BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 2024 (Wood) - Critical access hospitals: employment
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|Version: June 9, 2016 |Policy Vote: B., P. & E.D. 8 - |
| | 0, HEALTH 8 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 1, 2016 |Consultant: Brendan McCarthy |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 2024 would provide an exemption from the ban on the
corporate practice of medicine to allow federally certified
critical access hospitals to directly employ physicians until
January 1, 2024.
Fiscal
Impact:
Potential one-time costs of $70,000 to develop information
technology systems to collect specified data from
participating hospitals by the Office of Statewide Health
Planning and Development (California Health Data Planning
Fund).
Potential ongoing costs of $130,000 per year to develop data
standards for reporting by participating hospitals, collect
and review data submitted by participating hospitals, and
eventually develop the required report (California Health Data
Planning Fund).
AB 2024 (Wood) Page 1 of
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Background: Current law includes a prohibition on corporations or similar
entities from employing physicians and billing patients for care
provided by employed physicians. This is referred to as the ban
on the corporate practice of medicine. Current law provides for
several exemptions from the ban on the corporate practice of
medicine - for example clinics and hospitals primarily engaged
in medical education, narcotic treatment programs, and others.
Critical access hospitals are general acute care hospitals in
rural areas that meet specified federal criteria. Critical
access hospitals are eligible for higher normal reimbursement
from Medicare, in order to ensure that these hospitals can
remain financially viable. There are 34 critical access
hospitals in California.
Proposed Law:
AB 2024 would provide an exemption from the ban on the
corporate practice of medicine to allow federally certified
critical access hospitals to directly employ physicians until
January 1, 2024.
In order to receive the exemption from the ban on the corporate
practice of medicine, the medical staff of a participating
critical access hospital must affirm that employment is in the
community's interest and the hospital must not interfere with a
physician's professional judgement.
The bill would require the Office of Statewide Health Planning
and Development to report to the Legislature by July 1, 2023 on
the bill's impact on critical access hospitals and their ability
to recruit and retain physicians.
Related
Legislation: There have been many bills in recent years that
have attempted to provide additional exemptions from the ban on
the corporate practice of medicine.
AB 2024 (Wood) Page 2 of
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Staff
Comments: The cost estimates developed by the Office of
Statewide Health Planning and Development assume that the office
will develop an information technology system that will allow
hospitals to directly submit data on physician employment,
recruiting, and retention. In addition, the Office indicates
that it will incur additional staff work to compile and analyze
that information for inclusion in the required report.
Staff notes that creating an information technology system and
committing ongoing staff to analyzing what will likely be a very
limited data set from participating hospitals seems to be an
inefficient use of state resources.
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