Like many states, California law contains prohibitions against physicians referring patients to health care entities in which the doctors have a financial interest.
California law does parallel Stark in part. It is relevant setting forth the entire statute to ensure no provisions apply to the client.
Business & Professions Code, Section 650.01(a) makes it unlawful for a “licensee” (defined as “physician”) to refer a person for:
· laboratory, diagnostic nuclear medicine, radiation oncology, physical therapy, physical rehabilitation, psychometric testing, home infusion therapy, or diagnostic imaging goods or services, if
· the licensee or his or her immediate family has a financial interest with the person or in the entity that receives the referral.
Section 650.02 sets forth certain exceptions including referrals to a rural practice, commercially reasonable leases, a personal services arrangement that meets specified criteria, and other exceptions that in part parallel those contained in the federal Stark rules. Section 650.1 addresses cost-sharing with respect to pharmaceutical services and products.
The succeeding sections contain exceptions relating to a group advertising and referral service for: dentists (650.2), chiropractors (650.3), marriage and family therapists (650.4).
Section 651 addresses false and misleading advertising for the purpose of or likely to induce the rendering of professional services or furnishing of products in connection with the professional practice or business for which he or she is licensed.
Section 651.3 addresses entities contracting with health care service plans.
Section 652 states that violation by a licensed person constitutes unprofessional conduct and by a place of business could constitute grounds for suspension or revocation of the business license.
Section 652.5 states that a violation constitutes a misdemeanor “as to any and all persons, whether or not licensed under this division.”
Section 654 states that:
No person licensed under Chapter 5 (commencing with Section 2000) of this division may have any membership, proprietary interest or coownership in any form in or with any person licensed under Chapter 5.5 (commencing with Section 2550) of this division to whom patients, clients or customers are referred or any profit-sharing arrangements.
Section 654.1 addresses referrals to clinical laboratories. Section 654.2 addresses charges, billing, and payments where the licensee has a financial interest.
Section 654.3 addresses open-end credits by dentists. Section 655.2 addresses audiologists and hearing aid dispensing. Section 655.5 addresses billing for clinical laboratory services. Section 655.7 addresses billing for anatomic pathology services, and Section 655.8, payments for CT, PET and MRI diagnostic imaging services.
Sections 656-657 address enforcement and penalties.
California B&P 2097 also requires a licensed physician to report to the California medical board of any financial interest that he or she or immediate family member owns in a health-related facility. if the physician refers the patient to an organization in which he or she has a financial interest (other than referrals prohibited under Stark or PORA (the Physician Ownership and Referral Act), the physician must disclose to the patient in writing that he or she holds such interest.
 As “physician” is defined in Section 3209.3 of the Labor Code:
"Physician" includes physicians and surgeons holding an M.D. or D.O. degree, psychologists, acupuncturists, optometrists, dentists, podiatrists, and chiropractic practitioners licensed by California state law and within the scope of their practice as defined by California state law."
* * *
If you have legal questions concerning telemedicine and telehealth practices, or about kickback and fee-splitting legal issues in New York, California, Massachusetts, Washington DC, and other states, contact a lawyer who knows the rules.
Consult an experienced health care law attorney who knows complementary medicine and integrative medicine for legal advice pertaining to any project involving allied health or CAM professionals.
Our law office has attorneys with legal experience in FDA matters, including guiding clients involved in health care delivery, group medical and private medical practice, who are concerned about issues at the interface of federal and state law, concerned about medical board discipline or medical malpractice liability issues. We also review and draft informed consent forms and guide clients concerning a variety of health care law issues.
Healthcare & FDA attorney Michael H. Cohen is a thought leader in healthcare law & FDA law, pioneering legal strategies in healthcare. wellness, and lifestyle markets. As a corporate and transactional lawyer, FDA regulatory attorney who also handles healthcare litigation, healthcare mediation and healthcare arbitration, and international healthcare & wellness law speaker, Los Angeles / Bay Area healthcare & FDA lawyer Michael H. Cohen represents conscious business leaders in a transformational era. Clients seek healthcare & FDA attorney Michael H. Cohen‘s legal savvy on all aspects of business law, healthcare law, and FDA law, including:
- business structure and entity formation (corporations, partnerships, LLCs)
- health care facility licensing issues (home health agency, hospice, imaging center)
- practitioner licensing matters;
- physician and allied & complementary medicine provider employment contracts and independent contractor agreements
- e-commerce (including online health education and mobile medical apps) legal
- copyright & trademark, licensing
- informed consent and liability risk management
- HIPAA and confidentiality and privacy issues
- Stark, self-referral, anti-kickback, patient brokering, and fee-splitting questions
- cosmetics claims, labeling
- OTC drug & homeopathics FDA legal review
- medical device FDA legal issues
- dietary supplement claims and labeling
- insurance reimbursement and Medicare issues for healthcare practitioners
- concierge medicine legal issues
- telemedicine legal, m-health, and digital health law
- business law and health care regulatory compliance arenas
- healthcare meditation and healthcare arbitration.
Whether advising start-ups or established companies, Los Angeles / San Francisco / Bay Area healthcare & FDA attorney Michael H. Cohen brings his entrepreneurial spirit and caring insight to cutting-edge legal and regulatory challenges. The Michael H. Cohen Law Group counsels healthcare practices, entities, and companies, such as clinical laboratories, physicians, psychologists, chiropractors, acupuncturists, naturopaths, nurses, healers, medical spas, sleep centers, addiction treatment centers, surgery centers, anti-aging centers, integrative medicine clinics, anti-aging practices, mental and behavioral health counselors, medical service organizations, telemedicine and mobile (m-health) companies, online health ventures, stem cell and cord blood entities; and other health and wellness enterprises. Healthcare and FDA lawyer Michael H. Cohen is admitted to practice in California, Massachusetts, New York, and Washington, D.C. Our clientele is national and international, and we also counsel healthcare and FDA clients in Los Angeles, San Diego, Ventura, San Francisco Bay Area, San Jose, Santa Barbara, Sacramento, San Bernadino, Alameda, Contra Costa County, and other California cities and counties. Contact our Los Angeles, Ventura County, & San Francisco Bay Area FDA & healthcare attorneys today if you need a telemedicine lawyer, concierge medicine lawyer, HIPAA lawyer, FDA lawyer or FDA regulatory consultant (dietary supplements, medical devices, cosmetics, OTC drugs), advertising compliance lawyer, healthcare mediator or arbitrator, concierge medicine attorney, management services organization attorney, or other specialized healthcare legal advice or FDA regulatory consulting.