FLORIDA - REFERRALS

March 18, 2008

Florida state laws and regulations that affect your medical practice

I. CONSULTING PHYSICIANS FROM ANOTHER STATE

1. May a physician request a consultation from a physician licensed in another state?

Yes. Any physician lawfully licensed in another state or territory or foreign country may be consulted by a physician duly licensed to practice medicine in Florida.

Such physician is permitted to examine the patient, take a history and physical, review laboratory tests and x-rays, and make recommendations to a physician duly licensed in Florida with regard to diagnosis and treatment of the patient. However the term “consultation” does not include such physician's performance of any medical procedure on or the rendering of treatment to the patient.

F.S.A. § 458.303; 64 FL ADC 64B8-2.001

II. SELF-REFERRALS

1. What are the regulations governing the referral of patients by a physician to health care facilities in which the physician has a financial interest?

A health care provider may not refer a patient for the provision of designated health services to an entity in which the health care provider is an investor or has an investment interest unless he or she discloses that interest.

A. Disclosure of financial interest.

A health care provider must not refer a patient to an entity in which such provider is an investor unless, prior to the referral, the provider furnishes the patient with a written disclosure form, informing the patient of:

1. The existence of the investment interest.

2. The name and address of each applicable entity in which the referring health care provider is an investor.

3. The patient's right to obtain the items or services for which the patient has been referred at the location or from the provider or supplier of the patient's choice, including the entity in which the referring provider is an investor.

4. The names and addresses of at least two alternative sources of such items or services available to the patient.

F.S.A. § 456.052

B. Investment Interest.

Investment interest means an equity or debt security issued by an entity, including, without limitation, shares of stock in a corporation, units or other interests in a partnership, bonds, debentures, notes, or other equity interests or debt instruments.

The following investment interests are excepted from the above definition:

1. An investment interest in an entity that is the sole provider of designated health services in a rural area;

2. An investment interest in notes, bonds, debentures, or other debt instruments issued by an entity which provides designated health services, as an integral part of a plan by such entity to acquire such investor's equity investment interest in the entity, provided that the interest rate is consistent with fair market value, and that the maturity date of the notes, bonds, debentures, or other debt instruments issued by the entity to the investor is not later than October 1, 1996;

3. An investment interest in real property resulting in a landlord-tenant relationship between the health care provider and the entity in which the equity interest is held, unless the rent is determined, in whole or in part, by the business volume or profitability of the tenant or exceeds fair market value; or

4. An investment interest in an entity which owns or leases and operates a hospital or a nursing home facility.

C. Designated Health Services.

Designated health services means clinical laboratory services, physical therapy services, comprehensive rehabilitative services, diagnostic-imaging services, and radiation therapy services.

Diagnostic imaging services means magnetic resonance imaging, nuclear medicine, angiography, arteriography, computed tomography, positron emission tomography, digital vascular imaging, bronchography, lymphangiography, splenography, ultrasound, EEG, EKG, nerve conduction studies, and evoked potentials.

D. Investor.

Investor means a person or entity owning a legal or beneficial ownership or investment interest, directly or indirectly, including, without limitation, through an immediate family member (health care provider's spouse, child, child's spouse, grandchild, grandchild's spouse, parent, parent-in-law, or sibling), trust, or another entity “related to” the investor, in an entity.

E. Referrals for healthcare items other than designated health services.

A health care provider may not refer a patient for the provision of any other health care item or service to an entity in which the health care provider is an investor unless:

1. The provider's investment interest is in registered securities purchased on a national exchange or over-the-counter market and issued by a publicly held corporation:

i. Whose shares are traded on a national exchange or on the over-the-counter market; and

ii. Whose total assets at the end of the corporation's most recent fiscal quarter exceeded $50 million; or

2. With respect to an entity other than a publicly held corporation described in subparagraph E1., and a referring provider's investment interest in such entity, each of the following requirements are met:

i. No more than 50 percent of the value of the investment interests are held by investors who are in a position to make referrals to the entity.

ii. The terms under which an investment interest is offered to an investor who is in a position to make referrals to the entity are no different from the terms offered to investors who are not in a position to make such referrals.

iii. The terms under which an investment interest is offered to an investor who is in a position to make referrals to the entity are not related to the previous or expected volume of referrals from that investor to the entity.

iv. There is no requirement that an investor make referrals or be in a position to make referrals to the entity as a condition for becoming or remaining an investor.

3. With respect to either such entity or publicly held corporation, each of the following requirements is met:

a. The entity or corporation does not loan funds to or guarantee a loan for an investor who is in a position to make referrals to the entity or corporation if the investor uses any part of such loan to obtain the investment interest.

b. The amount distributed to an investor representing a return on the investment interest is directly proportional to the amount of the capital investment, including the fair market value of any preoperational services rendered, invested in the entity or corporation by that investor.

F. Requirements for accepting outside referrals for diagnostic imaging.

A group practice or sole provider accepting outside referrals for diagnostic imaging services is required to comply with the following conditions:

1. Diagnostic imaging services must be provided exclusively by a group practice physician or by a full-time or part-time employee of the group practice or of the sole provider's practice.

“Group practice” means a group of two or more health care providers legally organized as a partnership, professional corporation, or similar association:

i. in which each health care provider who is a member of the group provides substantially the full range of services which the health care provider routinely provides, including medical care, consultation, diagnosis, or treatment, through the joint use of shared office space, facilities, equipment, and personnel;

ii. In which substantially all of the services of the health care providers who are members of the group are provided through the group and are billed in the name of the group and amounts so received are treated as receipts of the group; and

iii. In which the overhead expenses of and the income from the practice are distributed in accordance with methods previously determined by members of the group.

2. All equity in the group practice or sole provider's practice accepting outside referrals for diagnostic imaging must be held by the physicians comprising the group practice or the sole provider's practice, each of whom must provide at least 75 percent of his or her professional services to the group.

Alternatively, the group must be incorporated and exempt under the provisions of s. 501(c)(3) of the Internal Revenue Code and be part of a foundation in existence prior to January 1, 1999, that is created for the purpose of patient care, medical education, and research.

3. A group practice or sole provider may not enter into, extend or renew any contract with a practice management company that provides any financial incentives, directly or indirectly, based on an increase in outside referrals for diagnostic imaging services from any group or sole provider managed by the same practice management company.

4. The group practice or sole provider accepting outside referrals for diagnostic imaging services must bill for both the professional and technical component of the service on behalf of the patient, and no portion of the payment, or any type of consideration, either directly or indirectly, may be shared with the referring physician.

5. Group practices or sole providers that have a Medicaid provider agreement with the Agency for Health Care Administration must furnish diagnostic imaging services to their Medicaid patients and may not refer a Medicaid recipient to a hospital for outpatient diagnostic imaging services unless the physician furnishes the hospital with documentation demonstrating the medical necessity for such a referral. If necessary, the Agency for Health Care Administration may apply for a federal waiver to implement this requirement.

6. All group practices and sole providers accepting outside referrals for diagnostic imaging must report annually to the Agency for Health Care Administration providing the number of outside referrals accepted for diagnostic imaging services and the total number of all patients receiving diagnostic imaging services.

7. Each managing physician member of a group practice and each sole provider who accepts outside referrals for diagnostic imaging services must submit an annual attestation signed under oath to the Agency for Health Care Administration which must include the annual report required under subparagraph F(6). and which must further confirm that each group practice or sole provider is in compliance with the percentage limitations for accepting outside referrals and the requirements for accepting outside referrals.

G. Claims and Payment.

No claim for payment may be presented by an entity to any individual, third-party payor, or other entity for a service furnished pursuant to a prohibited referral.

If an entity collects any amount that was billed in violation of this section, the entity must refund such amount on a timely basis to the payor or individual, whichever is applicable.

H. Radiation Therapy.

The prohibition on referrals to an entity in which the health care provider is an investor or has an investment interest does not apply to referrals to the offices of radiation therapy centers managed by an entity or subsidiary or general partner thereof, which performed radiation therapy services at those same offices prior to April 1, 1991, and does not apply also to referrals for radiation therapy to be performed at no more than one additional office of any entity qualifying for the foregoing exception which, prior to February 1, 1992, had a binding purchase contract on and a nonrefundable deposit paid for a linear accelerator to be used at the additional office.

F.S.A. § 456.053

Copyright © Kern Augustine Conroy and Schoppmann, P.C. Used with permission.

Updated 2008