LRBs0117/1
PJK&CTS:jld&kjf:jf
2005 - 2006 LEGISLATURE
ASSEMBLY SUBSTITUTE AMENDMENT 1,
TO 2005 ASSEMBLY BILL 259
May 17, 2005 - Offered by Representative Gielow.
AB259-ASA1,1,4
1An Act to amend 448.08 (4), 655.001 (7t), 655.005 (2t), 655.23 (5m) and 655.27
2(3) (a) 4.; and
to create 448.03 (2) (o) and 655.002 (1) (em) of the statutes;
3relating to: provider organizations subject to health care liability
4requirements and the formation of limited liability companies by physicians.
Analysis by the Legislative Reference Bureau
Under current law, certain health care providers are required to carry health
care liability insurance with liability limits of at least $1,000,000 for each occurrence
and at least $3,000,000 for all occurrences in a policy year. If a medical malpractice
claim against a health care provider who is subject to the health care liability
insurance requirements exceeds the limits of the provider's health care liability
insurance, the injured patients and families compensation fund pays the portion of
the claim that exceeds the limits. The injured patients and families compensation
fund is funded by assessments paid by the health care providers who are subject to
the health care liability requirements.
Health care providers who are currently subject to the health care liability
requirements include physicians, nurse anesthetists, partnerships composed of
physicians or nurse anesthetists, corporations that operate for the primary purpose
of providing the medical services of physicians or nurse anesthetists, cooperative
sickness care associations, and such entities as hospitals, ambulatory surgery
centers, and nursing homes whose operations are combined as a single entity with
a hospital. This substitute amendment adds, as another type of health care provider
that is subject to the health care liability requirements, any organization or
enterprise organized and operated in this state for the primary purpose of providing
the medical services of physicians or nurse anesthetists.
Also under current law, a limited liability company may be formed for any
lawful purpose. The attorney general, however, has opined that current law
prohibits physicians from practicing medicine as employees of a business entity
other than a service corporation. 75 Op. Att'y Gen. 200 (1986). Current law allows
physicians and certain other professionals to organize and own shares in a service
corporation if all of the shareholders hold the same professional licensure or
certification. A service corporation may own, operate, and maintain an
establishment and may serve the convenience of its shareholders in carrying on their
profession.
The attorney general's opinion is based upon interpretations of two provisions
in current law. First, current law prohibits a person from engaging in the practice
of medicine and surgery unless the person has been granted a license by the Medical
Examining Board, but a business entity is not itself capable of satisfying the
requirements for obtaining a license to practice medicine. In the opinion of the
attorney general, if a business entity employs a physician to provide professional
services, the entity is itself engaged in the practice of medicine.
Second, current law prohibits a physician from compensating another in
exchange for patient referrals. In the opinion of the attorney general, this provision
prohibits an arrangement in which a physician receives patients through the
physician's employment with a business entity and the business entity receives
payment for the physician's services.
This substitute amendment specifies that the requirement for a license to
practice medicine and surgery does not apply to a limited liability company if: 1) the
company is organized to own, operate, and maintain an establishment and otherwise
serve the convenience of its members; 2) all the members of the company are licensed
to practice medicine and surgery; and 3) professional services are rendered only by
persons who are licensed to practice medicine and surgery. The substitute
amendment also specifies that it is lawful for a limited liability company that meets
the requirements specified above to render a bill in the name of the company, if the
bill identifies each physician for whose services the bill is rendered. As a result, a
physician may engage in the practice of medicine as an employee of a limited liability
company organized and controlled by physicians.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB259-ASA1,3,3
1448.03
(2) (o) A limited liability company organized under ch. 183 to own,
2operate, and maintain an establishment and otherwise serve the convenience of its
3members, but only if all of the following are true:
AB259-ASA1,3,44
1. All members of the company are licensed under sub. (1) (a).
AB259-ASA1,3,65
2. Professional services are rendered only by persons who are licensed under
6sub. (1) (a).
AB259-ASA1,3,168
448.08
(4) Professional partnerships
and, corporations , and companies
9permitted. Notwithstanding any other provision in this section, it is lawful for 2 or
10more physicians, who have entered into a bona fide partnership for the practice of
11medicine, to render a single bill for such services in the name of such partnership,
12and it also is lawful for a service corporation
or a limited liability company organized
13under ch. 183 to render a single bill for services in the name of the corporation
or
14company, provided that each individual licensed, registered or certified under this
15chapter or ch. 446, 449, 450, 455, 457 or 459 that renders billed services is
16individually identified as having rendered such services.
AB259-ASA1,3,2218
655.001
(7t) "Health care practitioner" means a health care professional, as
19defined in s. 180.1901 (1m), who is an employee of a health care provider described
20in s. 655.002 (1) (d), (e),
(em), or (f) and who has the authority to provide health care
21services that are not in collaboration with a physician under s. 441.15 (2) (b) or under
22the direction and supervision of a physician or nurse anesthetist.
AB259-ASA1, s. 4
23Section
4. 655.002 (1) (em) of the statutes is created to read:
AB259-ASA1,4,3
1655.002
(1) (em) Any organization or enterprise not specified under par. (d) or
2(e) that is organized and operated in this state for the primary purpose of providing
3the medical services of physicians or nurse anesthetists.
AB259-ASA1,4,65
655.005
(2t) Subsection (2) does not affect the liability of a health care provider
6described in s. 655.002 (1) (d), (e)
, (em), or (f) for the acts of its employees.
AB259-ASA1,4,108
655.23
(5m) The limits set forth in sub. (4) shall apply to any joint liability of
9a physician or nurse anesthetist and his or her corporation
or, partnership
, or other
10organization or enterprise under s. 655.002 (1) (d)
or
, (e)
, or (em).
AB259-ASA1, s. 7
11Section
7. 655.27 (3) (a) 4. of the statutes is amended to read:
AB259-ASA1,4,1512
655.27
(3) (a) 4. For a health care provider described in s. 655.002 (1) (d), (e)
,
13(em), or (f), risk factors and past and prospective loss and expense experience
14attributable to employees of that health care provider other than employees licensed
15as a physician or nurse anesthetist.
AB259-ASA1,4,1917
(1)
Organizations subject to insurance requirements. The treatment of
18sections 655.001 (7t), 655.002 (1) (em), 655.005 (2t), 655.23 (5m), and 655.27 (3) (a)
194. of the statutes first applies to all of the following:
AB259-ASA1,4,2020
(a) Policies issued or renewed on the effective date of this paragraph.
AB259-ASA1,4,2221
(b) Claims made under policies issued or renewed on the effective date of this
22paragraph.
AB259-ASA1, s. 9
23Section
9.
Effective dates. This act takes effect on the day after publication,
24except as follows:
AB259-ASA1,5,4
1(1)
Organizations subject to insurance requirements. The treatment of
2sections 655.001 (7t), 655.002 (1) (em), 655.005 (2t), 655.23 (5m), and 655.27 (3) (a)
34. of the statutes and
Section 8 (1) of this act take effect on September 30, 2005, or
4on the day after publication, whichever is later.
