Saturday, October 17, 2009

California Attorney General Issues Opinion On Corporate Practice Of Medicine Involving Radiology Services

On September 24, 2009, California Attorney General recently issued an Opinion reinforcing California's ban on the corporate practice of medicine with respect to radiology services. 08 Ops.Atty.Gen. 803 (2009).

The issue presented was: "whether an entity or individual who is not licensed to practice medicine in California may perform professional radiology services for a Medical Provider Network."

The phrase "professional radiology services" was deemed to include "creating, reading and interpreting radiological images, [and] related professional services such as [1] the selection of suitable radiologist, [2] the selection of a radiology site with appropriate equipment and personnel, as well as [3] collecting fees for such services."

The conclusion was: "An entity or individual not licensed to practice medicine may not perform professional radiology services, either as part of a Medical Provider Network or otherwise.We conclude that they may not."

As part of its analysis, the Attorney General Opinion "reiterate[d] [its] view that professional radiology services—specifically including the selection of a suitable radiologist, and the selection of a suitable radiology facility with appropriate equipment and personnel, as well as preparing and interpreting radiological images—involve the exercise of professional judgment as part of the practice of medicine. Unless otherwise provided by law, it is unlawful to practice or attempt to practice medicine without a license.

The Opinion restated the ban on the corporate practice of medicine: "California law establishes a general rule that a license to practice medicine may be issued only to a properly qualified person, and not to a corporate entity."

"The practice of medicine by a corporate entity, except a professional medical corporation, is prohibited because 'it is incongruous in the workings of a professional regulatory licensing scheme which is based on personal qualification, responsibility, and sanction . . . [and] the interposition of a lay commercial entity between the health professional and the patient would give rise to divided loyalties on the part of the professional and would destroy the professional relationship that is based on trust and confidence.' The ban applies to for-profit and not-for-profit corporations alike."

A copy of the Opinion 08-803 can be found at:

Attorney Comments: This opinion should be of concern for the viability of Independent Diagnostic Testing Facilities under California law and other referral or management arrangements involving radiology. This opinion is broad and there are numerous arrangements where radiologists work with entities that are not professional medical corporations for leasing equipment, technologists, and for billing and collection.

Any questions or comments should be directed to: Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers. Their website is:


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