As a result of active enforcement by the Office of the Inspector General (OIG) and resulting media coverage, healthcare providers in California are generally far better acquainted with federal self-referral limitations (i.e. the “Stark law” and Anti-Kickback Statute) than they are with requirements of state law.
California’s Physician Outpatient Referral Act (“PORA”), Business & Professions Code Section 650 et seq., recognizes several exceptions that are roughly consistent with federal law. There, are, however, several key differences:
(1) critically, in contrast to the federal Stark law, which applies only to referrals of Medicare and Medi-Cal patients for “designated health services” to entities with which the physician has a financial relationship, PORA applies broadly to referrals of all patients, including those with private health insurance or even cash patients;
(2) the definition of “designated health services” –the relevant category for Stark purposes –varies slightly from the range of services covered by PORA;
(3) finally, as Stark has undergone successive rounds of amendment to its exceptions (Stark II, Phase III, etc.), PORA has not undergone parallel amendments.
Recommended Action: Providers should not take compliance with PORA for granted. Although state enforcement of PORA has been far less active than OIG enforcement of the Stark law, there have been some indications that the Medical Board of California and the State intend to be more active in enforcement of PORA in the future. As a result, it is essential for providers to protect themselves by verifying compliance with both state and federal law.
Harry Nelson is a partner in Fenton & Nelson, LLP. Fenton & Nelson counsels healthcare providers on compliance with federal and state regulatory and business requirements. For additional information, please contact him at harry@fentonnelson.com
©Harry Nelson 2008
