50-5-117. Economic credentialing of physicians prohibited -- definitions. (1) Except to the extent necessary to determine physician competency or to comply with medicare or medicaid certification under Titles XVIII and XIX of the Social Security Act, respectively, or for accreditation by organizations that accredit hospitals or outpatient centers for surgical services, a hospital or an outpatient center for surgical services may not engage in economic credentialing by:

(a) requiring a physician requesting medical staff membership or medical staff privileges to agree to make referrals to that hospital, to an outpatient center for surgical services, or to any facility related to the hospital or the outpatient center for surgical services;

(b) refusing to grant staff membership or medical staff privileges or conditioning or otherwise limiting a physician's medical staff participation because the physician or a partner, associate, or employee of the physician:

(i) provides medical or health care services at, has an ownership interest in, or occupies a leadership position on the medical staff of a different hospital, hospital system, or health care facility; or

(ii) participates or does not participate in any particular health plan; or

(c) refusing to grant participatory status in a hospital or hospital system health plan or outpatient center for surgical services health plan to a physician who has medical staff privileges because the physician or a partner, an associate, or an employee of the physician provides medical or health care services at, has an ownership interest in, or occupies a leadership position on the medical staff of a different hospital, hospital system, or health care facility.

(2) Notwithstanding the prohibitions in subsection (1), a hospital or an outpatient center for surgical services may require recusal of a physician member of the board, the president of the medical staff of the hospital or outpatient center for surgical services, or the presiding officer of a medical staff committee from financial decisions and information related to the hospital or outpatient center for surgical services if the physician member of the board, the president of the hospital medical staff or outpatient center for surgical services staff, or the presiding officer of a medical staff committee has a conflict of interest relevant to those decisions or that information.

(3) For the purposes of this section, the following definitions apply:

(a) "Board" means the governing body or board of directors of a hospital or an outpatient center for surgical services.

(b) "Conflict of interest" means, notwithstanding the board's own conflict of interest policy, a situation in which a physician in a leadership position either individually or through an immediate family member, as defined in 15-30-3002, or through a partner or employee of the physician has a financial interest in any health care facility that may compromise the board's fiduciary responsibility.

(c) (i) "Economic credentialing" means the denial of a physician's application for staff membership or clinical privileges to practice medicine in a hospital or an outpatient center for surgical services on criteria other than the individual's education, training, current competence, experience, ability, personal character, and judgment.

(ii) This term does not mean use by the hospital or the outpatient center for surgical services of:

(A) exclusive contracts with physicians if the contracts do not violate the unfair trade practices provisions of Title 30, chapter 14, part 2;

(B) medical staff on-call requirements if the on-call requirements do not violate the unfair trade practices and consumer protection provisions of 30-14-103 or Title 30, chapter 14, part 2;

(C) adherence to a formulary approved by the medical staff; or

(D) other medical staff policy adopted to manage health care costs or improve quality.

(d) "Health care facility" has the meaning provided in 50-5-101.

(e) "Health plan" means a plan offered by any person, employer, trust, government agency, association, corporation, or other entity to provide, sponsor, arrange for, indemnify another for, or pay for health care services to eligible members, insureds, enrollees, employees, participants, beneficiaries, or dependents, including but not limited to a health plan provided by an insurance company, health service organization, health maintenance organization, preferred provider organization, self-insured health plan, captive insurer, multiple employee welfare arrangement, workers' compensation plan, medicare, or medicaid.

(f) "Physician" has the meaning provided in 37-3-102.