides that licensees approved by the MBC for participation in the
VIP Program may enter into a voluntary service agreement with the
MBC and a qualified health care entity that acknowledges the terms
of the VIP Program and transfers responsibility from the volunteer
physician to the state for medical professional liability insurance,
including premiums, defense and indemnity costs, for voluntary,
uncompensated medical care that is provided in accordance with an
executed and signed voluntary service contract between the volunteer
physician and the qualified health care entity and that complies
with the terms of the VIP Program.
9)Specifies what the voluntary service contract between the volunteer
physician and the qualified health care entity shall include.
10)Requires volunteer physicians participating in the VIP Program to
agree to limit the scope of volunteer medical care to primary care
medical services.
SB 1031
Page 5
11)Provides that the fact that a volunteer physician is insured under
the VIP Program in relation to particular medical services rendered
shall not operate to change or affect the laws applicable to any
claims arising from or related to those medical services, and that
all laws applicable to a claim remain the same regardless of whether
a licensee is insured through the VIP Program.
12)Requires that when a volunteer physician covered by the VIP Program
receives notice or otherwise obtains knowledge that a claim of
professional medical negligence has been or may be filed, that they
immediately notify the VIP Program or the contracted liability
carrier.
13)Provides that all costs for administering the VIP Program,
including the cost of medical professional liability insurance for
premiums, defense, and indemnity coverage for program participants,
shall be paid from the Contingent Fund of the MBC, in an amount not
to exceed _____dollars ($_____) per year. (There is not estimated
amount from the MBC at this time.)
FISCAL EFFECT: Unknown. This bill is keyed "fiscal" by Legislative
Counsel.
COMMENTS:
1.Purpose. This measure is Co-Sponsored by the Medical Board of
California (MBC) and the California Medical Association (CMA).
According to the Author, the California HealthCare Foundation has
reported that the number of Californians without medical insurance
coverage has risen to 6.7 million, including 1 million uninsured
children and that 76% of California's uninsured are from minority
communities. The Author and CMA states that it has long been
recognized by health care leaders that one of the challenges and
potential barriers to physician volunteerism is the concern about
medical malpractice liability associated with providing
uncompensated care and that the federal government and 43 states
have established a program to promote volunteerism by physicians.
California, the Author argues, is one of the seven remaining states
in the U.S. that have no program to cover physicians that provide
unpaid, voluntary services.
The MBC reports that there are over 125,000 licensed physicians in
California, yet California's clinics suffer from an inadequate
supply of physicians to care for the under- or non-insured
SB 1031
Page 6
population. The MBC indicates that many physicians who would like
to volunteer their services are unable to do so due to the cost of
medical practice insurance and believes that providing this
insurance would undoubtedly encourage more physicians to volunteer
their time and services to communities and consumers in need and
would lead to expanded access to health care for consumers in
California.
The CMA believes that in the absence of a sufficient supply of
physicians providing services at free community clinics and health
centers, patients without the ability to pay for medical care would
most likely go without care or seek services at an emergency room
and that within the emergency room setting, the cost of care will be
shifted to the government who is likely to pay for part of the
costs, to physicians who end up providing involuntary uncompensated
care, to the hospital, and to other paying patients when costs are
increased to cover any operating shortfall. So, the CMA argues, it
is clearly in the public interest to facilitate the provision of
primary care services in clinics to patients who cannot afford to
pay.
2.Similar and Previous Legislation. AB 2699 (Bass, 2010) would
provide an exemption from licensure for a health care practitioner
licensed in another state who offers or provides health care
services on a short-term voluntary basis, as specified, and without
charge to the recipient or a 3rd party on behalf of the recipient,
in association with a sponsoring entity that registers and provides
specified information to a designated local agency. Also, states
that is it the intent of the Legislature that these health care
services be provided primarily to uninsured and underinsured
persons, as specified. This measure is currently awaiting a hearing
in the Assembly Business and Professions Committee.
AB 2439 (De La Torre, Chapter 640, Statutes of 2008) required the MBC
to charge physicians and surgeons an additional $25 as part of their
initial license fee or renewal fee to support the STLRP.
AB 2342 (Nakanishi, Chapter 276, Statutes of 2006) required the MBC,
in conjunction with the Health Professions Education Foundation, to
study the issue of providing medical malpractice insurance to
physicians who provide voluntary, unpaid services and report its
findings to the Legislature on or before January 1, 2008.
AB 621 (Nakanishi, 2003) would have created within the Department of
Health Services (DHS) the "Physicians and Surgeons Liability
Insurance Pilot Program" (PSLIPP) to purchase liability insurance
SB 1031
Page 7
for physicians who are eligible under existing law for waiver of
license renewal fees if the sole purpose of license renewal is to
provide voluntary, unpaid services to specified agencies. Made the
PSLIPP contingent upon receiving private funding sufficient to pay
for the administrative costs of the program and the cost of
liability insurance. Estimated costs for DHS to establish and
administer the PSLIPP was $100,000 and costs for liability insurance
estimated to be $1.1 to $1.9 million. That bill was held in the
Senate Appropriations Committee.
3.Study Completed by the MBC on Physician Volunteerism and Protecting
Physician Volunteer from Medical Malpractice Liability. As
indicated, AB 2342 required that MBC, in conjunction with the Health
Professions Education Foundation, to study the issue of providing
medical malpractice insurance to physicians who provide voluntary,
unpaid service. The MBC provided a "Report to Address Assembly Bill
2342 (2006)" (Report) on December 31, 2008. The study specifically
focused on the options and potential costs of providing medical
malpractice coverage or funding for medical malpractice coverage to
licensed physicians and surgeons who volunteer their time to provide
uncompensated medical services to patients.
The Report first evaluated California's population of patients in need
and the medical facilities that provide care to the uninsured or
underinsured. It found that in 2001, the number of uninsured was
estimated to be 6.3 million and that this increased to 6.6 million
by 2003. In 2007, approximately 7.6 million Californians relied on
a "safety net" of community health centers, public hospitals and
clinics for regular care. The Report stated that the uninsured are
less likely to have a usual source of primary care and provided a
breakdown of those receiving care at community clinics and hospitals
(5 million) and those receiving emergency care (250,000) in just
2005; also, provided a breakdown of those receiving Medi-Cal. The
Report discussed county indigent health care programs and
populations served and the number of primary care clinics serving
the uninsured. The Report stated that all of these different health
care networks are experiencing fiscal difficulties as well as
problems in managing costs.
The Report examined the use of health care volunteers in California.
It was indicated that states without volunteer tort immunity
experience lower levels of volunteerism, and people are more likely
to volunteer in those states which have higher levels of immunity.
The Report found that California has 6.7 million volunteers, who
provided 896.4 million hours of service per year between the years
of 2005 and 2007. Those services are estimated to be worth $17.5
SB 1031
Page 8
billion each year. Seven percent of those volunteers (approximately
469,000) provided some form of volunteer services for the health
care industry; however, California still only ranks 42nd among the
states. It was not possible to find the percentage of volunteers
providing health care related services who are physicians.
The MBC, however, does maintain a Physician Volunteer Registry. The
registry was created so that clinics and other health care entities
may contact those physicians to provide volunteer services. The
physicians listed in the registry have typically retired from
practice. The MBC notifies the clinic or health care entities that
malpractice insurance will need to be provided to the volunteer.
There are approximately 250 physicians in the registry.
The Report surveyed other federal and state laws related to volunteer
physician malpractice liability protections and found several
variations in those programs. The federal programs generally
provided immunity from liability for claims of medical malpractice;
however, none of these programs extended to an individual physician
or health care entity or clinic if voluntary uncompensated services
were being provided.
The Report indicated that there are currently 43 states with laws that
protects physicians from civil liability for administering health
care in non-emergency circumstances and that there were several
different models. Many states have adopted the model of providing
physician immunity from claims of common negligence (unless they
committed acts of gross negligence, or willful or wanton
misconduct). However, in many of these states where the volunteer
physician may be immune, the organization/facility may be held
liable for the volunteer's actions. In other states the volunteer
physician becomes a government employee when he/she is providing
unpaid care in either a designated facility and/or to certain
categories of patients. Finally, as in the instance of this bill,
some states provide liability coverage to volunteer physicians
through a state-run self-insured risk pool. The state of Minnesota
possibly has the closest resemblance to this measure and purchases
malpractice insurance for uncovered volunteer physicians. The cost
of professional liability premiums is paid through the revenues
generated by physician licensing fees. (It should be noted that
nurses and dentists are also covered under the Minnesota program.)
Some states which provide malpractice liability insurance have also
provided for statutory immunity as well for those voluntary
practitioners for claims of common negligence. According to the
Report, with the adoption of the statutory immunity provision, the
cost of insurance has significantly decreased. What is interesting
SB 1031
Page 9
to note about the Minnesota program is that since the inception of
the program in 1992, there has never been a claim, settlement or
judgment related to malpractice claims against a volunteer
physician, nurse or dentist. Washington state has a similar program
and indicates that since their programs began 15 years ago there
have been no malpractice claims issued against a volunteer provider.
The costs associated with these programs vary with, as indicated,
those programs which have an immunity provision in combination with
a purchased insurance program costing much less for coverage than
those which have a standalone program to purchase malpractice
insurance. The Report indicates that in order for California to
purchase malpractice liability, revenues could be generated by
increased physician license fees. However, it cautions that because
of the current high fees for physicians any increases may be
difficult to implement. (The MBC estimated that possibly $3 million
would be necessary to operate a program and purchase insurance which
would mean an additional $50 biennial fee.) The Report also
questions whether assessing physician licensing fees is the most
appropriate avenue to generate funds for this program since most
states pay our of their General Fund to operate such a program.
Finally, the Report points out that California remains one of only
seven states that have yet to enact any meaningful legislation that
relieves the providers who render voluntary, unpaid care to patients
from paying the high cost of professional liability insurance. Lack
of malpractice coverage is perceived as a serious impediment to
attracting volunteers. The Report states that if California desires
to promote physician volunteerism then legislation must address the
following:
a) Adopt one or more of the liability protection models as
explained: (1) an immunity statute in which the provider is not
liable for common negligence; (2) an immunity statute in which a
physician volunteer would be considered a state employee when
providing uncompensated care; (3) a state-established malpractice
insurance program in which the state either purchases for
physician volunteers or establishes a self-insured pool.
b) Determine the setting where liability protection would apply
such as free clinics, non-profits, hospitals, private physician
offices, etc.
c) Determine whether there would be any limitation to the type of
care that may be rendered such as surgical, anesthesia, minor
procedures, primary care, etc.
SB 1031
Page 10
d) Identify the patients who would be covered under the program
such as medically indigent, Medi-Cal, Medicare, etc.
e) Establish a clinic and physician registration process. The
MBC already has Physician Volunteer Registry to determine who
could be approved as participating providers.
4.Policy Issue : Should the MBC be responsible for the administration
of a physician insurance program? In the Report it was stated that:
"If a volunteer physician insurance program was developed in the
state of California, it should not be administered by the Medical
Board of California but by another branch of the state. (If
administered by the Medical Board of California, there may be
perceived a conflict of interest if the Board must determine whether
to take disciplinary action against a licensee to who it has
provided medical malpractice insurance.)"
SUPPORT AND OPPOSITION:
Support:
California Medical Association (Co-Sponsor)
Medical Board of California (Co-Sponsor)
Opposition:
None received as of April 14, 2010.
Consultant:Bill Gage