California Law
The California The Medical Practice Act, Business and Professions Code section 2052, provides: "Any person who practices or attempts to practice, or who holds himself or herself out as practicing... without having at the time of so doing a valid, unrevoked, or unsuspended certificate...is guilty of a public offense."
Business and Professions Code section 2400, within the Medical Practice Act, provides in pertinent part: "Corporations and other artificial entities shall have no professional rights, privileges, or powers."
There are some exceptions; for example: professional medical corporations, University of California hospitals, county hospitals, narcotic treatment programs, some nonprofit organizations such as community clinics, and Knox-Keene-licensed HMOs are allowed to employ physicians directly.
California Health & Safety Code section 1206(I) exempts from licensure clinics operated by a nonprofit corporation (such as a medical foundation) if they meet certain requirements, including conducting medical research and health education, and providing medical care through a group of 40 or more independent contractor physicians and surgeons. The foundation's board must consist of physician, hospital and local community representatives, with affiliated physicians making up no more than 20 percent of the board's members.
It is for these reasons that organizations such as the Cedars-Sinai Medical Center restructured in 1994 to become the Cedars-Sinai Health System, comprising the Cedars-Sinai Medical Care Foundation, Physician-Hospital Organization and Cedars-Sinai Medical Center."
Read more about this topic: Non-profit Hospital
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