(a) Notwithstanding any other provision of law, a municipal hospital, or any affiliated nonprofit corporation upon a finding by the board of trustees of the municipal hospital that it will be in the best interest of the public health of the communities served by the municipal hospital and in order to obtain a licensed physician and surgeon to practice in the communities served by the municipal hospital, may upon a four-fifths vote of the board of trustees 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 municipal hospital or any of its affiliated entities, or subsidize rental payments for office space in any other buildings, for a term of not more than three years.

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

(b) Any provision in a contract between a physician and surgeon and a municipal hospital 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 municipal hospital or an affiliated nonprofit corporation.

(c) Contracts between a physician and surgeon and a municipal hospital or affiliated nonprofit corporation that provide an inducement for the physician and surgeon to practice in the community served by the municipal 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 municipal 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 municipal 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.

(Added by Stats. 1992, Ch. 72, Sec. 11. Effective May 28, 1992.)