Medicine 2000-2529.8.1Corporations
Section § 2400
This law states that corporations and similar entities can't automatically engage in professional activities. However, the Division of Licensing can allow them to hire licensed professionals on a salary basis under certain rules, especially for charitable organizations, foundations, or clinics that provide services for free.
Section § 2401
This law allows specific types of medical facilities, like university clinics, certain clinics under the Health and Safety Code, narcotic treatment programs, charitable pediatric hospitals, and critical access hospitals, to employ doctors and charge patients for certain services. However, these facilities must not interfere with the doctors' professional judgment. There are certain rules for charitable pediatric hospitals, like not significantly growing salaried staff or expanding services, ensuring care regardless of payment ability, and requiring staff agreement on employment decisions. This is all an exception to a general rule against such practices, as long as certain conditions are met.
Section § 2402
This law section states that certain rules (found in Section 2400) don't apply to medical or podiatry corporations if they follow the Moscone-Knox Professional Corporation Act, as well as any other relevant laws and regulations. As long as these corporations comply with all applicable rules, they are exempt from Section 2400.
Section § 2403
This section says that the rules in Section 2400 don't apply to certain doctors, like those in training programs or fellowships for physicians, surgeons, or podiatric medicine.
Section § 2406
This law explains that a medical or podiatry corporation can offer professional services by various healthcare professionals, such as doctors and therapists, as long as everyone involved follows specific rules and regulations. These rules are part of the Moscone-Knox Professional Corporation Act and other relevant laws. The board referred to in the act is the government agency overseeing the corporation's compliance.
Section § 2406.5
This law says that if a doctor, podiatrist, or another healthcare provider refers you to a physical therapist who works for a specific company, they must tell you that you can choose a different therapist. They also need to tell you if they have a financial interest in the company employing the therapist. This information has to be provided both in writing and verbally, in a clear way that you can understand and sign. However, this rule doesn't apply to certain doctors who work for health plans that have specific government approvals and tax exemptions.
Section § 2407
This law says that any corporation set up for medical or podiatry services must follow the rules outlined in Sections 2285 and 2415.
Section § 2408
This law section states that for a medical or podiatry corporation, each shareholder, director, and officer must be a licensed professional except for assistant secretary or assistant treasurer positions. However, a medical corporation with a sole licensed shareholder can be a shareholder in another medical corporation, and this shareholder can also serve as an officer or director in it. Despite these requirements, nonlicensed individuals are allowed to hold certain administrative titles like CEO or executive vice president in these professional corporations.
Section § 2409
If a shareholder in a medical or podiatry corporation becomes disqualified (meaning they're no longer allowed to practice medicine or podiatry), the income from their professional services can't benefit them or their shares in the corporation.
Section § 2410
This law section states that medical and podiatry corporations have to follow the same rules of professional conduct as individual licensed professionals. They can't engage in any unprofessional behavior as defined by current or future laws and regulations.
Section § 2411
This law allows medical corporations to offer and run health care service plans. These corporations can hire or make arrangements with licensed professionals in the healing arts to provide services. However, any professional services must be performed according to what the law permits.
Section § 2412
This law allows the Division of Licensing to set and enforce rules for medical or podiatry corporations. These rules can require the corporation's bylaws to specify that if a shareholder becomes disqualified or passes away, their stock must be sold back to the corporation or other shareholders. Additionally, the corporation must have insurance or other means to cover claims from patients for professional services rendered.
Section § 2413
This statute applies to medical corporations with osteopathic doctors as their leaders unless it clashes with another specific law, Section 2454.
Section § 2415
This law explains that physicians and podiatric doctors in California can practice under a made-up business name as long as they have a special permit. This permit makes sure their practice name isn't misleading and that they comply with business ownership rules. The permit must be displayed where patients can see it, and it doesn't apply to those working in state-licensed clinics or medical schools. If a doctor loses their medical license, their business name permit is also revoked. The authority to manage these permits can be delegated to specific board officials.
Section § 2416
This section of the law allows physicians, surgeons, and doctors of podiatric medicine to form partnerships or groups to practice together. A professional partnership can include both types of doctors if two conditions are met: most partners must be one of these medical professionals, and only those who are qualified can make decisions related to medical practice, though all can vote on general business matters.
Section § 2417
If the Department of Insurance finds evidence that a business is violating certain laws and might be committing insurance fraud or other related crimes, they have to report it to the right regulatory agency, which will then investigate. This law also states that doctors working with businesses they know are breaking these laws will lose their medical license permanently.
Section § 2417.5
This law targets businesses that offer or perform outpatient cosmetic procedures without proper ownership or operation structure. Specifically, if a business hires a physician to perform such procedures and that business is not properly set up under Section 2400, it's breaking the law. These cosmetic procedures are for improving looks by altering or reshaping normal body structures. However, this rule doesn't change or impact legally recognized entities already allowed to provide medical services.