FACT BRIEFDo most states allow hospitals to directly employ physicians?
YES
In all but a handful of states — including California, Ohio and Texas — hospitals are permitted under state law to employ physicians directly, as opposed to using them as independent contractors for outpatient care.
On June 3, Gov. Joe Lombardo vetoed AB11, which would have made Nevada the sixth state to prohibit the employment of physicians by hospitals. The bill was passed by the Senate and Assembly with limited bipartisan support.
According to a report by the American Medical Association, 2020 was the first year in which fewer than half (49.1%) of physicians worked in private practice. Another report from the Physicians Advocacy Institute found that the percentage of employed physicians grew rapidly during the pandemic because of the increasing overhead costs of private practice.
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Sources
Texas Secretary of State Texas Administrative Code RULE §177.17 Exceptions to Corporate Practice of Medicine Doctrine
Ohio Laws & Administrative Rules Ohio Revised Code Section 4731.228 | Termination of physician's employment with a health care entity
California Hospital Association California’s Ban on Physician Employment by Hospitals
Nevada Legislature Veto Message AB11
Health Leaders California Hospitals Fight for Right to Hire Doctors
Physicians Advocacy Institute COVID-19’s Impact On Acquisitions of Physician Practices and Physician Employment 2019-2020 (page 6)
American Medical Association Recent Changes in Physician Practice Arrangements: Private Practice Dropped to Less Than 50 Percent of Physicians in 2020
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