BILL NUMBER: SB 899 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JULY 14, 2003
AMENDED IN SENATE APRIL 21, 2003
INTRODUCED BY Senator Poochigian
FEBRUARY 21, 2003
An act to amend Section 139.3 of the Labor Code,
relating to workers' compensation.
LEGISLATIVE COUNSEL'S DIGEST
SB 899, as amended, Poochigian. Workers' compensation :
physician referral .
Existing law provides that an injury of an employee arising out of
and in the course of employment is generally compensable through the
workers' compensation system.
This bill would state the intent of the Legislature to improve the
workers' compensation system by promoting the efficient delivery of
high quality appropriate medical care.
Existing workers' compensation law provides that it is unlawful
for a physician to refer a person for specified medical goods or
services whether for treatment or medical-legal purposes if the
physician or his or her immediate family has a financial interest
with the person or in the entity that receives the referral, except
in prescribed circumstances.
This bill would add outpatient surgery, as defined, to the list of
medical goods or services for which it is unlawful for a physician
to refer a person under this provision.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 139.3 of the Labor Code is amended to
SECTION 1. It is the intent of the Legislature to improve the
workers' compensation system by promoting the efficient delivery of
high quality appropriate medical care. read:
139.3. (a) Notwithstanding any other provision of law, to the
extent those services are paid pursuant to Division 4 (commencing
with Section 3200), it is unlawful for a physician to refer a person
for clinical laboratory, diagnostic nuclear medicine, radiation
oncology, physical therapy, physical rehabilitation, psychometric
testing, home infusion therapy, outpatient surgery, or diagnostic
imaging goods or services whether for treatment or medical-legal
purposes if the physician or his or her immediate family has a
financial interest with the person or in the entity that receives the
referral.
(b) For purposes of this section and Section 139.31, the following
shall apply:
(1) "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.
(2) "Immediate family" includes the spouse and children of the
physician, the parents of the physician, and the spouses of the
children of the physician.
(3) "Physician" means a physician as defined in Section 3209.3.
(4) A "financial interest" includes, but is not limited to, any
type of ownership, interest, debt, loan, lease, compensation,
remuneration, discount, rebate, refund, dividend, distribution,
subsidy, or other form of direct or indirect payment, whether in
money or otherwise, between a licensee and a person or entity to whom
the physician refers a person for a good or service specified in
subdivision (a). A financial interest also exists if there is an
indirect relationship between a physician and the referral recipient,
including, but not limited to, an arrangement whereby a physician
has an ownership interest in any entity that leases property to the
referral recipient. 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 of the physician.
(5) A "physician's office" is 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. Employees and independent contractors
shall be licensed or certified when licensure or certification is
required by law.
(6) The "office of a group practice" is 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 for which all of the following are applicable:
(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 use of shared office space, facilities,
equipment, and personnel.
(B) Substantially all of the services of the physicians who are
members of the group are provided through the group and are billed in
the name of the group and amounts so received are treated as
receipts of the group, and except that in the case of multispecialty
clinics, as defined in subdivision (l) of Section 1206 of the Health
and Safety Code, physician services are billed in the name of the
multispecialty clinic and amounts so received are treated as receipts
of the multispecialty clinic.
(C) The overhead expenses of, and the income from, the practice
are distributed in accordance with methods previously determined by
members of the group.
(7) Outpatient surgery includes both of the following:
(A) Any procedure performed on an outpatient basis in the
operating rooms, ambulatory surgery rooms, endoscopy units, cardiac
catheterization laboratories, or other sections of a freestanding
ambulatory surgery clinic, whether or not licensed under paragraph
(1) of subdivision (b) of Section 1204 of the Health and Safety Code.
(B) The ambulatory surgery itself.
(c) (1) It is unlawful for a licensee to enter into an arrangement
or scheme, such as a cross-referral arrangement, that the licensee
knows, or should know, has a principal purpose of ensuring referrals
by the licensee to a particular entity that, if the licensee directly
made referrals to that entity, would be in violation of this
section.
(2) It shall be unlawful for a physician to offer, deliver,
receive, or accept any rebate, refund, commission, preference,
patronage dividend, discount, or other consideration, whether in the
form of money or otherwise, as compensation or inducement for a
referred evaluation or consultation.
(d) No claim for payment shall be presented by an entity to any
individual, third-party payor, or other entity for any goods or
services furnished pursuant to a referral prohibited under this
section.
(e) A physician who refers to or seeks consultation from an
organization in which the physician has a financial interest shall
disclose this interest to the patient or if the patient is a minor,
to the patient's parents or legal guardian in writing at the time of
the referral.
(f) No insurer, self-insurer, or other payor shall pay a charge or
lien for any good or service resulting from a referral in violation
of this section.
(g) A violation of subdivision (a) shall be a misdemeanor. The
appropriate licensing board shall review the facts and circumstances
of any conviction pursuant to subdivision (a) and take appropriate
disciplinary action if the licensee has committed unprofessional
conduct. Violations of this section may also be subject to civil
penalties of up to five thousand dollars ($5,000) for each offense,
which may be enforced by the Insurance Commissioner, Attorney
General, or a district attorney. A violation of subdivision (c),
(d), (e), or (f) is a public offense and is punishable upon
conviction by a fine not exceeding fifteen thousand dollars ($15,000)
for each violation and appropriate disciplinary action, including
revocation of professional licensure, by the Medical Board of
California or other appropriate governmental agency.