§ 54.1-2411. Prohibited referrals and payments; exceptions.
A. Unless the practitioner directly provides health services within theentity and will be personally involved with the provision of care to thereferred patient, or has been granted an exception by the Board or satisfiesthe provisions of subsections D or E of this section or of subsections D or Eof § 54.1-2413, a practitioner shall not refer a patient for health servicesto an entity outside the practitioner's office or group practice if thepractitioner or any of the practitioner's immediate family members is aninvestor in such entity.
B. The Board may grant an exception to the prohibitions in this chapter, andmay permit a practitioner to invest in and refer to an entity, regardless ofwhether the practitioner provides direct services within such entity, ifthere is a demonstrated need in the community for the entity and all of thefollowing conditions are met:
1. Individuals other than practitioners are afforded a bona fide opportunityto invest in the entity on the same and equal terms as those offered to anyreferring practitioner;
2. No investor-practitioner is required or encouraged to refer patients tothe entity or otherwise generate business as a condition of becoming orremaining an investor;
3. The services of the entity are marketed and furnished topractitioner-investors and other investors on the same and equal terms;
4. The entity does not issue loans or guarantee any loans for practitionerswho are in a position to refer patients to such entity;
5. The income on the practitioner's investment is based on the practitioner'sequity interest in the entity and is not tied to referral volumes; and
6. The investment contract between the entity and the practitioner does notinclude any covenant or clause limiting or preventing the practitioner'sinvestment in other entities.
Unless the Board, the practitioner, or entity requests a hearing, the Boardshall determine whether to grant or deny an exception within 90 days of thereceipt of a written request from the practitioner or entity, stating thefacts of the particular circumstances and certifying compliance with theconditions required by this subsection. The Board's decision shall be a finaladministrative decision and shall be subject to judicial review pursuant tothe Administrative Process Act (§ 2.2-4000 et seq.).
C. When an exception is granted pursuant to subsection B:
1. The practitioner shall disclose his investment interest in the entity tothe patient at the time of referral. If alternative entities are reasonablyavailable, the practitioner shall provide the patient with a list of suchalternative entities and shall inform the patient of the option to use analternative entity. The practitioner shall also inform the patient thatchoosing another entity will not affect his treatment or care;
2. Information on the practitioner's investment shall be provided ifrequested by any third party payor;
3. The entity shall establish and utilize an internal utilization reviewprogram to ensure that practitioner-investors are engaging in appropriate andnecessary utilization; and
4. In the event of a conflict of interests between the practitioner'sownership interests and the best interests of any patient, the practitionershall not make a referral to such entity, but shall make alternativearrangements for the referral.
D. Further, a practitioner may refer patients for health services to apublicly traded entity in which such practitioner has an investment interest,without applying for or receiving an exception from the Board, if all of thefollowing conditions are met:
1. The entity's stock is listed for trading on the New York Stock Exchange orthe American Stock Exchange or is a national market system security tradedunder an automated interdealer quotation system operated by the NationalAssociation of Securities Dealers;
2. The entity had, at the end of the corporation's most recent fiscal year,total net assets of at least $50,000,000 related to the furnishing of healthservices;
3. The entity markets and furnishes its services to practitioner-investorsand other practitioners on the same and equal terms;
4. All stock of the entity, including the stock of any predecessor privatelyheld company, is one class without preferential treatment as to status orremuneration;
5. The entity does not issue loans or guarantee any loans for practitionerswho are in a position to refer patients to such entity;
6. The income on the practitioner's investment is not tied to referralvolumes and is based on the practitioner's equity interest in the entity; and
7. The practitioner's investment interest does not exceed one half of onepercent of the entity's total equity.
E. In addition, a practitioner may refer a patient to such practitioner'simmediate family member or such immediate family member's office or grouppractice for health services if all of the following conditions are met:
1. The health services to be received by the patient referred by thepractitioner are within the scope of practice of the practitioner's immediatefamily member or the treating practitioner within such immediate familymember's office or group practice;
2. The practitioner's immediate family member or the treating practitionerwithin such immediate family member's office or group practice is qualifiedand duly licensed to provide the health services to be received by thepatient referred to the practitioner;
3. The primary purpose of any such referral is to obtain the appropriateprofessional health services for the patient being referred, which are to berendered by the referring practitioner's immediate family member or by thetreating practitioner within such immediate family member's office or grouppractice who is qualified and licensed to provide such professional healthservices; and
4. The primary purpose of the referral shall not be for the provision ofdesignated health services as defined in 42 U.S.C. § 1395nn and theregulations promulgated thereunder.
§ 54.1-2411. Prohibited referrals and payments; exceptions.
A. Unless the practitioner directly provides health services within theentity and will be personally involved with the provision of care to thereferred patient, or has been granted an exception by the Board or satisfiesthe provisions of subsections D or E of this section or of subsections D or Eof § 54.1-2413, a practitioner shall not refer a patient for health servicesto an entity outside the practitioner's office or group practice if thepractitioner or any of the practitioner's immediate family members is aninvestor in such entity.
B. The Board may grant an exception to the prohibitions in this chapter, andmay permit a practitioner to invest in and refer to an entity, regardless ofwhether the practitioner provides direct services within such entity, ifthere is a demonstrated need in the community for the entity and all of thefollowing conditions are met:
1. Individuals other than practitioners are afforded a bona fide opportunityto invest in the entity on the same and equal terms as those offered to anyreferring practitioner;
2. No investor-practitioner is required or encouraged to refer patients tothe entity or otherwise generate business as a condition of becoming orremaining an investor;
3. The services of the entity are marketed and furnished topractitioner-investors and other investors on the same and equal terms;
4. The entity does not issue loans or guarantee any loans for practitionerswho are in a position to refer patients to such entity;
5. The income on the practitioner's investment is based on the practitioner'sequity interest in the entity and is not tied to referral volumes; and
6. The investment contract between the entity and the practitioner does notinclude any covenant or clause limiting or preventing the practitioner'sinvestment in other entities.
Unless the Board, the practitioner, or entity requests a hearing, the Boardshall determine whether to grant or deny an exception within 90 days of thereceipt of a written request from the practitioner or entity, stating thefacts of the particular circumstances and certifying compliance with theconditions required by this subsection. The Board's decision shall be a finaladministrative decision and shall be subject to judicial review pursuant tothe Administrative Process Act (§ 2.2-4000 et seq.).
C. When an exception is granted pursuant to subsection B:
1. The practitioner shall disclose his investment interest in the entity tothe patient at the time of referral. If alternative entities are reasonablyavailable, the practitioner shall provide the patient with a list of suchalternative entities and shall inform the patient of the option to use analternative entity. The practitioner shall also inform the patient thatchoosing another entity will not affect his treatment or care;
2. Information on the practitioner's investment shall be provided ifrequested by any third party payor;
3. The entity shall establish and utilize an internal utilization reviewprogram to ensure that practitioner-investors are engaging in appropriate andnecessary utilization; and
4. In the event of a conflict of interests between the practitioner'sownership interests and the best interests of any patient, the practitionershall not make a referral to such entity, but shall make alternativearrangements for the referral.
D. Further, a practitioner may refer patients for health services to apublicly traded entity in which such practitioner has an investment interest,without applying for or receiving an exception from the Board, if all of thefollowing conditions are met:
1. The entity's stock is listed for trading on the New York Stock Exchange orthe American Stock Exchange or is a national market system security tradedunder an automated interdealer quotation system operated by the NationalAssociation of Securities Dealers;
2. The entity had, at the end of the corporation's most recent fiscal year,total net assets of at least $50,000,000 related to the furnishing of healthservices;
3. The entity markets and furnishes its services to practitioner-investorsand other practitioners on the same and equal terms;
4. All stock of the entity, including the stock of any predecessor privatelyheld company, is one class without preferential treatment as to status orremuneration;
5. The entity does not issue loans or guarantee any loans for practitionerswho are in a position to refer patients to such entity;
6. The income on the practitioner's investment is not tied to referralvolumes and is based on the practitioner's equity interest in the entity; and
7. The practitioner's investment interest does not exceed one half of onepercent of the entity's total equity.
E. In addition, a practitioner may refer a patient to such practitioner'simmediate family member or such immediate family member's office or grouppractice for health services if all of the following conditions are met:
1. The health services to be received by the patient referred by thepractitioner are within the scope of practice of the practitioner's immediatefamily member or the treating practitioner within such immediate familymember's office or group practice;
2. The practitioner's immediate family member or the treating practitionerwithin such immediate family member's office or group practice is qualifiedand duly licensed to provide the health services to be received by thepatient referred to the practitioner;
3. The primary purpose of any such referral is to obtain the appropriateprofessional health services for the patient being referred, which are to berendered by the referring practitioner's immediate family member or by thetreating practitioner within such immediate family member's office or grouppractice who is qualified and licensed to provide such professional healthservices; and
4. The primary purpose of the referral shall not be for the provision ofdesignated health services as defined in 42 U.S.C. § 1395nn and theregulations promulgated thereunder.
§ 54.1-2411. Prohibited referrals and payments; exceptions.
A. Unless the practitioner directly provides health services within theentity and will be personally involved with the provision of care to thereferred patient, or has been granted an exception by the Board or satisfiesthe provisions of subsections D or E of this section or of subsections D or Eof § 54.1-2413, a practitioner shall not refer a patient for health servicesto an entity outside the practitioner's office or group practice if thepractitioner or any of the practitioner's immediate family members is aninvestor in such entity.
B. The Board may grant an exception to the prohibitions in this chapter, andmay permit a practitioner to invest in and refer to an entity, regardless ofwhether the practitioner provides direct services within such entity, ifthere is a demonstrated need in the community for the entity and all of thefollowing conditions are met:
1. Individuals other than practitioners are afforded a bona fide opportunityto invest in the entity on the same and equal terms as those offered to anyreferring practitioner;
2. No investor-practitioner is required or encouraged to refer patients tothe entity or otherwise generate business as a condition of becoming orremaining an investor;
3. The services of the entity are marketed and furnished topractitioner-investors and other investors on the same and equal terms;
4. The entity does not issue loans or guarantee any loans for practitionerswho are in a position to refer patients to such entity;
5. The income on the practitioner's investment is based on the practitioner'sequity interest in the entity and is not tied to referral volumes; and
6. The investment contract between the entity and the practitioner does notinclude any covenant or clause limiting or preventing the practitioner'sinvestment in other entities.
Unless the Board, the practitioner, or entity requests a hearing, the Boardshall determine whether to grant or deny an exception within 90 days of thereceipt of a written request from the practitioner or entity, stating thefacts of the particular circumstances and certifying compliance with theconditions required by this subsection. The Board's decision shall be a finaladministrative decision and shall be subject to judicial review pursuant tothe Administrative Process Act (§ 2.2-4000 et seq.).
C. When an exception is granted pursuant to subsection B:
1. The practitioner shall disclose his investment interest in the entity tothe patient at the time of referral. If alternative entities are reasonablyavailable, the practitioner shall provide the patient with a list of suchalternative entities and shall inform the patient of the option to use analternative entity. The practitioner shall also inform the patient thatchoosing another entity will not affect his treatment or care;
2. Information on the practitioner's investment shall be provided ifrequested by any third party payor;
3. The entity shall establish and utilize an internal utilization reviewprogram to ensure that practitioner-investors are engaging in appropriate andnecessary utilization; and
4. In the event of a conflict of interests between the practitioner'sownership interests and the best interests of any patient, the practitionershall not make a referral to such entity, but shall make alternativearrangements for the referral.
D. Further, a practitioner may refer patients for health services to apublicly traded entity in which such practitioner has an investment interest,without applying for or receiving an exception from the Board, if all of thefollowing conditions are met:
1. The entity's stock is listed for trading on the New York Stock Exchange orthe American Stock Exchange or is a national market system security tradedunder an automated interdealer quotation system operated by the NationalAssociation of Securities Dealers;
2. The entity had, at the end of the corporation's most recent fiscal year,total net assets of at least $50,000,000 related to the furnishing of healthservices;
3. The entity markets and furnishes its services to practitioner-investorsand other practitioners on the same and equal terms;
4. All stock of the entity, including the stock of any predecessor privatelyheld company, is one class without preferential treatment as to status orremuneration;
5. The entity does not issue loans or guarantee any loans for practitionerswho are in a position to refer patients to such entity;
6. The income on the practitioner's investment is not tied to referralvolumes and is based on the practitioner's equity interest in the entity; and
7. The practitioner's investment interest does not exceed one half of onepercent of the entity's total equity.
E. In addition, a practitioner may refer a patient to such practitioner'simmediate family member or such immediate family member's office or grouppractice for health services if all of the following conditions are met:
1. The health services to be received by the patient referred by thepractitioner are within the scope of practice of the practitioner's immediatefamily member or the treating practitioner within such immediate familymember's office or group practice;
2. The practitioner's immediate family member or the treating practitionerwithin such immediate family member's office or group practice is qualifiedand duly licensed to provide the health services to be received by thepatient referred to the practitioner;
3. The primary purpose of any such referral is to obtain the appropriateprofessional health services for the patient being referred, which are to berendered by the referring practitioner's immediate family member or by thetreating practitioner within such immediate family member's office or grouppractice who is qualified and licensed to provide such professional healthservices; and
4. The primary purpose of the referral shall not be for the provision ofdesignated health services as defined in 42 U.S.C. § 1395nn and theregulations promulgated thereunder.
