S.B. 18

1

HEALTH CARE PROVIDER PRACTICE AND
2 CONDUCT AMENDMENTS
3 1997 GENERAL SESSION
4 STATE OF UTAH
5 Sponsor: Robert F. Montgomery
6 AN ACT RELATING TO HEALTH; CLARIFYING ACTIONS THAT ARE UNLAWFUL
7 INVOLVEMENT IN A PHYSICIAN'S OR HEALTH CARE PROVIDER'S INDEPENDENT
8 JUDGMENT, AND ACTIONS THAT ARE NOT UNLAWFUL INVOLVEMENT; AND
9 PROVIDING PARALLEL LANGUAGE IN THE INSURANCE CODE.
10 This act affects sections of Utah Code Annotated 1953 as follows:
11 AMENDS:
12 31A-4-106, as last amended by Chapter 20, Laws of Utah 1995
13 58-67-102, as enacted by Chapter 248, Laws of Utah 1996
14 58-67-501, as enacted by Chapter 248, Laws of Utah 1996
15 58-68-102, as enacted by Chapter 248, Laws of Utah 1996
16 58-68-501, as enacted by Chapter 248, Laws of Utah 1996
17 Be it enacted by the Legislature of the state of Utah:
18 Section 1. Section 31A-4-106 is amended to read:
19 31A-4-106. Provision of health care.
20 (1) As used in this section, "health care provider" has the same definition as in Section
21 78-14-3.
22 [(1)] (2) Except under Subsection [(2)] (3) or [(3)] (4), no person may directly or indirectly
23 provide health care, or arrange for, manage, or administer the provision or arrangement of, collect
24 advance payments for, or compensate providers of health care unless authorized to do so or
25 employed by someone authorized to do so under Chapter 5, 7, 8, 9, or 14.
26 [(2)] (3) Subsection [(1)] (2) does not apply to:
27 (a) a natural person or professional corporation that alone or with others professionally

1 associated with him or it, and without receiving consideration for services in advance of the need
2 for a particular service, provides the service personally with the aid of nonprofessional assistants;
3 (b) a health care facility as defined in Section 26-21-2 which is licensed or exempt from
4 licensing under Title 26, Chapter 21, and which does not engage in health care insurance as
5 defined under Subsection 31A-1-301(35);
6 (c) a person who files with the commissioner under Section 31A-1-105 a certificate from
7 the United States Department of Labor, or other evidence satisfactory to the commissioner,
8 showing that the laws of Utah are preempted under Section 514 of the Employee Retirement
9 Income Security Act of 1974 or other federal law;
10 (d) a person licensed under Chapter 23 who has arranged for the insurance of all services
11 under Subsection [(1)] (2) by an insurer authorized to do business in Utah, or under Section
12 31A-15-103, or who works for an uninsured employer that complies with Chapter 13; or
13 (e) an employer that self-funds its obligations to provide health care services or indemnity
14 for its employees, provided the employer complies with Chapter 13.
15 [(3) No] (4) A person may not provide administrative or management services for any
16 other person subject to Subsection [(1)] (2) and not exempt under Subsection [(2)] (3) unless the
17 person is an authorized insurer under Chapter 5, 7, 8, 9, or 14, or complies with Chapter 25.
18 (5) It is unlawful for any insurer or person providing, administering, or managing health
19 care insurance under Chapter 5, 7, 8, 9, or 14 enter into a contract that limits a health care
20 provider's responsibility to advise the health care provider's patients or clients fully about treatment
21 options or other issues that affect the health care of the health care provider's patients or clients.
22 Section 2. Section 58-67-102 is amended to read:
23 58-67-102. Definitions.
24 In addition to the definitions in Section 58-1-102, as used in this chapter:
25 (1) "Administrative penalty" means a monetary fine imposed by the division for acts or
26 omissions determined to constitute unprofessional or unlawful conduct, as a result of an
27 adjudicative proceeding conducted in accordance with Title 63, Chapter 46b, Administrative
28 Procedures Act.
29 (2) "ACGME" means the Accreditation Council for Graduate Medical Education of the
30 American Medical Association.
31 (3) "Board" means the Physician's Licensing Board created in Section 58-67-201.

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1 (4) "Diagnose" means:
2 (a) to examine in any manner another person, parts of a person's body, substances, fluids,
3 or materials excreted, taken, or removed from a person's body, or produced by a person's body, to
4 determine the source, nature, kind, or extent of a disease or other physical or mental condition;
5 (b) to attempt to conduct an examination or determination described under Subsection
6 (4)(a);
7 (c) to hold oneself out as making or to represent that one is making an examination or
8 determination as described in Subsection (4)(a); or
9 (d) to make an examination or determination as described in Subsection (4)(a) upon or
10 from information supplied directly or indirectly by another person, whether or not in the presence
11 of the person making or attempting the diagnosis or examination.
12 (5) "LCME" means the Liaison Committee on Medical Education of the American
13 Medical Association.
14 (6) "Medical assistant" means an unlicensed individual working under the direct and
15 immediate supervision of a licensed physician and surgeon and engaged in specific tasks assigned
16 by the licensed physician and surgeon in accordance with the standards and ethics of the
17 profession.
18 (7) "Physician" means both physicians and surgeons licensed under Section 58-67-301,
19 Utah Medical Practice Act, and osteopathic physicians and surgeons licensed under Section
20 58-68-301, Utah Osteopathic Medical Practice Act.
21 (8) "Practice of medicine" means:
22 (a) to diagnose, treat, correct, or prescribe for any human disease, ailment, injury,
23 infirmity, deformity, pain or other condition, physical or mental, real or imaginary, or to attempt
24 to do so, by any means or instrumentality, and by an individual in Utah or outside the state upon
25 or for any human within the state;
26 (b) when a person not licensed as a physician directs a licensee under this chapter to
27 withhold or alter the health care services that the licensee has ordered, but practice of medicine
28 does not include any conduct under Subsection 58-67-501(2);
29 (c) to maintain an office or place of business for the purpose of doing any of the acts
30 described in Subsection (8)(a) whether or not for compensation; or
31 (d) to use, in the conduct of any occupation or profession pertaining to the diagnosis or

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1 treatment of human diseases or conditions in any printed material, stationery, letterhead,
2 envelopes, signs, or advertisements, the designation "doctor", "doctor of medicine", "physician",
3 "surgeon", "physician and surgeon", "Dr.," "M.D.," or any combination of these designations in
4 any manner which might cause a reasonable person to believe the individual using the designation
5 is a licensed physician and surgeon, and if the party using the designation is not a licensed
6 physician and surgeon, the designation must additionally contain the description of the branch of
7 the healing arts for which the person has a license.
8 (9) "Prescription drug or device" means:
9 (a) a drug or device which, under federal law, is required to be labeled with either of the
10 following statements or their equivalent:
11 (i) "CAUTION: Federal law prohibits dispensing without prescription"; or
12 (ii) "CAUTION: Federal law restricts this drug to use by or on the order of a licensed
13 veterinarian"; or
14 (b) a drug or device that is required by any applicable federal or state law or rule to be
15 dispensed on prescription only or is restricted to use by practitioners only.
16 (10) "SPEX" means the Special Purpose Examination of the Federation of State Medical
17 Boards.
18 (11) "Unlawful conduct" is as defined in Sections 58-1-501 and 58-67-501.
19 (12) "Unprofessional conduct" is as defined in Sections 58-1-501 and 58-67-502, and as
20 may be further defined by division rule.
21 Section 3. Section 58-67-501 is amended to read:
22 58-67-501. Unlawful conduct.
23 (1) "Unlawful conduct" includes, in addition to the definition in Section 58-1-501:
24 [(1)] (a) buying, selling, or fraudulently obtaining, any medical diploma, license,
25 certificate, or registration; [and]
26 [(2)] (b) aiding or abetting the buying, selling, or fraudulently obtaining of any medical
27 diploma, license, certificate, or registration[.];
28 (c) substantially interfering with a licensee's lawful and competent practice of medicine
29 in accordance with this chapter by:
30 (i) any person or entity that manages, owns, operates, or conducts a business having a
31 direct or indirect financial interest in the licensee's professional practice; or

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1 (ii) anyone other than another physician licensed under this title, who is engaged in direct
2 clinical care or consultation with the licensee in accordance with the standards and ethics of the
3 profession of medicine; or
4 (d) entering into a contract that limits a licensee's responsibility to advise the licensee's
5 patients fully about treatment options or other issues that affect the health care of the licensee's
6 patients.
7 (2) "Unlawful conduct" does not include:
8 (a) establishing, administering, or enforcing the provisions of a policy of disability
9 insurance by an insurer doing business in this state in accordance with Title 31A, Insurance Code;
10 (b) adopting, implementing, or enforcing utilization management standards related to
11 payment for a licensee's services, provided that:
12 (i) utilization management standards adopted, implemented, and enforced by the payer
13 have been approved by a physician or by a committee that contains one or more physicians; and
14 (ii) the utilization management standards does not preclude a licensee from exercising
15 independent professional judgment on behalf of the licensee's patients in a manner that is
16 independent of payment considerations;
17 (c) developing and implementing clinical practice standards that are intended to reduce
18 morbidity and mortality or developing and implementing other medical or surgical practice
19 standards related to the standardization of effective health care practices, provided that:
20 (i) the practice standards and recommendations have been approved by a physician or by
21 a committee that contains one or more physicians; and
22 (ii) the practice standards do not preclude a licensee from exercising independent
23 professional judgment on behalf of the licensee's patients in a manner that is independent of
24 payment considerations;
25 (d) requesting or recommending that a patient obtain a second opinion from a licensee;
26 (e) conducting peer review, quality evaluation, quality improvement, risk management,
27 or similar activities designed to identify and address practice deficiencies with health care
28 providers, health care facilities, or the delivery of health care;
29 (f) providing employment supervision or adopting employment requirements that do not
30 interfere with the licensee's ability to exercise independent professional judgment on behalf of the
31 licensee's patients, provided that employment requirements that may not be considered to interfere

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1 with an employed licensee's exercise of independent professional judgment include:
2 (i) an employment requirement that restricts the licensee's access to patients with whom
3 the licensee's employer does not have a contractual relationship, either directly or through contracts
4 with one or more third-party payers; or
5 (ii) providing compensation incentives that are not related to the treatment of any
6 particular patient;
7 (g) providing benefit coverage information, giving advice, or expressing opinions to a
8 patient or to a family member of a patient to assist the patient or family member in making a
9 decision about health care that has been recommended by a licensee; or
10 (h) any otherwise lawful conduct that does not substantially interfere with the licensee's
11 ability to exercise independent professional judgment on behalf of the licensee's patients and that
12 does not constitute the practice of medicine as defined in this chapter.
13 Section 4. Section 58-68-102 is amended to read:
14 58-68-102. Definitions.
15 In addition to the definitions in Section 58-1-102, as used in this chapter:
16 (1) "Administrative penalty" means a monetary fine imposed by the division for acts or
17 omissions determined to constitute unprofessional or unlawful conduct, as a result of an
18 adjudicative proceeding conducted in accordance with Title 63, Chapter 46b, Administrative
19 Procedures Act.
20 (2) "ACGME" means the Accreditation Council for Graduate Medical Education of the
21 American Medical Association.
22 (3) "AOA" means the American Osteopathic Association.
23 (4) "Board" means the Osteopathic Physician's Licensing Board created in Section
24 58-68-201.
25 (5) "Diagnose" means:
26 (a) to examine in any manner another person, parts of a person's body, substances, fluids,
27 or materials excreted, taken, or removed from a person's body, or produced by a person's body, to
28 determine the source, nature, kind, or extent of a disease or other physical or mental condition;
29 (b) to attempt to conduct an examination or determination described under Subsection
30 (5)(a); [or]
31 (c) to hold oneself out as making or to represent that one is making an examination or

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1 determination as described in Subsection (5)(a); or
2 (d) to make an examination or determination as described in Subsection (5)(a) upon or
3 from information supplied directly or indirectly by another person, whether or not in the presence
4 of the person making or attempting the diagnosis or examination.
5 (6) "Medical assistant" means an unlicensed individual working under the direct and
6 immediate supervision of a licensed osteopathic physician and surgeon and engaged in specific
7 tasks assigned by the licensed osteopathic physician and surgeon in accordance with the standards
8 and ethics of the profession.
9 (7) "Physician" means both physicians and surgeons licensed under Section 58-67-301,
10 Utah Medical Practice Act, and osteopathic physicians and surgeons licensed under Section
11 58-68-301, Utah Osteopathic Medical Practice Act.
12 (8) "Practice of osteopathic medicine" means:
13 (a) to diagnose, treat, correct, or prescribe for any human disease, ailment, injury,
14 infirmity, deformity, pain, or other condition, physical or mental, real or imaginary, or to attempt
15 to do so, by any means or instrumentality, which in whole or in part is based upon emphasis of the
16 importance of the musculoskeletal system and manipulative therapy in the maintenance and
17 restoration of health, by an individual in Utah or outside of the state upon or for any human within
18 the state;
19 (b) when a person not licensed as a physician directs a licensee under this chapter to
20 withhold or alter the health care services that the licensee has ordered, but practice of medicine
21 does not include any conduct under Subsection 58-68-501(2);
22 (c) to maintain an office or place of business for the purpose of doing any of the acts
23 described in Subsection (8)(a) whether or not for compensation; or
24 (d) to use, in the conduct of any occupation or profession pertaining to the diagnosis or
25 treatment of human diseases or conditions, in any printed material, stationery, letterhead,
26 envelopes, signs, or advertisements, the designation "doctor," "doctor of osteopathic medicine,"
27 "osteopathic physician," "osteopathic surgeon," "osteopathic physician and surgeon," "Dr.,"
28 "D.O.," or any combination of these designations in any manner which might cause a reasonable
29 person to believe the individual using the designation is a licensed osteopathic physician, and if
30 the party using the designation is not a licensed osteopathic physician, the designation must
31 additionally contain the description of the branch of the healing arts for which the person has a

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1 license.
2 (9) "Prescription drug or device" means:
3 (a) a drug or device which, under federal law, is required to be labeled with either of the
4 following statements or their equivalent:
5 (i) "CAUTION: Federal law prohibits dispensing without prescription"; or
6 (ii) "CAUTION: Federal law restricts this drug to use by or on the order of a licensed
7 veterinarian"; or
8 (b) a drug or device that is required by any applicable federal or state law or rule to be
9 dispensed on prescription only or is restricted to use by practitioners only.
10 (10) "SPEX" means the Special Purpose Examination of the Federation of State Medical
11 Boards.
12 (11) "Unlawful conduct" is as defined in Sections 58-1-501 and 58-68-501.
13 (12) "Unprofessional conduct" is as defined in Sections 58-1-501 and 58-68-502 and as
14 may be further defined by division rule.
15 Section 5. Section 58-68-501 is amended to read:
16 58-68-501. Unlawful conduct.
17 (1) "Unlawful conduct" includes, in addition to the definition in Section 58-1-501:
18 [(1)] (a) buying, selling, or fraudulently obtaining any osteopathic medical diploma,
19 license, certificate, or registration; and
20 [(2)] (b) aiding or abetting the buying, selling, or fraudulently obtaining of any osteopathic
21 medical diploma, license, certificate, or registration[.];
22 (c) substantially interfering with a licensee's lawful and competent practice of medicine
23 in accordance with this chapter by:
24 (i) any person or entity that manages, owns, operates, or conducts a business having a
25 direct or indirect financial interest in the licensee's professional practice; or
26 (ii) anyone other than another physician licensed under this title, who is engaged in direct
27 clinical care or consultation with the licensee in accordance with the standards and ethics of the
28 profession of medicine; or
29 (d) entering into a contract that limits a licensee's responsibility to advise the licensee's
30 patients fully about treatment options or other issues that affect the health care of the licensee's
31 patients.

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1 (2) "Unlawful conduct" does not include:
2 (a) establishing, administering, or enforcing the provisions of a policy of disability
3 insurance by an insurer doing business in this state in accordance with Title 31A, Insurance Code;
4 (b) adopting, implementing, or enforcing utilization management standards related to
5 payment for a licensee's services, provided that:
6 (i) utilization management standards adopted, implemented, and enforced by the payer
7 have been approved by a physician or by a committee that contains one or more physicians; and
8 (ii) the utilization management standards does not preclude a licensee from exercising
9 independent professional judgment on behalf of the licensee's patients in a manner that is
10 independent of payment considerations;
11 (c) developing and implementing clinical practice standards that are intended to reduce
12 morbidity and mortality or developing and implementing other medical or surgical practice
13 standards related to the standardization of effective health care practices, provided that:
14 (i) the practice standards and recommendations have been approved by a physician or by
15 a committee that contains one or more physicians; and
16 (ii) the practice standards do not preclude a licensee from exercising independent
17 professional judgment on behalf of the licensee's patients in a manner that is independent of
18 payment considerations;
19 (d) requesting or recommending that a patient obtain a second opinion from a licensee;
20 (e) conducting peer review, quality evaluation, quality improvement, risk management,
21 or similar activities designed to identify and address practice deficiencies with health care
22 providers, health care facilities, or the delivery of health care;
23 (f) providing employment supervision or adopting employment requirements that do not
24 interfere with the licensee's ability to exercise independent professional judgment on behalf of the
25 licensee's patients, provided that employment requirements that may not be considered to interfere
26 with an employed licensee's exercise of independent professional judgment include:
27 (i) an employment requirement that restricts the licensee's access to patients with whom
28 the licensee's employer does not have a contractual relationship, either directly or through contracts
29 with one or more third-party payers; or
30 (ii) providing compensation incentives that are not related to the treatment of any
31 particular patient;

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1 (g) providing benefit coverage information, giving advice, or expressing opinions to a
2 patient or to a family member of a patient to assist the patient or family member in making a
3 decision about health care that has been recommended by a licensee; or
4 (h) any otherwise lawful conduct that does not substantially interfere with the licensee's
5 ability to exercise independent professional judgment on behalf of the licensee's patients and that
6 does not constitute the practice of medicine as defined in this chapter.




Legislative Review Note
as of 1-3-97 8:20 AM

A limited legal review of this bill raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel

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