LC section 139.3 Surgery Centers (California)

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LC section 139.3 Surgery Centers (California)

Postby suekarp on Mon Jan 23, 2012 8:26 am

We have run into an issue with a surgery center owned by a group of physicians who treat our injured workers. The problem comes up when we ask the physician if they have a financial interest in the surgery center where they plan to do the surgery or procedure at. The MD office acknowledges that their physician does have a financial interest in the surgery center.

When we ask for an alternative location for the surgery or procedure to be done, the physician's staff indicates that the MD does not have privileges elsewhere.

It seems clear to me that this is a prohibited self-referral. My question is, what do you do about it? Has anyone dealt with this situation in the past and been successful at stopping the self-referral? Any ideas in how to tackle this?
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Re: LC section 139.3 Surgery Centers (California)

Postby on Tue Jan 24, 2012 2:36 pm

tell them no, they need to refer the injured worker to a physician with privileges at surgery centers or hospitals where they do not have a financial interest, as it is specifically barred. CC the applicant attorney with your legally based denial and write a letter further outlining the illegality of the self-referral and suggest they have a conversation with their physician.

They find out the injured worker is not being treated, it usually gets cleaned up quickly and for the applicant attorneys who do not respond, we then file a DOR on the issue.
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Re: LC section 139.3 Surgery Centers (California)

Postby jonbrissman on Thu Jan 26, 2012 5:53 pm

Let's not leap to conclusions. Attached is a legal opinion that was widely circulated in 2003 when this issue first arose. It concludes that physicians who have an ownership interest in an ambulatory surgery center (ASC) and share a portion of the overall profits thereof, but whose compensation is not tied to the business he refers to the ASC, is not violating Section 139.3. The letter convinced one defendant to withdraw its attack on one of my ASC clients. I have seen no case law that disputes the conclusions drawn in the attached opinion.

Suekarp, you may need to take a depo or two to determine how the physician's compensation from the ASC is structured. I suggest that ownership, in itself, does not disqualify the referral.

139.3 self-referral opinion.pdf
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Re: LC section 139.3 Surgery Centers (California) (California)

Postby suekarp on Fri Jan 27, 2012 8:06 am

Thank you for the case. It will make interesting discussion around the office. One attorney that I shared these postings with advised extreme caution because of the ultimate result, potential criminal - albeit misdomeanor penalties in addition to dicipline by the physician's medical specialty board.

I think that we'll just say, "thank you for the disclosure", then make our decision based on medical, legal or factual information about the need for the surgery.
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