SENATE BILL REPORT

SB 5387

BYSenators West, Johnson, Kreidler and Vognild

Allowing hospitals to employ physicians licensed under chapters 18.57 and 18.71 RCW.

Senate Committee on Health Care & Corrections

Senate Hearing Date(s):February 8, 1989

Senate Staff:Scott Plack (786-7409)

AS OF FEBRUARY 6, 1989

BACKGROUND:

The Washington Supreme Court, in Morelli v. Ehsan (110 Wn.2d 555) has upheld the common law rule that neither a corporation nor any unlicensed person or entity may engage in the practice of medicine, surgery or dentistry through licensed employees.  The court stated that legislative intent to bar ownership of professional business by non-professionals is amply delineated by enactment of the Professional Service Corporation Act (RCW 18.100).  The act is a narrowly drawn statutory exemption to the common law rule that a corporation cannot engage in the practice of a learned profession through licensed employees unless legislatively authorized.  The health profession's Uniform Disciplinary Act also provides that unlicensed practice is defined as practicing a profession or operating a business without holding a license (RCW 18.130.020 (5)(a)).

SUMMARY:

A new section in the hospital licensure law is established. It provides that a hospital may employ physicians and in doing so shall not violate any law prohibiting the practice of medicine by unlicensed persons.

Appropriation:    none

Revenue:    none

Fiscal Note:      requested