139.31
. The prohibition of Section 139.3 shall not apply to or
restrict any of the following:
(a) A physician may refer a patient for a good or service
otherwise prohibited by subdivision (a) of Section 139.3 if the
physician's regular practice is where there is no alternative
provider of the service within either 25 miles or 40 minutes
traveling time, via the shortest route on a paved road. A physician
who refers to, or seeks consultation from, an organization in which
the physician has a financial interest under this subdivision shall
disclose this interest to the patient or the patient's parents or
legal guardian in writing at the time of referral.
(b) A physician who has one or more of the following arrangements
with another physician, a person, or an entity, is not prohibited
from referring a patient to the physician, person, or entity because
of the arrangement:
(1) A loan between a physician and the recipient of the referral,
if the loan has commercially reasonable terms, bears interest at the
prime rate or a higher rate that does not constitute usury, is
adequately secured, and the loan terms are not affected by either
party's referral of any person or the volume of services provided by
either party.
(2) A lease of space or equipment between a physician and the
recipient of the referral, if the lease is written, has commercially
reasonable terms, has a fixed periodic rent payment, has a term of
one year or more, and the lease payments are not affected by either
party's referral of any person or the volume of services provided by
either party.
(3) A physician's ownership of corporate investment securities,
including shares, bonds, or other debt instruments that were
purchased on terms that are available to the general public through a
licensed securities exchange or NASDAQ, do not base profit
distributions or other transfers of value on the physician's referral
of persons to the corporation, do not have a separate class or
accounting for any persons or for any physicians who may refer
persons to the corporation, and are in a corporation that had, at the
end of the corporation's most recent fiscal year, total gross assets
exceeding one hundred million dollars ($100,000,000).
(4) A personal services arrangement between a physician or an
immediate family member of the physician and the recipient of the
referral if the arrangement meets all of the following requirements:
(A) It is set out in writing and is signed by the parties.
(B) It specifies all of the services to be provided by the
physician or an immediate family member of the physician.
(C) The aggregate services contracted for do not exceed those that
are reasonable and necessary for the legitimate business purposes of
the arrangement.
(D) A written notice disclosing the existence of the personal
services arrangement and including information on where a person may
go to file a complaint against the licensee or the immediate family
member of the licensee, is provided to the following persons at the
time any services pursuant to the arrangement are first provided:
(i) An injured worker who is referred by a licensee or an
immediate family member of the licensee.
(ii) The injured worker's employer, if self-insured.
(iii) The injured worker's employer's insurer, if insured.
(iv) If the injured worker is known by the licensee or the
recipient of the referral to be represented, the injured worker's
attorney.
(E) The term of the arrangement is for at least one year.
(F) The compensation to be paid over the term of the arrangement
is set in advance, does not exceed fair market value, and is not
determined in a manner that takes into account the volume or value of
any referrals or other business generated between the parties,
except that if the services provided pursuant to the arrangement
include medical services provided under Division 4, compensation paid
for the services shall be subject to the official medical fee
schedule promulgated pursuant to Section 5307.1 or subject to any
contract authorized by Section 5307.11.
(G) The services to be performed under the arrangement do not
involve the counseling or promotion of a business arrangement or
other activity that violates any state or federal law.
(c) (1) A physician may refer a person to a health facility as
defined in Section 1250 of the Health and Safety Code, to any
facility owned or leased by a health facility, or to an outpatient
surgical center, if the recipient of the referral does not compensate
the physician for the patient referral, and any equipment lease
arrangement between the physician and the referral recipient complies
with the requirements of paragraph (2) of subdivision (b).
(2) Nothing shall preclude this subdivision from applying to a
physician solely because the physician has an ownership or leasehold
interest in an entire health facility or an entity that owns or
leases an entire health facility.
(3) A physician may refer a person to a health facility for any
service classified as an emergency under subdivision (a) or (b) of
Section 1317.1 of the Health and Safety Code. For nonemergency
outpatient diagnostic imaging services performed with equipment for
which, when new, has a commercial retail price of four hundred
thousand dollars ($400,000) or more, the referring physician shall
obtain a service preauthorization from the insurer, or self-insured
employer. Any oral authorization shall be memorialized in writing
within five business days.
(d) A physician compensated or employed by a university may refer
a person to any facility owned or operated by the university, or for
a physician service, to another physician employed by the university,
provided that the facility or university does not compensate the
referring physician for the patient referral. For nonemergency
diagnostic imaging services performed with equipment that, when new,
has a commercial retail price of four hundred thousand dollars
($400,000) or more, the referring physician shall obtain a service
preauthorization from the insurer or self-insured employer. An oral
authorization shall be memorialized in writing within five business
days. In the case of a facility which is totally or partially owned
by an entity other than the university, but which is staffed by
university physicians, those physicians may not refer patients to the
facility if the facility compensates the referring physician for
those referrals.
(e) The prohibition of Section 139.3 shall not apply to any
service for a specific patient that is performed within, or goods
that are supplied by, a physician's office, or the office of a group
practice. Further, the provisions of Section 139.3 shall not alter,
limit, or expand a physician's ability to deliver, or to direct or
supervise the delivery of, in-office goods or services according to
the laws, rules, and regulations governing his or her scope of
practice. With respect to diagnostic imaging services performed with
equipment that, when new, had a commercial retail price of four
hundred thousand dollars ($400,000) or more, or for physical therapy
services, or for psychometric testing that exceeds the routine
screening battery protocols, with a time limit of two to five hours,
established by the administrative director, the referring physician
obtains a service preauthorization from the insurer or self-insured
employer. Any oral authorization shall be memorialized in writing
within five business days.
(f) The prohibition of Section 139.3 shall not apply where the
physician is in a group practice as defined in Section 139.3 and
refers a person for services specified in Section 139.3 to a
multispecialty clinic, as defined in subdivision (l) of Section 1206
of the Health and Safety Code. For diagnostic imaging services
performed with equipment that, when new, had a commercial retail
price of four hundred thousand dollars ($400,000) or more, or
physical therapy services, or psychometric testing that exceeds the
routine screening battery protocols, with a time limit of two to five
hours, established by the administrative director, performed at the
multispecialty facility, the referring physician shall obtain a
service preauthorization from the insurer or self-insured employer.
Any oral authorization shall be memorialized in writing within five
business days.
(g) The requirement for preauthorization in Sections (c), (e), and
(f) shall not apply to a patient for whom the physician or group
accepts payment on a capitated risk basis.
(h) The prohibition of Section 139.3 shall not apply to any
facility when used to provide health care services to an enrollee of
a health care service plan licensed pursuant to the Knox-Keene Health
Care Service Plan Act of 1975 (Chapter 2.2 (commencing with Section
1340) of Division 2 of the Health and Safety Code).
(i) The prohibition of Section 139.3 shall not apply to an
outpatient surgical center, as defined in paragraph (7) of
subdivision (b) of Section 139.3, where the referring physician
obtains a service preauthorization from the insurer or self-insured
employer after disclosure of the financial relationship.
(j) The prohibition of Section 139.3 shall not apply to a
physician's financial interest in a retailer of prescription drugs
sold by a physical retail outlet commonly accessed by the public or a
mail-order pharmacy serving a broad national or regional market,
provided that the majority of the physician's practice, with regard
to income, time, and number of patients, does not relate to
occupational medicine and the physician receives no remuneration from
the retailer of prescription drugs to market or otherwise solicit
occupational injury or occupational disease patients.