BILL NUMBER: AB 2744 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 6, 2016
AMENDED IN ASSEMBLY APRIL 11, 2016
INTRODUCED BY Assembly Member Gordon
(Coauthor: Senator Hill)
FEBRUARY 19, 2016
An act to amend Section 650 of the Business and Professions Code,
relating to the healing arts.
LEGISLATIVE COUNSEL'S DIGEST
AB 2744, as amended, Gordon. Healing arts: referrals.
Existing law provides for the licensure and regulation of various
healing arts professions and vocations by boards within the
Department of Consumer Affairs. Under existing law, it is unlawful
for licensed healing arts practitioners, except as specified, to
offer, deliver, receive, or accept any rebate, refund, commission,
preference, patronage dividend, discount, or other consideration, in
the form of money or otherwise, as compensation or inducement for
referring patients, clients, or customers to any person. Existing law
makes a violation of this provision a public offense punishable upon
a first conviction by imprisonment, as specified, or a fine not
exceeding $50,000, or by imprisonment and that fine.
This bill would provide that the payment or receipt of
consideration for advertising, wherein a licensed healing arts
practitioner offers or sells services on an Internet
platform, through a third -party advertiser
does not constitute a referral of patients.
patients when the third -party advertiser does not
itself recommend, endorse, or otherwise select a licensee. The
bill would require the purchaser of the service to receive a refund
of the full purchase price if the licensee determines, after
consultation with the purchaser, that the service is not appropriate
for the purchaser. The bill would specify that these provisions do
not apply to basic health care services or essential health benefits,
as defined. The bill would also provide that the entity that
provides advertising is required to be able to demonstrate that the
licensee consented in writing to these provisions. The bill
would require a third -party advertiser to make available
for purchase services advertised by all licensees in the applicable
geographic region.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 650 of the Business and Professions Code is
amended to read:
650. (a) Except as provided in Chapter 2.3 (commencing with
Section 1400) of Division 2 of the Health and Safety Code, the offer,
delivery, receipt, or acceptance by any person licensed under this
division or the Chiropractic Initiative Act of any rebate, refund,
commission, preference, patronage dividend, discount, or other
consideration, whether in the form of money or otherwise, as
compensation or inducement for referring patients, clients, or
customers to any person, irrespective of any membership, proprietary
interest, or coownership in or with any person to whom these
patients, clients, or customers are referred is unlawful.
(b) The payment or receipt of consideration for services other
than the referral of patients which is based on a percentage of gross
revenue or similar type of contractual arrangement shall not be
unlawful if the consideration is commensurate with the value of the
services furnished or with the fair rental value of any premises or
equipment leased or provided by the recipient to the payer.
(c) The offer, delivery, receipt, or acceptance of any
consideration between a federally qualified health center, as defined
in Section 1396d(l)(2)(B) of Title 42 of the United States Code, and
any individual or entity providing goods, items, services,
donations, loans, or a combination thereof to the health center
entity pursuant to a contract, lease, grant, loan, or other
agreement, if that agreement contributes to the ability of the health
center entity to maintain or increase the availability, or enhance
the quality, of services provided to a medically underserved
population served by the health center, shall be permitted only to
the extent sanctioned or permitted by federal law.
(d) Except as provided in Chapter 2.3 (commencing with Section
1400) of Division 2 of the Health and Safety Code and in Sections
654.1 and 654.2 of this code, it shall not be unlawful for any person
licensed under this division to refer a person to any laboratory,
pharmacy, clinic (including entities exempt from licensure pursuant
to Section 1206 of the Health and Safety Code), or health care
facility solely because the licensee has a proprietary interest or
coownership in the laboratory, pharmacy, clinic, or health care
facility, provided, however, that the licensee's return on investment
for that proprietary interest or coownership shall be based upon the
amount of the capital investment or proportional ownership of the
licensee which ownership interest is not based on the number or value
of any patients referred. Any referral excepted under this section
shall be unlawful if the prosecutor proves that there was no valid
medical need for the referral.
(e) Except as provided in Chapter 2.3 (commencing with Section
1400) of Division 2 of the Health and Safety Code and in Sections
654.1 and 654.2 of this code, it shall not be unlawful to provide
nonmonetary remuneration, in the form of hardware, software, or
information technology and training services, as described in
subsections (x) and (y) of Section 1001.952 of Title 42 of the Code
of Federal Regulations, as amended October 4, 2007, as published in
the Federal Register (72 Fed. Reg. 56632 and 56644), and subsequently
amended versions.
(f) "Health care facility" means a general acute care hospital,
acute psychiatric hospital, skilled nursing facility, intermediate
care facility, and any other health facility licensed by the State
Department of Public Health under Chapter 2 (commencing with Section
1250) of Division 2 of the Health and Safety Code.
(g) The payment or receipt of consideration for advertising,
wherein a licensee offers or sells services on an Internet
platform, through a third -party
advertiser, shall not constitute a referral of
patients. patients when the third -party
advertiser does not itself recommend, endorse, or otherwise select a
licensee. To the extent the licensee determines, after
consultation with the purchaser of the service, that the service is
not appropriate for the purchaser, the purchaser shall receive a
refund of the full purchase price. This subdivision shall not apply
to basic health care services, as defined in subdivision (b) of
Section 1345 of the Health and Safety Code, or essential health
benefits, as defined in Section 1367.005 of the Health and Safety
Code and Section 10112.27 of the Insurance Code. The entity that
provides the advertising shall be able to demonstrate that the
licensee consented in writing to the requirements of this
subdivision. A third -party advertiser shall make
available for purchase services advertised by all licensees in the
applicable geographic region.
(h) A violation of this section is a public offense and is
punishable upon a first conviction by imprisonment in a county jail
for not more than one year, or by imprisonment pursuant to
subdivision (h) of Section 1170 of the Penal Code, or by a fine not
exceeding fifty thousand dollars ($50,000), or by both that
imprisonment and fine. A second or subsequent conviction is
punishable by imprisonment pursuant to subdivision (h) of Section
1170 of the Penal Code, or by that imprisonment and a fine of fifty
thousand dollars ($50,000).