(a)  Notwithstanding any other provision of law, a hospital district, or any affiliated nonprofit corporation upon a finding by the board of directors of the district that it will be in the best interests of the public health of the communities served by the district and in order to obtain a licensed physician and surgeon to practice in the communities served by the district, may do any of the following:

(1)  Guarantee to a physician and surgeon a minimum income for a period of no more than three years from the opening of the physician and surgeon’s practice.

(2)  Guarantee purchases of necessary equipment by the physician and surgeon.

(3)  Provide reduced rental rates of office space in any building owned or leased by the district or any of its affiliated entities, or subsidize rental payments for office space in any other buildings, for a term of no more than three years.

(4)  Provide other incentives to a physician and surgeon in exchange for consideration and upon terms and conditions the hospital district’s board of directors deems reasonable and appropriate.

(b)  Any provision in a contract between a physician and surgeon and a hospital district or affiliated nonprofit corporation is void which does any of the following:

(1)  Imposes as a condition any requirement that the patients of the physician and surgeon, or a quota of the patients of the physician and surgeon, only be admitted to a specified hospital.

(2)  Restricts the physician and surgeon from establishing staff privileges at, referring patients to, or generating business for another entity.

(3)  Provides payment or other consideration to the physician and surgeon for the physician and surgeon’s referral of patients to the district hospital or an affiliated nonprofit corporation.

(c)  Contracts between a physician and surgeon and a hospital district or affiliated nonprofit corporation that provide an inducement for the physician and surgeon to practice in the community served by the district hospital shall contain both of the following:

(1)  A provision which requires the inducement to be repaid with interest if the inducement is repayable.

(2)  A provision which states that no payment or other consideration shall be made for the referral of patients to the district hospital or an affiliated nonprofit corporation.

(d)  To the extent that this section conflicts with Section 650 of the Business and Professions Code, Section 650 of the Business and Professions Code shall supersede this section.

(e)  The Legislature finds that this section is necessary to assist district hospitals to attract qualified physicians and surgeons to practice in the communities served by these hospitals, and that the health and welfare of the residents in these communities require these provisions.

(Amended by Stats. 1992, Ch. 1358, Sec. 4. Effective January 1, 1993.)