NEW JERSEY REGISTER
VOLUME 38, ISSUE 7
ISSUE DATE: APRIL 3, 2006
LAW AND PUBLIC SAFETY
DIVISION OF CONSUMER AFFAIRS
STATE BOARD OF MEDICAL EXAMINERS
Notice of Final Action on Petition for Rulemaking
Petitioner: Children's Health Associates, LLC
Authority: N.J.S.A. 52:14B-4
Take notice that on November 28, 2005, the Board of Medical Examiners (BME) received a petition for rulemaking from Children's Health Associates, LLC (CHA) requesting that the Board amend its regulation governing acceptable professional practice forms, N.J.A.C. 13:35-6.16(f), to permit physicians who are not licensed in New Jersey to become members of a New Jersey medical practice limited liability company (LLC), as long as the foreign practitioners own less than a majority of the membership interest in the LLC and do not engage in the professional practice of medicine in New Jersey. The petitioner contends that this amendment would provide greater flexibility for "inter-State ownership of" New Jersey medical practices. The notice of receipt of petition for rulemaking was published in the January 17, 2006 New Jersey Register at 38 N.J.R. 848(a).
The Board referred consideration of the petitioner's request to its Executive Committee at its January 11, 2006 meeting. The notice of action extending the date of final action was published in the February 21, 2006 New Jersey Register at 38 N.J.R. 1246(b). On January 26, 2006, the Committee reviewed the petitioner's request and formulated recommendations upon which the Board may take action on the petition. These recommendations were reported to the Board at its February 8, 2006 meeting. At that meeting, the Board decided to deny the petitioner's request because N.J.A.C. 13:35-6.16(f) is intended to extend to the LLC practice form the Professional Service Corporations Act's requirement that all members of a professional corporation be licensed in New Jersey and be accountable to this State's professional boards, N.J.S.A. 14A:17-5. The Board maintains that this requirement is necessary to ensure its unencumbered oversight and disciplinary control over the conduct of medical practices in this State. The Board takes this opportunity to point out that it disagrees with some of the petitioner's interpretations of N.J.A.C. 13:35-6.16 in the petition, including its claim that the Board was signaling its acceptance of expanded ownership and control of medical entities by non-plenary licensees and non-physicians in N.J.A.C. 13:35-6.16(f). The Board states that it has never approved of non-plenary or non-physician licensees having a majority share of an LLC co-owned with plenary licensed physicians. Nor did it ever contemplate that a physician licensee would not have to control such an LLC.
A copy of this notice has been mailed to the petitioner pursuant to N.J.A.C. 1:30-4.2.