BILL ANALYSIS
SB 726
Page 1
Date of Hearing: August 27, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
SB 726 (Ashburn) - As Amended: August 20, 2009
Policy Committee: Business &
Professions Vote: 10-0
Health 14-1
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill extends and modifies an exception to the Corporate
Practice of Medicine (CPM) statutes for specified health
facilities from 2011 until January 1, 2018. CPM prohibits health
facilities from hiring physicians in most settings.
Specifically, this bill:
1)Extends a CPM exception established by SB 376 (Chesbro),
Chapter 411, Statutes of 2003. SB 376 authorized participating
district hospitals to hire up to two physicians each. Defines
and specifies eligibility for qualified district health care
facilities. Adds qualified rural hospitals to the CPM
exception established by SB 376. Defines qualified rural
hospitals.
2)Authorizes participating hospitals to hire between two and
five physicians depending on a showing of need.
3)Establishes parameters for hospitals to certify with the
Medical Board of California the need to recruit physicians due
to work force shortages.
4)Requires the MBC to report to the Legislature by July 1, 2016
about the impact of this bill.
FISCAL EFFECT
Absorbable workload to the MBC to continue oversight of
physicians practicing in California and to complete the impact
report by 2016.
SB 726
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COMMENTS
1)Rationale . This bill establishes exceptions to CPM statutes
to provide specified district health care facilities and
rural hospitals with additional support to recruit and retain
medical staff. According to the author and supporters, health
professional workforce issues are exacerbated in many areas
statewide, including rural areas, due to low reimbursement by
public payers such as Medi-Cal and Medicare and the higher
concentration of low-income, uninsured, and elderly patients
in many rural communities. Up to approximately 60 of
California's 400 hospitals could qualify for the exceptions
established in this bill. In addition to health care district
or rural status, health care facilities must also meet
designations related to medically underserved or health
professional shortage areas.
2)Recent amendments address several technical issues with
regard to the definition of a rural hospital and the
confidentiality of physician recruitment information.
3)The Corporate Practice of Medicine refers to prohibitions in
California law that ban the direct employment of physicians
by hospitals and health care facilities. California's
prohibitions in this area are some of the strongest in the
country. Current law makes exceptions for employment of
doctors by UC medical centers, county hospitals, some
community clinics, and some non-profit organizations. Current
law contains several other specific exemptions to CPM.
4)Related Legislation
a) AB 646 (Swanson) and AB 648 (Chesbro) in the current
session each also establish exceptions to CPM statutes.
Each bill failed passage in the Senate Business and
Professions Committee.
b) AB 1944 (Swanson), SB 1294 (Ducheny), and SB 1640
(Ashburn) in 2008 each addressed modifications of CPM and
hiring of physicians. AB 1944 failed passage in the Senate
Health Committee, SB 1294 failed passage in the Assembly
Appropriations Committee, and SB 1640 failed passage in the
Assembly Business and Professions Committee.
SB 726
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c) SB 376 (Chesbro), Chapter 411, Statutes of 2003
established a pilot project to authorize district hospitals
to hire up to two physicians. The MBC has had difficulty
evaluating SB 376 because of the low number of physicians
who were hired. SB 376 expires in 2011.
Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081