2. Self Referrals 1

Question 1

What is the main prohibition outlined in Self-Referrals Section 139.3?

Answer 1

It is unlawful for a physician to refer a person for specific healthcare services if the physician or their immediate family has a financial interest in the entity receiving the referral.

Question 2

List the services mentioned in Section 139.3 that cannot be referred by a physician with a financial interest.

Answer 2

The services include: clinical laboratory diagnostic nuclear medicine radiation oncology physical therapy physical rehabilitation psychometric testing home infusion therapy outpatient surgery diagnostic imaging goods or services or pharmacy goods.

Question 3

What are the financial interests that disallow a physician from making referrals according to Section 139.3?

Answer 3

A physician is prohibited from making referrals if they or an immediate family member has a financial interest in the person or entity that receives the referral.

Question 4

Define ‘diagnostic imaging’ as per Section 139.3.

Answer 4

‘Diagnostic imaging’ includes but is not limited to all X-ray computed axial tomography magnetic resonance imaging nuclear medicine positron emission tomography mammography and ultrasound goods and services.

Question 5

Who qualifies as ‘immediate family’ according to Section 139.3?

Answer 5

‘Immediate family’ includes the spouse and children of the physician as well as the parents.

Question 6

What is the overarching principle of the law outlined in Section 139.3 regarding physician referrals?

Answer 6

The overarching principle is to prevent conflicts of interest and ensure that referrals are made based solely on patient need rather than financial gain.

Question 7

What legal division is referenced in Section 139.3 regarding payment for services?

Answer 7

The payment for services is referenced under Division 4 commencing with Section 3200.

Question 8

Explain the implications of Section 139.3 on medical-legal referrals.

Answer 8

Section 139.3 prohibits referrals for both treatment and medical-legal purposes if the referring physician has a financial interest in the entity being referred.

Question 9

What types of healthcare practices are affected by the provisions of Section 139.3?

Answer 9

The provisions affect practices that involve clinical laboratory services diagnostic imaging therapy services outpatient surgeries and other specified healthcare and pharmacy services.

Question 10

What is the definition of ‘physician’ as mentioned in the document?

Answer 10

‘Physician’ means a physician as defined in Section 3209.3.

Question 11

Who are included in the definition of ‘family members’ for the purpose of this regulation?

Answer 11

Family members include the spouses and children of the physician.

Question 12

What does ‘financial interest’ include according to the provided text?

Answer 12

‘Financial interest’ includes ownership interest debt loan lease compensation remuneration discount rebate refund dividend distribution subsidy or other forms of direct or indirect payment between a licensee and a person or entity to whom the physician refers a person for goods or services.

Question 13

What constitutes an indirect relationship between a physician and the referral recipient?

Answer 13

An indirect relationship includes but is not limited to arrangements whereby a physician has an ownership interest in any entity that leases property to the referral recipient.

Question 14

What happens if a financial interest is transferred for the purpose of avoiding the prohibition of this section?

Answer 14

Any financial interest transferred by a physician to or otherwise established in any person or entity for the purpose of avoiding the prohibition of this section shall be deemed a financial interest.

Question 15

Can a financial interest be in forms other than money?

Answer 15

Yes a financial interest can be in forms other than money including any other form of direct or indirect payment.

Question 16

Is the physician’s financial interest limited only to direct payments?

Answer 16

No a financial interest encompasses both direct and indirect payments.

Question 17

What kind of transactions might raise financial interest concerns in a physician’s practice?

Answer 17

Transactions that might raise concerns include ownership stakes in referring entities leases and compensation agreements associated with referrals.

Question 18

In what scenarios can family members of a physician create a financial interest conflict?

Answer 18

Family members of a physician can create a financial interest conflict if they have ownership or financial arrangements connected to the goods or services the physician refers patients to.

Question 19

What is the significance of Section 3209.3 in defining a physician?

Answer 19

Section 3209.3 provides the formal legal definition of ‘physician’ which must be understood to apply the regulations and restrictions laid out in the document.

Question 20

What is the definition of a ‘physician’s office’ according to the text?

Answer 20

A ‘physician’s office’ is defined as either of the following: A) An office of a physician in solo practice. B) An office in which the services or goods are personally provided by the physician or by employees in that office or personally by independent contractors in that office in accordance with other provisions of law. It is required that employees and independent contractors shall be licensed or certified when that licensure or certification is required by law.

Question 21

What are the criteria for an ‘office of a group practice’?

Answer 21

An ‘office of a group practice’ is defined as an office or offices in which two or more physicians are legally organized as a partnership professional corporation or not-for-profit corporation licensed according to subdivision a of Section 1204 of the Health and Safety Code. The following criteria must be met: A) Each physician who is a member of the group provides substantially the full range of services that the physician routinely provides including medical care consultation diagnosis or treatment through the joint organization.

Question 22

What legal organization forms can constitute a group practice according to the definition provided?

Answer 22

A group practice can be legally organized as a partnership professional corporation or not-for-profit corporation.

Question 23

According to the text what must employees and independent contractors have when providing services in a physician’s office?

Answer 23

Employees and independent contractors must be licensed or certified when such licensure or certification is required by law.

Question 24

What types of services must physicians provide in a group practice?

Answer 24

In a group practice each physician must provide substantially the full range of services they routinely offer including medical care consultation diagnosis or treatment.

Question 25

What section of the Health and Safety Code is referenced regarding the licensing of group practices?

Answer 25

The licensing of group practices is referenced in subdivision a of Section 1204 of the Health and Safety Code.

Question 26

What is the significance of the term 'substantially' in the context of services provided by physicians in a group practice?

Answer 26

The term 'substantially' signifies that while each physician must provide most if not all of their routine services there may be minor variations in the specific services rendered based on individual capability or group arrangement.

Question 27

What is a shared office space in the context of healthcare?

Answer 27

Shared office space refers to a physical workspace used by multiple healthcare providers or businesses that allows them to share facilities equipment and personnel thereby reducing costs and increasing collaboration.

Question 28

What are the billing practices for physician group members?

Answer 28

Substantially all of the services provided by physicians who are members of a group are billed in the name of that group. The amounts received from these services are treated as receipts of the group.

Question 29

What is the billing procedure for multispecialty clinics according to Section 1206 of the Health and Safety Code?

Answer 29

In multispecialty clinics physician services are billed in the name of the multispecialty clinic and the amounts received are treated as receipts of the multispecialty clinic.

Question 30

How are overhead expenses and income distributed among members of a physician group?

Answer 30

The overhead expenses and income from the practice are distributed according to methods that have been previously determined by the members of the group.

Question 31

What constitutes outpatient surgery?

Answer 31

Outpatient surgery includes any procedure performed on an outpatient basis in locations such as operating rooms ambulatory surgery rooms endoscopy units and cardiac catheterization laboratories as well as other sections of a freestanding ambulatory surgery clinic.

Question 32

What are the benefits of using shared office space for a physician group?

Answer 32

Benefits include cost savings improved collaboration and teamwork shared resources and facilities and increased efficiency in services provided.

Question 33

What regulations govern the billing for services provided in multispecialty clinics?

Answer 33

Billing for services in multispecialty clinics is governed by regulations outlined in subdivision 1 of Section 1206 of the Health and Safety Code.

Question 34

Explain the importance of predetermined methods for distributing overhead and income in a physician group.

Answer 34

Predetermined methods for distributing overhead and income are important for ensuring transparency fairness and equity among group members. They help avoid disputes regarding expenses and financial management.

Question 35

What types of locations are included under outpatient surgery facilities?

Answer 35

Outpatient surgery facilities include operating rooms ambulatory surgery rooms endoscopy units cardiac catheterization laboratories and freestanding ambulatory surgery clinics.

Question 36

How does the structure of billing impact the financial outcomes of a shared physician group?

Answer 36

The structure of billing impacts financial outcomes by centralizing revenue under the group’s name which can enhance the group's financial stability and reputation streamline billing processes and potentially increase overall income for all members.

Question 37

What is licensed under paragraph 1 of subdivision b of Section 1204 of the Health and Safety Code?

Answer 37

The ambulatory surgery itself.

Question 38

What does "pharmacy goods" include according to the document?

Answer 38

Pharmacy goods include any dangerous drug or dangerous device as defined by Section 4022 of the Business and Professions Code any medical food as defined by Section 109971 of the Health and Safety Code and any over-the-counter drug as classified by the federal Food and Drug Administration except for over-the-counter drugs sold at commercially reasonable rates in accessible physical retail outlets.

Question 39

What are the prohibitions regarding arrangements or schemes for licensees?

Answer 39

It is unlawful for a licensee to enter into an arrangement or scheme such as a cross-referral arrangement if the licensee knows or should know that the principal purpose is ensuring referrals to a particular entity that would violate this section if directly referred by the licensee.

Question 40

What actions are unlawful for a physician regarding financial incentives?

Answer 40

It shall be unlawful for a physician to offer deliver receive or accept any rebate refund or commission.

Question 41

Define 'dangerous drug' in the context of pharmacy goods.

Answer 41

A dangerous drug is any drug that is classified under Section 4022 of the Business and Professions Code.

Question 42

What is considered 'medical food' as per the Health and Safety Code?

Answer 42

Medical food is defined under Section 109971 of the Health and Safety Code.

Question 43

What is the significance of the phrase 'over-the-counter drugs sold at commercially reasonable rates'?

Answer 43

This phrase refers to exceptions regarding the classification of over-the-counter drugs specifically those that are sold in physical retail outlets that are commonly accessed by the public.

Question 44

What potential issue arises from a cross-referral arrangement?

Answer 44

The potential issue is that such arrangements might ensure referrals to an entity in a way that would violate legal regulations if the referrals were made directly.

Question 45

What does it mean for a licensee to 'know or should know' about a referral scheme?

Answer 45

It implies that the licensee has awareness or a reasonable expectation to understand that their actions are designed to circumvent legal restrictions on referrals.

Question 46

What is meant by 'preference patronage dividend discount or other consideration' in the context of medical referrals?

Answer 46

It refers to any form of compensation or inducement whether monetary or otherwise provided for a referred evaluation or consultation. This can include discounts bonuses or other benefits.

Question 47

What are the implications of presenting a claim for payment related to prohibited referrals?

Answer 47

An entity cannot present a claim for payment to any individual third-party payor or other entity for goods or services furnished as a result of a referral that is prohibited under relevant regulations.

Question 48

What is required of physicians who have a financial interest in an organization they refer patients to?

Answer 48

Physicians must disclose their financial interest to the patient in writing at the time of the referral. If the patient is a minor the disclosure must be made to the patient's parents or legal guardians.

Question 49

What does the term 'self-insurer' refer to in this context?

Answer 49

A self-insurer is an individual or entity that assumes the financial risk of providing for certain losses instead of purchasing insurance from a provider.

Question 50

What responsibility do insurers and payors have regarding charges resulting from illegal referrals?

Answer 50

No insurer self-insurer or other payor shall pay a charge or lien for any goods or services that resulted from a referral that violated the established regulations.

Question 51

What are the legal consequences of violating referral regulations as outlined in subdivision a?

Answer 51

A violation of the referral regulations outlined in subdivision a is considered a misdemeanor which may lead to legal penalties. Licensing boards will review the circumstances of any conviction and take appropriate action.

Question 52

What is the role of licensing boards in the case of referral violations?

Answer 52

Licensing boards are responsible for reviewing the facts and circumstances surrounding convictions for violations related to referrals and they will take appropriate action based on their findings.

Question 53

What actions could be deemed a conflict of interest in medical referrals?

Answer 53

A conflict of interest exists if a physician refers a patient to an organization in which the physician has a financial interest without disclosing that interest to the patient.

Question 54

Under what circumstances can a physician be prosecuted for referral violations?

Answer 54

A physician can be prosecuted if they make a referral that violates the outlined regulations leading to a misdemeanor charge.

Question 55

What is the significance of the written disclosure to patients regarding financial interests in referrals?

Answer 55

The written disclosure serves to protect patients' rights by ensuring they are fully informed about any potential conflicts of interest that may affect their healthcare decisions.

Question 56

What are the possible disciplinary actions if a licensee commits unprofessional conduct according to the provided text?

Answer 56

Disciplinary actions may include appropriate disciplinary action such as revocation of professional licensure by the Medical Board of California or other appropriate governmental agencies.

Question 57

What are the potential civil penalties for violations mentioned in the text?

Answer 57

Civil penalties may be up to five thousand dollars ($5000) for each offense.

Question 58

Who has the authority to enforce the civil penalties for unprofessional conduct violations?

Answer 58

The enforcement of civil penalties may be conducted by the Insurance Commissioner Attorney General or a district attorney.

Question 59

What is the maximum fine for public offenses under subdivisions c d e or f?

Answer 59

The maximum fine for each violation of subdivisions c d e or f is fifteen thousand dollars ($15000) upon conviction.