Act On The Establishment And Management Of Local Medical Centers


Published: 2010-01-18

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 Article 1 (Purpose)   print
The purpose of this Act is to contribute to advancing the health of local residents and to developing the local health and medical service by prescribing matters concerning the establishment and operation of local medical centers and assistance thereto.
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 Article 2 (Definitions)   print
The term "local medical centers" referred to in this Act means medical institutions established pursuant to this Act in order to perform medical service for local residents.
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 Article 3 (Legal Personality)   print
A local medical center shall be a juristic person.
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 Article 4 (Establishment and Registration)   print
(1) Local governments may establish local medical centers. If necessary, local medical centers may be consolidated or branches may be established.
(2) A local medical center shall come into existence by registering for its establishment at the location of its main office.
(3) When a local government intends to establish a local medical center, it shall prescribe necessary matters concerning the establishment, duties and operation thereof by Municipal Ordinance of local government except for those prescribed by this Act.
(4) The registration of establishment of local medical centers prescribed in paragraph (2), registration of the establishment of branches, registration of relocation, registration of modification and other matters necessary for the registration of local medical centers shall be prescribed by Presidential Decree.
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 Article 5 (Names, etc. of Local Medical Centers)   print
(1) A local medical center shall be named by including "medical center" to the name of the local government that has established the relevant local medical center.
(2) No entity that is not a local medical center under this Act shall use the name prescribed in paragraph (1) or any name similar thereto.
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 Article 6 (Articles of Incorporation)   print
(1) The articles of incorporation of local medical centers shall state the following matters:
1. Objectives;
2. Name;
3. Location of main office;
4. Matters concerning business;
5. Matters concerning executives and employees;
6. Matters concerning organization;
7. Matters concerning board of directors;
8. Matters concerning property and accounting;
9. Matters concerning the method of public announcement;
10. Matters concerning the modification of articles of incorporation;
11. Matters concerning dissolution and consolidation;
12. Other matters prescribed by Presidential Decree.
(2) If the articles of incorporation of a local medical center are to be modified, authorization shall be obtained from the head of the relevant local government.
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 Article 7 (Projects)   print
(1) Local medical centers shall conduct the following projects: <Amended by Act No. 8852, Feb. 29, 2008; Act No. 9847, Dec. 29, 2009; Act No. 9932, Jan. 18, 2010>
1. A project of medical examination and treatment of local residents;
2. A project of managing and preventing infectious diseases and major diseases;
3. A health and medical project which is hard to be managed by a private medical institution;
4. A project for educating health to medical professionals, medical technicians and local residents;
5. Matters concerning the dissemination of medical knowledge and clinical skills;
6. Implementation of public health measures of the State or local governments;
7. Implementation and management of health and medical projects recognized as necessary by the Minister of Health and Welfare and the heads of local governments.
(2) A local medical center may conduct a project under paragraph (1) jointly with other medical institution, university or research institute, or conclude an agreement on the assistance of human resources and technology therewith.
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 Article 8 (Executives)   print
(1) A local medical center shall have one chairperson, six to ten directors and one auditor as its executives.
(2) Directors shall be appointed by the president with the approval of the head of local government, and an auditor shall be appointed by the head of local government.
(3) Directors shall be appointed by undergoing procedures for recommendation by the executive recommendation committee prescribed by Presidential Decree.
(4) Any of the following persons shall be the directors of a local medical center, and necessary matters, such as procedures for recommendation, etc. shall be prescribed by Ordinance of the Ministry of Health and Welfare: <Amended by Act No. 8852, Feb. 29, 2008; Act No. 9932, Jan. 18, 2010>
1. Two public officials belonging to the local government, who are recommended by the head of local government (one president of a local health center shall be included therein);
2. A person recommended by the local health and medical society;
3. A person recommended by the relevant consumers' organization;
4. A person recommended by the local council.
(5) The chairperson shall work full-time and hold a concurrent post of president.
(6) Whether executives, other than the chairperson, work full-time or part-time shall be prescribed by Municipal Ordinance of a local government.
(7) The directors and auditor shall serve a three year term and may be reappointed for one further term.
(8) Where the position of director prescribed in paragraph (7) becomes vacant during his/her term of office, the term of office of successive director shall be the remaining term of office of the predecessor.
(9) The auditor shall audit the duties and accounts of the local medical center.
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 Article 9 (Board of Directors)   print
(1) A local medical center shall have a board of directors for deliberation on and resolution of the following matters:
1. Matters concerning the modification of articles of incorporation;
2. Matters concerning business plans, budget and closing accounts;
3. Matters concerning organization;
4. Matters concerning acquisition and disposal of properties;
5. Matters concerning the enactment and modification of provisions on personnel management, remuneration, service, etc.;
6. Other matters deemed necessary by the board of directors.
(2) The board of directors shall consist of a chairperson and directors.
(3) The chairperson shall call the meetings of the board of directors and preside over the meetings.
(4) The board of directors shall go into session with the attendance of a majority of the total directors and pass a resolution with the approval of a majority of those present.
(5) The auditor may attend the board of directors and state his/her opinions.
(6) Matters necessary for the authority and operation of the board of directors and an auditor shall be prescribed by the articles of incorporation.
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 Article 10 (Presidents)   print
(1) A local medical center shall have one president.
(2) The president shall represent the local medical center, take full charge of the duties of the local medical center, and direct and supervise staff members belonging to him/her.
(3) The president shall be appointed by the head of local government on the recommendation of the executive recommendation committee prescribed by Presidential Decree from among persons with specialized knowledge and abilities concerning the operation of the local medical center.
(4) If the head of a local government has received a request for dismissal of a president from the Minister of Health and Welfare as prescribed in the provisions of Article 22 (2), he/she shall comply therewith unless any justifiable reason exists otherwise. <Amended by Act No. 8852, Feb. 29, 2008; Act No. 9932, Jan. 18, 2010>
(5) If the president has received a request for dismissal of an executive from the Minister of Health and Welfare as prescribed in the provisions of Article 22 (2), he/she shall comply therewith unless any justifiable reason exists otherwise. <Amended by Act No. 8852, Feb. 29, 2008; Act No. 9932, Jan. 18, 2010>
(6) The president shall serve a three-year term and may be reappointed.
(7) When the president is unable to perform his/her duties due to extenuating circumstances, the person designated by the articles of incorporation shall perform such duties as proxy.
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 Article 11 (Grounds for Disqualification for Executives)   print
(1) No person who falls under any of the following subparagraphs shall be an executive of a local medical center:
1. A person who is not a Korean national;
2. A minor, incompetent or quasi-incompetent;
3. A bankrupt who has not been reinstated;
4. A person for whom two years have not passed from the date execution was terminated (including cases in which execution is deemed to have been terminated) or exempted after he/she had been punished by imprisonment without prison labor or heavier punishment;
5. A person whose qualification has been deprived or suspended by law or court decision.
(2) If an executive of the local medical center falls under any of the subparagraphs of paragraph (1) or is identified as a person falling thereunder at the time of his/her appointment, he/she shall deservedly resign from office.
(3) An activity involved by an executive resigned pursuant to paragraph (2) shall not lose effect.
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 Article 12 (Appointment and Dismissal of Employees)   print
The employees of a local medical center shall be appointed and dismissed as prescribed by its articles of incorporation.
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 Article 13 (Holding Concurrent Post)   print
(1) Where necessary for conducting projects pursuant to Article 7, a public official of education working at the university prescribed in the provisions of subparagraph 1 of Article 2 of the Higher Education Act, and a person working at the university, research institute and medical institution may conduct concurrent duties of research or medical treatment at a local medical center with the permission of the head of the university, research institute or medical institution to which such public official of education or person belongs.
(2) The duties and remuneration of the person who is assigned to concurrent duties at a local medical center as prescribed in the provisions of paragraph (1) and other matters necessary for performing concurrent duties shall be prescribed by Presidential Decree.
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 Article 14 (Business Year)   print
The business year of local medical centers shall coincide with the fiscal year of general accounting of a local government.
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 Article 15 (Accounting Standards)   print
The president shall comply with the medical institution accounting standards prescribed in the provisions of Article 62 of the Medical Service Act in order to secure the transparency of accounting. <Amended by Act No. 8366, Apr. 11, 2007>
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 Article 16 (Submission of Business Plans, etc.)   print
The president shall prepare a business plan and budget bill of a local medical center before each business year starts, and submit them to the Minister of Health and Welfare and the head of the local government, as prescribed by Presidential Decree. <Amended by Act No. 8852, Feb. 29, 2008; Act No. 9932, Jan. 18, 2010>
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 Article 17 (Subsidies, etc.)   print
(1) Where necessary for conducting measures of a public health and medical service, the State may provide part of expenses incurred for public health and medical service projects, such as the expansion of facilities and equipment of the local medical centers, securing excellent medical professionals, etc. within budgetary limits.
(2) Local governments may give contributions to cover the expenses needed for the establishment of local medical centers or give subsidies for the operation thereof.
(3) Individuals, juristic persons or organizations may donate money or other property to a local medical center in order to assist the projects of local medical centers.
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 Article 18 (Financial Resources)   print
A local medical center shall be operated with earnings prescribed in the provisions of Article 7, subsidies prescribed in the provisions of Article 17, contributions, donations and other income.
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 Article 19 (Borrowing Money)   print
(1) A local medical center may obtainlong-term or temporary loans with the approval of the head of a local government.
(2) The head of a local government may guarantee the repayment of long-term or temporary loan prescribed in paragraph (1).
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 Article 20 (Submission, etc. of Account Settlement)   print
(1) A local medical center shall prepare the statement of revenue and expenditure accounts for each business year as prescribed by Presidential Decree, submit such statement to the Minister of Health and Welfare and the heads of local governments by no later than the end of February of the following year, and obtain approval therefor from the heads of local governments. <Amended by Act No. 8852, Feb. 29, 2008; Act No. 9932, Jan. 18, 2010>
(2) The statement of revenue and expenditure prescribed in paragraph (1) shall be accompanied by the following documents:<Amended by Act No. 8852, Feb. 29, 2008; Act No. 9932, Jan. 18, 2010>
1. A financial statement and annexed documents;
2. Audit testimonials of a certified public accountant designated by a local government;
3. Other documents prescribed by Ordinance of the Ministry of Health and Welfare in order to clarify the details of an account settlement.
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 Article 21 (Evaluation of Operation and Guidance)   print
(1) The Minister of Health and Welfare shall conduct evaluation of the operation of local medical centers, as prescribed by Presidential Decree, and devise necessary measures according to the results of the evaluation: Provided, That the Minister of Health and Welfare may, if deemed necessary, have the heads of local governments conduct evaluation of operation. <Amended by Act No. 8852, Feb. 29, 2008; Act No. 9932, Jan. 18, 2010>
(2) The evaluation of operation prescribed in the provisions of paragraph (1) shall include elements, such as the management situation of local medical centers, results of public health and medical service for the disadvantaged people, degree of contribution to the promotion of local residents' health, efficiency of duties, customer service, etc.
(3) When the heads of local governments have conducted the evaluation of operation as prescribed in the provisions of the proviso to paragraph (1), they shall submit a report on the evaluation of operation, financial statement and other documents prescribed by Presidential Decree to the Minster of Health and Welfare within one month from the completion thereof. <Amended by Act No. 8852, Feb. 29, 2008; Act No. 9932, Jan. 18, 2010>
(4) The Minister of Health and Welfare or the heads of local governments may give necessary guidances or recommendations, such as publicly announcing the results of the evaluation of operation for the efficient operation of local medical centers. <Amended by Act No. 8852, Feb. 29, 2008; Act No. 9932, Jan. 18, 2010>
(5) Matters necessary for the detailed standards, procedures, etc. for the evaluation of operation prescribed in the provisions of paragraph (2) shall be prescribed by Ordinance of the Ministry of Health and Welfare. <Amended by Act No. 8852, Feb. 29, 2008; Act No. 9932, Jan. 18, 2010>
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 Article 22 (Examination of Operation and Corrective Measures)   print
(1) Where a local medical center falls under any of the following subparagraphs as a result of the evaluation of operation prescribed in the provisions of the main sentence of Article 21 (1) or of the analysis of documents, etc. prescribed in the provisions of paragraph (3) of the same Article, the Minister of Health and Welfare shall examine the operation of such local medical center as prescribed by Presidential Decree and publicly announce the results: <Amended by Act No. 8852, Feb. 29, 2008; Act No. 9932, Jan. 18, 2010>
1. Where a net loss for the current year has incurred consecutively for three business years or more;
2. Where the business income has profoundly decreased compared with that of the previous year without any specific reason;
3. Where the management structure needs restructuring, such as the scope of business has been reduced due to the management environment, a juristic person has been dissolved, public medical services cannot be functioned properly, etc.
(2) Where deemed necessary as a result of the examination of management prescribed in the provisions of paragraph (1), the Minister of Health and Welfare may request the head of a local government or a president to take necessary measures for the improving management, such as dismissal of executives of the relevant local medical center, organizational restructuring, etc. <Amended by Act No. 8852, Feb. 29, 2008; Act No. 9932, Jan. 18, 2010>
(3) The head of a local government and a president in receipt of a request prescribed in the provisions of paragraph (2) shall comply therewith unless any justifiable reason exists.
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 Article 23 (Guidance, Supervision, etc.)   print
(1) The head of a local government may guide and supervise the duties of a local medical center, order the center to report necessary matters concerning duties, accounting, etc., and submit necessary documents.
(2) Where deemed necessary for the guidance and supervision of local medical centers, the Minister of Health and Welfare and the heads of local governments may have public officials subject to the jurisdiction thereof examine matters concerning the duties, accounting and property of local medical centers. <Amended by Act No. 8852, Feb. 29, 2008; Act No. 9932, Jan. 18, 2010>
(3) A public official examining as prescribed in the provisions of paragraph (2) shall carry a certificate indicating his/her authority and present it to the interested persons.
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 Article 24 (Publication of Situations of Duties, etc.)   print
The president shall publicly announce the statement of revenue and expenditure, objective of annual operation, results of the evaluation of the current account and other important matters concerning the operation to the residents as prescribed by Ordinance of the Ministry of Health and Welfare. <Amended by Act No. 8852, Feb. 29, 2008; Act No. 9932, Jan. 18, 2010>
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 Article 25 (Dispatch of Public Officials)   print
Where it is necessary for the support of projects conducted by local medical centers, the head of a local government may dispatch public officials subject to the jurisdiction thereof to local medical centers.
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 Article 26 (Commissioning and Entrusting Authority and Operation)   print
(1) The authority of the Minster of Health and Welfare under this Act may be delegated to the heads of local governments as prescribed by Presidential Decree. <Amended by Act No. 8852, Feb. 29, 2008; Act No. 9932, Jan. 18, 2010>
(2) Where necessary for achieving the objectives of local medical centers, the heads of local governments may entrust part of the authority under this Act to the president as prescribed by Municipal Ordinance.
(3) Where the head of a local government deems that appropriate reasons for management exist, he/she may entrust all or part of the operation of local medical centers to the university hospitals, etc. as prescribed by Municipal Ordinance after obtaining approval from the Minster of Health and Welfare. <Amended by Act No. 8852, Feb. 29, 2008; Act No. 9932, Jan. 18, 2010>
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 Article 27 (Relationship with other Acts)   print
(1) The provisions concerning an incorporated foundation in the Civil Act shall apply mutatis mutandis to the local medical centers except for those prescribed by this Act.
(2) The provisions concerning an incorporated foundation in the Medical Service Act shall apply mutatis mutandis to local medical centers except for those prescribed by this Act.
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 Article 28 (Legal Fiction of Public Officials in Application of Penal Provisions)   print
The employees prescribed by Presidential Decree, such as executives, accounting-related employees, etc. of local medical centers shall be assumed as public officials in the application of Articles 129 through 132 of the Criminal Act.
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 Article 29 (Fines for Negligence)   print
(1) Any person who falls under any of the following subparagraphs shall be punished by a fine for negligence not exceeding three million won:
1. A person who uses a similar name, in violation of the provisions of Article 5 (2);
2. A person who refuses, obstructs or evades the examination prescribed in Article 23 (2) without justifiable reasons.
(2) Fines for negligence prescribed in the provisions of paragraph (1) shall be imposed and collected by the heads of local governments as prescribed by Municipal Ordinance of local governments: Provided, That in cases of a fine for negligence imposed on a person who refuses, obstructs or evades the examination of public officials belonging to the Ministry of Health and Welfare from among the fines for negligence prescribed in the provisions of paragraph (1) 2, such fines for negligence shall be imposed and collected by the Minister of Health and Welfare, as prescribed by Presidential Decree. <Amended by Act No. 8852, Feb. 29, 2008; Act No. 9932, Jan. 18, 2010>
(3) Any person who is dissatisfied with a disposition of a fine for negligence prescribed in the provisions of paragraph (2) may raise an objection to the Minister of Health and Welfare or the heads of local governments within 30 days from the day he/she receives a notice of disposition. <Amended by Act No. 8852, Feb. 29, 2008; Act No. 9932, Jan. 18, 2010>
(4) If a person who has been issued the disposition of a fine for negligence under the provisions of paragraph (2) raises an objection as prescribed in the provisions of paragraph (3), the Minister of Health and Welfare or the heads of local governments shall notify the competent court, which, in turn, shall proceed to a trial on fines for negligence pursuant to the Non-Contentious Case Litigation Procedure Act.<Amended by Act No. 8852, Feb. 29, 2008; Act No. 9932, Jan. 18, 2010>
(5) If neither an objection is raised nor the fine for negligence paid within a period prescribed in paragraph (3), it shall be collected in the same manner as delinquent national or local taxes are collected.
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force two months after the date of its promulgation.
Article 2 (Transitional Measures concerning Local Government-Invested Public Corporations)
(1) Local government-invested public corporations established for the purpose of medical service as prescribed by the Local Public Enterprises Act as at the time this Act enters into force shall be deemed local medical centers.
(2) The rights, responsibilities and properties of local government-invested public corporations prescribed in the provisions of paragraph (1) shall be succeeded by local medical centers.
Article 3 (Transitional Measures concerning Municipal Ordinance and Articles of Incorporation)
The articles of incorporation of local government-invested public corporations prescribed in Article 2 of Addenda and Municipal Ordinances enacted as prescribed by the Local Public Enterprises Act as at the time this Act enters into force shall be deemed the articles of incorporation and Municipal Ordinances under this Act: Provided, That local governments and local government-invested public corporations shall readjust Municipal Ordinances and the articles of incorporation as prescribed by this Act within six months from the date this Act enters into force, and take necessary measures, such as the modification of registration, etc.
Article 4 (Transitional Measures concerning Executives and Employees)
(1) The president, auditor and directors appointed as prescribed by the Local Public Enterprises Act as at the time this Act enters into force shall be deemed the president, auditor and directors who have been appointed as prescribed by this Act: Provided, That the term of office shall be the remaining period prescribed by the provisions of the Local Public Enterprises Act.
(2) The employees appointed as prescribed by the Local Public Enterprises Act as at the time this Act enters into force shall be deemed employees appointed pursuant to the provisions of Article 12.
Article 5 (Transitional Measures concerning Entrusted Operation)
The operation of local medical centers being operated under the entrustment as at the time this Act enters into force shall be deemed entrusted pursuant to the provisions of Article 26 (3).
Article 6 (Applicability concerning Imposition of Fines for Negligence)
The imposition of fines for negligence prescribed in the provisions of Article 29 (1) 1 shall apply beginning from the first person who commits a violation after this Act enters into force.
Article 7 (Amendment to other Acts)
ADDENDA<Act No. 8366, Apr. 11, 2007>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 21 Omitted.
ADDENDA<Act No. 8852, Feb. 29, 2008>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 7 Omitted.
ADDENDA<Act No. 9847, Dec 29, 2009>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 22 Omitted.
ADDENDA<Act No. 9932, Jan. 18, 2010>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 5 Omitted.