General ProvisionsUnearned Rebates, Refunds and Discounts
Section § 650
This law generally makes it illegal for licensed individuals, like doctors or chiropractors, to receive money or other benefits for referring patients to another service. However, there are exceptions. It's okay to accept or give payment for services, as long as it's for something other than patient referrals and the payment matches the service's value. Health centers can receive certain kinds of payments if it helps serve underserved communities, as long as federal law allows it. Referrals due to financial interests are allowed if they're genuine and necessary. Advertising payments don't count as referrals if the advertiser remains neutral. Violating these rules can lead to fines or jail time.
Section § 650.01
This law makes it illegal for healthcare providers like doctors, nurse practitioners, and nurse-midwives to refer patients for certain services, like physical therapy or diagnostic imaging, if they or their immediate family members have a financial interest in the service provider. It covers various ways a financial interest might exist, such as ownership or compensation arrangements. If such a referral is made, providers must disclose these financial interests to the patient. Violations of this rule can lead to misdemeanor charges and fines. Some exceptions apply, and the law has been in effect since January 1, 1995.
Section § 650.02
This section outlines exceptions to the rule that generally prevents healthcare providers from referring patients to facilities where they have a financial interest. Exceptions include situations where no other provider is available within a reasonable distance, certain financial or lease arrangements that meet specific criteria, ownership of securities in publicly traded companies, and specific healthcare facilities. Additionally, it includes provisions for emergency services, nonprofit corporations with specific governance structures, university-affiliated services, in-office goods and services, cardiac rehabilitation, services in multispecialty clinics, health care plan enrollees, and specialized diagnostic and therapeutic services. These exceptions ensure that referrals may still happen under circumstances that protect against conflicts of interest.
Section § 650.1
This law makes it illegal for hospitals or certain entities that can't own pharmacy permits to have agreements where payment for leasing, renting, or service arrangements is based on a portion of the money made from pharmaceutical services or products. Existing leases were given until January 1, 1986, to comply with this rule. Older leases were considered compliant if they limited charges to match those in similar local hospitals. The enforcement of this rule is the responsibility of several California health and pharmacy boards, and both the person renting and the person leasing are liable for violations.
Section § 650.2
This law allows dentists to use group advertising and referral services as long as they meet specific rules. These rules include that patient referrals must come from patients responding to service ads, advertising must follow specific guidelines, and solicitors can't be used. The service can't charge dentists fees based on referrals or payments, and dentists must charge their usual rates. The service must register with the Dental Board of California and provide contract details, which will remain confidential. If most referrals go to a small group of dentists, this must be disclosed publicly. Ads must clearly state they are paid for by participating dentists. The Dental Board can enforce these rules, and running an unregistered service is a misdemeanor. This law doesn't allow such services to practice dentistry.
Section § 650.3
This law makes it legal for chiropractors to join or run advertising and referral groups if they follow certain rules. The referrals must come from patient-initiated contact based on advertising, and the service must follow specific advertising regulations. No solicitors can be used, and fees charged to member chiropractors can't be based on the number of referrals. Chiropractors must charge patients their normal fees, and the service must register with the State Board of Chiropractic Examiners and provide them with a confidential contract form. If one chiropractor gets more than half the referrals, this must be disclosed publicly. Violations can lead to legal action, and operating such a service without registering is illegal. The purpose is to let chiropractors share advertising costs without breaching other legal prohibitions.
Section § 651
This law prohibits licensed professionals, like doctors or podiatrists, from using false or misleading advertising. It details what makes an ad deceptive, such as misrepresenting facts or creating false expectations with altered images. Professionals can't claim superior skills without scientific proof and must be clear about prices without using vague terms like 'as low as.' They can't pay for media coverage unless disclosed, and must keep business materials like letterheads free from false claims. Violations can lead to fines, license suspension, or revocation. Ads should include factual information like practitioner names, office details, and qualifications, but must adhere to truthful advertising. Various health boards can establish rules for advertising these services, and the Attorney General can take legal action against violators. Specific penalties apply to intentional breaches by physicians or podiatrists.
Section § 651.3
This law allows labor organizations, employee groups, or associations to inform their members about health care benefits and costs when they have contracted services under a specific health plan. Any promotional materials or coverage documents related to these plans must follow certain health care regulations. These groups cannot make a profit from these health plans. Additionally, this law makes it clear that health care providers can't break advertising rules set by other health-related acts.
Section § 652
Section § 652.5
If someone breaks the rules in this section, they could face a misdemeanor charge. This applies to everyone, whether they have a professional license or not. If convicted, the punishment could be up to six months in county jail, a fine up to $2,500, or both.
Section § 653
This law defines "person" to mean not just human beings, but also businesses, organizations, and other entities such as companies and partnerships.
Section § 654
This rule prohibits doctors and other healthcare professionals from having financial ties, like owning shares or profit-sharing, with optometrists or similar services where they refer their patients. It's to prevent conflicts of interest and ensure referrals are based solely on the patient's best interests.
Section § 654.1
This law means that doctors and other health professionals can't send patients to a lab they have a financial interest in without telling the patient in writing. The patient must be informed they can choose any lab. But, this rule doesn't apply if they’re in a medical group under a registered health plan or if the lab is part of a licensed health facility. Labs can still send samples to each other if they say which lab is doing the test. Owning a building where a lab leases space isn’t considered ownership in the lab. Violating this can lead to jail time or fines.
Section § 654.2
This law makes it illegal for a licensed professional, like a doctor, to refer a patient to a business they or their family have a financial stake in, without telling the patient. They must disclose this information in writing and inform the patient they can choose any service provider they prefer. This can be done through a posted sign or a written statement given to patients. If another party, like an insurance company, asks, the professional also has to declare any financial interests to them once a year. There are exceptions to these rules, such as if the interest is only in a building lease at market rates, or in publicly traded stocks. The intention is transparency about potential conflicts of interest, so patients aren't unknowingly pressured into certain choices.
Section § 654.3
This section makes it illegal for certain licensed businesses to set up loans or credit lines, which have deferred interest, for their patients or clients. If a business does help arrange credit for payment of services, they must provide a clear treatment plan and several disclosures, including informing the patient of the ability to review and choose other payment options. They cannot charge for services or treatment not yet provided unless certain conditions are met, and must refund any unearned credit within 15 days upon request. The law also prohibits arranging credit if the patient is under sedation or in a medical area unless the patient agrees. These rules apply in both human and veterinary medical settings, with additional stipulations for patients receiving Medi-Cal. Affected patients can seek legal relief if harmed by a violation of this law, effective from July 1, 2020.
Section § 655
This section of the law is about the business relationships among optometrists, optical companies, health plans, and registered dispensing opticians. It prevents optometrists from sharing ownership or profits with registered dispensing opticians and optical companies, unless specific exceptions apply. Optical companies can own or have an interest in health plans but can't directly employ optometrists for services to plan members. Lease agreements must maintain optometrists' control over their practice and patient records. Several conditions are outlined to preserve the independence of optometrists, such as agreements on space and advertising. Violations can lead to fines, and optometrists, optical companies, and health plans must follow certain rules to avoid interference with optometric practice.
Section § 655.2
This law says that a doctor or medical company can't hire someone solely to fit or sell hearing aids unless they are licensed as a dispensing audiologist or hearing aid dispenser. On the flip side, if you're licensed to sell or fit hearing aids, you can't hire doctors or audiologists (who aren't also licensed to dispense hearing aids) for the same purpose. But, if a doctor is part of a health plan network under a specific health care law, these rules don't apply.
Section § 655.5
This law makes it illegal for healthcare providers, clinical labs, or health facilities to bill patients for lab services that were not actually provided unless the patient is told who performed the service and what it costs. Labs must also give a fee schedule to providers who refer patients to them if asked. Providers can't add extra charges for services that weren't performed. There are exceptions, like when contracts are made directly with prepaid health plans. Violating this law can lead to fines, jail time, or both, although doctors who charge less than usual may just get a reprimand for a first offense. Repeat offenses have stricter punishments.
Section § 655.7
This law sets rules for billing anatomic pathology services. Essentially, it prohibits licensed individuals from charging for these services unless they actually perform them or directly supervise someone else doing so. However, clinical labs can charge if another lab provides the services or if they have affiliated labs that carry out the work. Payment for these services can only be sought from the patient, their insurer, or specific health entities like hospitals. The law outlines several exceptions, such as prepaid health plans or services offered on a sliding scale for low-income patients. It also defines what qualifies as anatomic pathology services, covering a range of lab procedures like histopathology and cytopathology.
Section § 655.8
This law makes it illegal for licensed medical professionals to charge for CT, PET, or MRI imaging services unless they or their supervised team provide those services directly. Imaging centers need to bill the patient or their insurer, not the referring doctor. There are exceptions, like when services are provided free, on a sliding scale, or through certain health programs. Doctors can bundle charges for professional and technical parts only if they don't order the test themselves and also interpret the results. The law explains terms like 'physician entity' and 'technical component' and clarifies that imaging centers can't practice medicine by this rule.
Section § 656
If someone is doing or about to do something against the rules in this article, the court can step in and issue an order to stop them. This can be done by several groups like the California State Board of Optometry or the Attorney General. Any legal action under this law follows specific court procedures, and this law adds more options to existing ones for tackling such violations.
Section § 657
This law highlights that Californians spend a huge amount on health care every year, yet many residents lack insurance and access to basic health services, often turning to costly emergency care. The law authorizes health care providers to offer discounts for prompt payment of medical claims and to those who lack insurance or Medi-Cal coverage. Such discounts don't change what is considered the usual or reasonable fee in other contexts. This measure aims to make health care more affordable and accessible. It also defines who qualifies as a health care provider under this section, including licensed individuals and facilities.