February 05, 2016

State Legislatures Address Varied Self Referral Proposals

State legislatures will consider physician self-referral bills in 2016 ranging from a blanket prohibition with key exceptions in Pennsylvania (House Bill 274) to a legislative proposal in New Jersey to exempt only certain services from its prohibition against physicians referring patients for health care services in which the physician or the physician’s family has a financial interest (Assembly Bill 4780).

Pennsylvania (House Bill 274) mirrors longstanding federal Stark self-referral laws and regulations. It exempts radiologists, radiation oncologists, and pathologists and in-office ancillary services performed at the same site as other medical services performed by physicians or medical group practices that own the equipment.

Virginia’s Senate Bill 201 clarifies rules prohibiting the division of fees among physicians. More specifically, it provides that rules prohibiting a division of fees among physicians will not prohibit members of a physician group from making any division of their total fees among themselves or using their joint fees to defray their joint operating costs.

Strict self-referral prohibitions are facing more scrutiny by the states as more health care is delivered by coordinated team-based arrangements. Their stakeholders are exerting more pressure on state lawmakers to relax existing self-referral statutes to accommodate emerging business arrangements among multi-specialty group practices.