Ok, well that's something I didn't know was a thing. Thank you for the information 2buck. Is this the case in any other states?
California.
From the medical board.
“Corporate Practice of Medicine
The following is to provide guidance to physicians on the prohibition against the corporate practice of medicine. Corporate law can be complicated and it is encouraged that licensee’s discuss their medical practices and business enterprises with knowledgeable legal counsel that specializes in this area of practice.
Listed below are the most frequently inquired topics in regards to corporate practice of medicine.
Business and Professions Code (BPC), section 2052, states: "Any person who practices or attempts to practice, or who holds himself or herself out as practicing...[medicine] without having at the time of so doing a valid, unrevoked, or unsuspended certificate...is guilty of a public offense."
BPC, section 2400, states, in part: "Corporations and other artificial entities shall have no professional rights, privileges, or powers." This section of the law is intended to prevent unlicensed persons from interfering with, or influencing, the physician’s professional judgment.
The decisions described below are examples of some of the types of behaviors and subtle controls that the corporate practice doctrine is intended to prevent. From the Medical Board of California’s perspective, the following health care decisions should be made by a physician licensed in the State of California and would constitute the unlicensed practice of medicine if performed by an unlicensed person:
- Determining what diagnostic tests are appropriate for a particular condition;
- Determining the need for referrals to, or consultation with, another physician/specialist;
- Responsibility for the ultimate overall care of the patient, including treatment options available to the patient; and
- Determining how many patients a physician must see in a given period of time or how many hours a physician must work.
In addition, the following "business" or "management" decisions and activities, resulting in control over the physician's practice of medicine, should be made by a licensed California physician and not by an unlicensed person or entity:
- Ownership is an indicator of control of a patient's medical records, including determining the contents thereof, and should be retained by a California-licensed physician;
- Selection, hiring/firing (as it relates to clinical competency or proficiency) of physicians, allied health staff and medical assistants;
- Setting the parameters under which the physician will enter into contractual relationships with third-party payers;
- Decisions regarding coding and billing procedures for patient care services; and
- Approving of the selection of medical equipment and medical supplies for the medical practice.
The types of decisions and activities described above cannot be delegated to an unlicensed person, including (for example) management service organizations. While a physician may consult with unlicensed persons in making the "business" or "management" decisions described above, the physician must retain the ultimate responsibility for, or approval of, those decisions.
The following types of medical practice ownership and operating structures also are prohibited:
- Non-physicians owning or operating a business that offers patient evaluation, diagnosis, care and/or treatment;
- Physician(s) operating a medical practice as a limited liability company, a limited liability partnership, or a general corporation;
- Management service organizations arranging for, advertising, or providing medical services rather than only providing administrative staff and services for a physician's medical practice (non-physician exercising controls over a physician's medical practice, even where physicians own and operate the business); and
- A physician acting as "medical director" when the physician does not own the practice. For example, a business offering spa treatments that include medical procedures such as Botox injections, laser hair removal, and medical microdermabrasion, that contracts with or hires a physician as its "medical director."
In the examples above, non-physicians would be engaged in the unlicensed practice of medicine, and the physician may be aiding and abetting the unlicensed practice of medicine.
It is important to note that pursuant to BPC, section 2417.5, a business organization that offers to provide, or provides, outpatient elective cosmetic medical procedures or treatments that is not in compliance with the ban on the corporate practice of medicine is guilty of knowingly making or causing to be made a false or fraudulent claim for payment of a health care benefit pursuant to paragraph (6) of subdivision (a) of Section 550 of the Penal Code.“
Anesthesiologists in California can be employed in multiple different ways. This document will attempt to simplify the different models into 3 categories. Employee Physicians can be employees in California if they join a medical group. These can be small anesthesia practices, functioning under a...
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