BILL ANALYSIS
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THIRD READING
Bill No: AB 2566
Author: Carter (D), et al
Amended: As introduced
Vote: 21
SENATE BUSINESS, PROF. & ECON. DEVELOP. COM. : 6-0, 6/21/10
AYES: Negrete McLeod, Aanestad, Calderon, Correa, Florez,
Walters
NO VOTE RECORDED: Wyland, Oropeza, Yee
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 74-0, 4/29/10 - See last page for vote
SUBJECT : Practice of medicine: cosmetic surgery:
employment of
physicians and surgeons
SOURCE : American Society of Dermatologic Surgery
Association
DIGEST : This bill provides that a business entity that
offers cosmetic procedures in violation of the corporate
practice of medicine prohibition and contracts with a
physician and surgeon for the provision of those services
is guilty of knowingly making or causing to be made a false
or fraudulent claim for payment of a health care benefit.
Also states that this provision is declaratory of existing
law.
CONTINUED
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ANALYSIS : Existing law:
1.Requires any person who practices medicine to hold a
valid certificate to practice medicine. Establishes the
Medical Board of California (MBC) to license and certify
physicians and surgeons.
2.Prohibits corporations and other artificial legal
entities from having any medical professional rights,
privileges, or powers (known as the "prohibition against
the corporate practice of medicine.") However, further
provides that the MBC may, pursuant to regulations it has
adopted, grant approval for the employment of physicians
and surgeons on a salary basis by a licensed charitable
institution, foundation, or clinic if no charge for
professional services rendered to patients is made by
that institution, foundation, or clinic. Provides other
certain exceptions to the prohibition against the
corporate practice of medicine.
3.Makes it unprofessional conduct for any licensee to
violate or attempt to violate, to assist in or abet the
violation of, or to conspire to violate the prohibition
against the Corporate Practice of Medicine Prohibition
(CPM). Requires the MBC to take action against any
licensee who is charged with unprofessional conduct.
Specifies the types of actions that constitute
unprofessional conduct.
4.Requires the MBC in conjunction with the Board of
Registered Nursing (BRN), and in consultation with the
Physician Assistant Committee (PAC) and professionals in
the field, to review issues and problems relating to the
use of laser or intense light pulse devices for elective
cosmetic procedures by physicians and surgeons, nurses,
and physician assistants.
5.Specifies that the review conducted by the MBC, the BRN
and the PAC shall include the appropriate level of
physician supervision needed, the appropriate level of
training to ensure competency, guidelines for
standardized procedures and protocols that address
patient selection, education, instruction and informed
consent, use of topical agents, and procedures to be
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followed in the event of complications or side effects
from treatment and procedures for governing emergency and
urgent care situations.
6.Requires the MBC and the BRN to promulgate regulations to
implement changes determined to be necessary with regard
to the use of laser or intense pulse light devices for
elective cosmetic procedures by physicians and surgeons,
nurses and physicians assistants.
7.Makes it unlawful to knowingly make or cause to be made
any false or fraudulent claim for payment of a health
care benefit.
8.Defines cosmetic surgery for purposes of health insurance
and health plan coverage as any surgery that is performed
to alter or reshape normal structures of the body in
order to improve the patient's appearance.
This bill:
1.Makes a business organization that offers to provide, or
provides, outpatient elective cosmetic procedures or
treatments, that is owned or operated in violation of the
corporate practice of medicine prohibition, and that
contracts with, or employs, a physician and surgeon for
the provision of outpatient elective cosmetic medical
procedures or treatments that may only be provided by a
holder of a physician and surgeon's certificate, is
guilty of a violation of the prohibition against
knowingly making or causing to be made any false or
fraudulent claim for payment of a health care benefit.
States that these provisions are declaratory of existing
law.
2.Defines outpatient elective cosmetic medical procedures
or treatments as medical procedures or treatments that
are performed to alter or reshape normal structures of
the body in order to improve appearance.
Background
Penalties for violations of the provisions of this bill .
The provisions of this bill would make a business
organization that enters into a contract with a physician
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and surgeon in the provision of medical services in
violation of the corporation practice of medicine
prohibition guilty of violating the prohibition against
knowingly making or causing to be made any false or
fraudulent claim for the payment of a health care benefit.
The appropriate penalties depend on the amount of the claim
at issue. Generally, for claims that exceed $950, the
offense is punishable by imprisonment in state prison for
2, 3, or 5 years, or by a fine not to exceed $50,000, or
both. When the amount or claim is $950 or less, the
offense is punishable by imprisonment in a county jail not
to exceed 6 months, or by a fine of not more than $1,000 or
both fine and imprisonment. The MBC and local law
enforcement agencies, including deputy district attorney,
city attorney could take action against any entity that
violates the provisions of this measure.
Popularity of cosmetic procedures . Newspaper articles
provided by the Sponsor claims that the number of Americans
undergoing cosmetic procedures, including chemical peels,
laser procedures, Botox shots, and wrinkle-filler
injections continue to rise. According to the American
Society of Plastic Surgeons' (ASPS) website, there were
12.5 million cosmetic surgeries performed in the United
States in 2009, down 1 percent from 2008, and a 69 percent
increase since 2000. The ASPS indicates that the top five
surgical procedures were breast augmentation, nose
reshaping, eyelid surgery, liposuction, and tummy tuck.
Moreover, ASPS points out that minimally-invasive cosmetic
procedures rose to nearly 11 million procedures in 2009.
The top five minimally-invasive procedures were Botox, soft
tissue fillers, chemical peel, microdermabrasion, and laser
hair removal.
Medical Spas . The increasing popularity of cosmetic
procedures or treatments, and the lucrative business they
offer have given rise to a new model of providing cosmetic
services outside the traditional physician settings and
into malls and local spas. Medical spas or popularly known
as "medspas" are increasingly becoming the destination for
various cosmetic procedures or treatments.
Recognizing the growing popularity of medical spas, the MBC
has posted on its website a fact sheet. The fact sheet
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indicates that "medical spas are marketing vehicles for
medical procedures. If they are offering medical
procedures, they must be owned by physicians. The use of
the term 'medical spa' is for advertising purposes to make
the procedures seem more appealing. In reality, however,
it is the practice of medicine. There is no harm in
seeking pampering or in wanting to look better. A visit to
a spa may provide a needed respite from our stressful
lives, and treatments that make us look better often make
us feel better. The MBC, however, is concerned when
medicine is being marketed like a pedicure, and consumers
are led to believe that being injected, lasered, and
resurfaced requires no more thought than changing hair
color. According to the MBC's fact sheet, cosmetologists,
while licensed professionals and highly qualified in
superficial treatments such as facials and
microdermabrasion, may never inject the skin, use lasers,
or perform medical-level dermabrasion or skin peels. Those
types of treatments must be performed by qualified medical
personnel. In California, that means a physician, or a
registered nurse or physician's assistant under the
supervision of a physician. Patients must know the
qualifications of persons to whom they are entrusting their
health. Those seeking cosmetic procedures or treatments
should know that the person performing them is medically
qualified and experienced."
Corporate Practice of Medicine Prohibition . According to
the MBC's website, medical spas that offer medical
procedures or treatments involve the practice of medicine
and must be performed and owned by physicians. The CPM
doctrine generally prohibits corporations or other entities
that are not controlled by physicians from practicing
medicine to ensure that lay persons are not controlling or
influencing the professional judgment and practice of
medicine by licensed physicians and surgeons. In an effort
to ensure medical spas are not violating the CPM doctrine,
one of the recommendations put forth by the MBC and BRN is
to give a higher priority to the investigation of corporate
practice of medicine violations in the medical spa clinics
or other settings using laser or intense pulse light
devices and the re-establishment of the Operation Safe
Medicine Unit within the MBC.
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FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 8/3/10)
American Society of Dermatologic Surgery Association
(source)
American Academy of Dermatology Association
American Academy of Facial Plastic and Reconstructive
Surgery
American Academy of Otolaryngology-Head and Neck Surgery
American Medical Association
American Society of Plastic Surgeons
California Academy of Physician Assistants
California Society of Dermatology and Dermatologic Surgery
Massachusetts Medical Society
Medical Board of California
Osteopathic Physicians and Surgeons of California
ARGUMENTS IN SUPPORT : The American Society for
Dermatologic Surgery Association (ASDSA) states this bill
will provide the MBC and other consumer protection agencies
with enhanced enforcement tools needed to effectively
prosecute well-resourced business entities engaged in the
unlawful practice of medicine through exotic, complicated,
and illegal arrangements with "employed" or "contracted"
physicians. ASDSA points out that penalties found in
existing law are relatively paltry in relation to the money
being fraudulently obtained from patients and are
disregarded as the "cost of doing business" in the largely
cash-only field. The penalties proposed in this bill will
be more proportionate to the risks to which patients are
exposed.
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Beall, Bill
Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield,
Bradford, Brownley, Buchanan, Charles Calderon, Carter,
Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon,
DeVore, Emmerson, Eng, Evans, Feuer, Fletcher, Fong,
Fuentes, Fuller, Furutani, Gaines, Galgiani, Garrick,
Gilmore, Hagman, Hall, Harkey, Hayashi, Hernandez, Hill,
Huber, Huffman, Jeffries, Knight, Lieu, Logue, Ma,
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Mendoza, Miller, Monning, Nava, Nestande, Niello,
Nielsen, Norby, V. Manuel Perez, Portantino, Ruskin,
Salas, Saldana, Silva, Skinner, Smyth, Solorio, Audra
Strickland, Swanson, Torlakson, Torres, Tran, Villines,
Yamada, John A. Perez
NO VOTE RECORDED: Bass, Caballero, Jones, Bonnie Lowenthal,
Torrico, Vacancy
JA:nl 8/3/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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