Doctors sue state over licensing delays, budget

The group representing 35,000 California physicians sued the state Wednesday in a San Francisco court, saying the Schwarzenegger administration illegally tapped $6 million in doctors' fees to help cover a budget shortage and that the furloughs of state workers have hamstrung the licensing of new doctors.

The California Medical Association's lawsuit said Gov. Arnold Schwarzenegger's policies have crippled the enforcement and licensing arms of the Medical Board of California, the state body that regulates California doctors and investigates complaints against them. The administration says the actions were necessary to help resolve the state's dire budget problems.

The board licenses about 100,000 physicians in California.

The CMA contends the governor violated the state constitution by using the fees collected from doctors to fill a hole in the General Fund — the state's beleaguered coffer of tax revenue. The fees, the CMA argued, by law are required to be used to fulfill the obligations of the Medical Board. The CMA seeks to have the furloughs halted immediately, and a restoration of the funds that were taken.

"By raiding the special fund that supports the Medical Board and by imposing a debilitating furlough on its staff, the state is obstructing the Medical Board…," the doctors said. The suit names the governor, his finance director and the head of the Department of Personnel Administration. It also the names the state treasurer and state controller for their roles in fiscal decisions ordered by the governor and Legislature.

"No constitutional provision or state law gives the governor unilateral power to furlough state employees at a special-fund agency that is financially self-sufficient and independent from the General Fund," the CMA noted.

On Sept. 21, Capitol Weekly reported that Schwarzenegger's decision to force state employees to take three unpaid days off each month had resulted in the loss of some 5,100 work hours per month at the Medical Board's licensing and enforcement programs.

"The furloughs have significantly slowed board operations, particularly in our licensing program," Candis Cohen, spokeswoman for the Medical Board of California, said earlier.

The administration's department that oversees the medical board, the state Department of Consumer Affairs, said the furloughs were a necessary part of the budget-cutting strategies that the state employed to help balance its books. "The furloughs are just a necessary tool to help conserve critical funds," Consumer Affairs Department spokesman Luis Farias said at the time.

In July, the head of the Medical Board's licensing staff told board members that her office had suffered a 15 percent loss in productivity, or a loss of about 810 employee work hours per month in a staff of 46 people. The head of the board's enforcement program said "the impact of these three days off for just the enforcement staff will result in the loss of 4,272 hours of work, which is almost equivalent to losing 28 (or) 29 positions each month, or think of shutting down almost five district offices each month." The enforcement program has about 153 employees.

The CMA suit cited similar numbers.

The licensing slowdown comes at a time when the shortage of doctors is increasing, in part because of the natural aging of practicing physicians. According to figures cited by CMA, California leads the nation in the percentage of active physicians who aged 60 years or older, and that about a third of California doctors are aged 56 or older. The CMA said the state licensing slowdown has resulted in delays for hundreds of physicians who otherwise would be practicing.

By statute, licensing is supposed to take 60 business days or less, or about 90 calendar days. In reality, it is taking about 5 ½ months, according to the CMA, which has compiled information from its members and the board.

According to figures based on state data, there were about 7,200 pending license applications before the board in August, and  1,806 had not gone through the initial licensing review. That figure was about 137 more than two months earlier, at the end of June, when 1,669 applications had not completed the initial review. 

"CMA has gotten numerous complaints from our members on delays in licensing," said Long Do, director of the CMA's litigation division. "They can't start practicing medicine. These are folks who have obtained an employment position, or fellowship, but they simply can't start treating patients. "This (the delay) hurts physicians who are applying, it hurts physicians who have licenses and it hurts the public…. There is a physician shortage and it only is going to get worse. The population of the state is aging, and we would certainly want the medical board to process those applications sooner."

There are delays in enforcement as well, although just how long and how many are affected is not certain, Do said, in part because of the confidential nature of the process. Of the number of physicians investigated for complaints, fewer than one in five – about 17 percent – lead to formal accusations by the board, he said.