BILL ANALYSIS Ó
AB 2744
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CONCURRENCE IN SENATE AMENDMENTS
AB
2744 (Gordon)
As Amended August 8, 2016
Majority vote
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|ASSEMBLY: |78-0 |(May 12, 2016) |SENATE: |37-0 |(August 16, |
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Original Committee Reference: B. & P.
SUMMARY: Clarifies that certain types of advertising do not
constitute a referral when the third party advertiser does not
recommend, endorse, or otherwise select a healing arts licensee
to provide the service, as specified.
The Senate amendments:
1)Clarify that the payment or receipt of consideration for
advertising, wherein a licensee offers or sells services
through a third-party advertiser does not constitute a
referral of patients when the third-party advertiser does not
itself recommend, endorse, or otherwise select a licensee.
2)Specify that the fee paid to a third-party advertiser is
commensurate with the service provided by the third-party
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advertiser.
3)Clarify the refund policy.
4)Require a licensee to disclose in the advertisement that a
consultation is required and that the purchaser will receive a
refund if not eligible to receive the service.
5)Require a third-party advertiser to make available to
prospective purchasers advertisements for services of all
licensees then advertising through the third-party advertiser
in the applicable geographic region.
6)Specify that in any advertisement offering a discount price
for a service, the licensee must also disclose the regular,
non-discounted price for that service.
7)Make other technical clarifying amendment.
FISCAL EFFECT: According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, this bill will result
in negligible state costs.
COMMENTS:
Purpose. This bill seeks to clarify that the purchase of
professional services from licensed healing arts professionals
through an online advertising Web site does not constitute a
referral for those services from the online advertisement
originator when the third-party advertiser does not itself
recommend, endorse, or otherwise select a licensee. This bill
is sponsored by the Internet Association. According to the
author, "in the past, if a healthcare professional wanted to
advertise for his or her services, [he or she] could take out an
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advertisement in the yellow pages or a newspaper, purchase space
on a billboard, or run a commercial on radio or television.
"In each of these instances, the advertisement could also
include a coupon or special offer for readers/ listeners.
Technology has now made it possible for a healthcare
professional to advertise online and provide opportunities to
purchase vouchers for services in online marketplaces such as
Groupon, Living Social, and others.
"[This bill] would recognize that online advertising involving
the purchase of vouchers for services offered by a healthcare
professional is just another form of advertising and clarify
that it is not an impermissible referral."
Background. Existing law specifies that a licensed healing arts
professional may not accept any type of compensation for
referring an individual to any other person for services. This
prohibition on the payment of a healthcare provider for a
referral of services was intended to protect patients and
consumers from providers receiving payments or "kickbacks" for
sending patients to certain providers. Anti-kickback laws were
enacted to help ensure that healthcare decisions are made in the
best interest of the consumer. In California, a violation of
the no-referral laws by a licensee is unprofessional conduct and
cause for disciplinary action.
Internet Platform Services. There are a variety of advertised
healthcare-related services that individuals may purchase
through an Internet platform including, laser toenail fungus
removal, nonsurgical facelifts, spider vein treatments,
counseling, and integrative manual therapy sessions. A great
number of healthcare related services offered through an
Internet platform include elective procedures. As currently
drafted, this bill clarifies that only specified healthcare
services that are purchased through an Internet platform will
not be considered as a referral of those services. This bill
specifies that "basic health care services" as defined under
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Health and Safety Code Section (HSC) 1345 and "essential health
benefits" as defined in HSC Section 1367.005 and Insurance Code
(INS) Section 10112.27 that are purchased through an Internet
platform will still be subject to current Business and
Professions Code (BPC) Section 650(a), which prohibits payment
or any other consideration for a referral of services.
Essential health benefits and basic health care services.
Basic health care services are specified under the Knox-Keene
Health Care Service Plan Act of 1975, and essential health
benefits are specified under the federal Patient Protection and
Affordable Care Act. This bill seeks to clarify that those
services considered essential health benefits and basic health
care services are not applicable to the authorization provided
by this bill.
BPC Section 650(b) specifies that 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 is not unlawful, unless specified conditions are
met. It is the intent of the author that services offered
through an Internet platform would permit those services.
Online Advertising and Sales of Service. This bill clarifies
that a licensed healing arts professional, who utilizes an
online service provider to offer prepaid services to the general
public, does not constitute a "referral" of those services.
Online sales and advertising forums will charge a fee to the
service provider to display the sale of services, where an
individual interested in those services will purchase those
services directly from the online service provider. According
to the author, "the following describes how online voucher
advertising operates, the healthcare professional decides
whether to advertise and what service to make available for
purchase, the cost for the service, how many vouchers to offer,
and for how long. The healthcare professional pays the online
advertising network for making the offer available, generally a
percentage of the price of the purchased service. Once a
consumer purchases a voucher through this form of online
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advertising, the consumer contacts the healthcare professional
to set an appointment, just as they would if responding to any
other form of advertisement.
After purchasing, the consumer decides whether a particular
service is right for him or herself only after consulting with
the healthcare professional. If the consumer decides not to
receive the service, or if the professional decides the service
is not warranted, the consumer receives a full refund and incurs
no financial penalty."
Pending Attorney General Opinion. Currently, the Attorney
General's Opinion Unit is in the process of researching and
drafting a formal opinion on the question of whether a
healthcare professional may offer online discounts for their
services through a third-party Internet marketer. The opinion
request, 13-1203, is currently pending completion in the
Attorney General's office. At this time, the completion date is
unknown. This bill aims to clarify that those services offered
via and Internet platform, does not constitute a referral of
services in violation of BPC Section 650(a). This bill does not
change the existing prohibition against licensed healthcare
professionals receiving a payment or any other consideration,
monetary or otherwise for referring an individual to another
person for professional services.
Analysis Prepared by:
Elissa Silva / B. & P. / (916) 319-3301 FN:
0003939
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