Medical Board Bill Eliminates Disciplinary ‘Cost Recovery,’ Raises Physician Licensing Fees
[Posted 11/17/05]

The Medical Board of California will no longer be able to coerce physicians into settlements with threats that they could be held financially liable for the cost of an investigation if they choose to exercise their due process rights and bring their case to hearing. The medical board reauthorization bill (SB 231) recently signed by Governor Schwarzenegger eliminates the medical board’s authority to charge physicians for investigation costs in disciplinary cases. CMA has been advocating for this change for more than 10 years.

“CMA has long believed that cost recovery inappropriately inhibits a physician’s right to pursue a defense vigorously, and this is a significant victory,” says CMA President Michael Sexton, M.D. “The bill allows the board to recoup lost revenue through increased licensing fees. Spreading the costs among all physicians will protect innocent ones who are forced to settle cases under the threat of huge financial penalties if some form of discipline is eventually imposed.”

The medical board has also been authorized to raise the biannual licensing fees from $600 to $790, an increase of 32 percent. (For comparison, California attorneys pay $780 in licensing fees every two years.) After many failed attempts to raise physician-licensing fees, the medical board was able to convince the legislature that increasing fixed costs would lead to a budget deficit within 2 years. CMA was, however, able to reduce the board’s proposed fee increase from $300 to $190.

This law follows a biased but highly publicized “audit” of the Medical Board Enforcement Program, which alleged that consumer protection was at significant risk if the board didn’t receive additional funds and adopt a wide variety of suspect “reforms.” Despite this hostile environment, CMA was able to remove most physician-unfriendly provisions from the reauthorization bill.

CMA was able to negotiate for, among other things:

Increased Funds for the Diversion Program: Some of the fee increase will go to enhance the medical board’s Diversion Program, which monitors physicians with chemical dependencies or mental health problems. This important program has been seriously underfunded for years.

An Audit of the Medical Board: The medical board will undergo an independent financial audit next year so that the legislature can determine the appropriateness of the current physician licensing fee structure.

An Independent Medical Board: CMA defeated a proposal to eliminate the medical board investigation unit, and transfer to the attorney general’s staff the authority to investigate and prosecute cases of alleged physician misconduct. CMA opposed the so-called “vertical prosecution” model, which would have focused on developing a case for prosecution, rather than simply searching for the truth.

The Right to Appeal in Sacramento: CMA was also able to eliminate a provision that would have prevented most physicians from appealing a disciplinary action in Sacramento Superior Court. Physicians would have been forced to file appeals in their county, where judges can be less informed about regulatory issues and deference to state agencies is common.

Contact: Sandra Bressler, 415/882-5171 or sbressler@cmanet.org.