650-657
BUSINESS AND PROFESSIONS CODE
SECTION 650-657
650. (a) Except as provided in Chapter 2.3 (commencing with Section
1400) of Division 2 of the Health and Safety Code, the offer,
delivery, receipt, or acceptance by any person licensed under this
division or the Chiropractic Initiative Act of any rebate, refund,
commission, preference, patronage dividend, discount, or other
consideration, whether in the form of money or otherwise, as
compensation or inducement for referring patients, clients, or
customers to any person, irrespective of any membership, proprietary
interest, or coownership in or with any person to whom these
patients, clients, or customers are referred is unlawful.
(b) The payment or receipt of consideration for services other
than the referral of patients which is based on a percentage of gross
revenue or similar type of contractual arrangement shall not be
unlawful if the consideration is commensurate with the value of the
services furnished or with the fair rental value of any premises or
equipment leased or provided by the recipient to the payer.
(c) The offer, delivery, receipt, or acceptance of any
consideration between a federally qualified health center, as defined
in Section 1396d(l)(2)(B) of Title 42 of the United States Code, and
any individual or entity providing goods, items, services,
donations, loans, or a combination thereof to the health center
entity pursuant to a contract, lease, grant, loan, or other
agreement, if that agreement contributes to the ability of the health
center entity to maintain or increase the availability, or enhance
the quality, of services provided to a medically underserved
population served by the health center, shall be permitted only to
the extent sanctioned or permitted by federal law.
(d) Except as provided in Chapter 2.3 (commencing with Section
1400) of Division 2 of the Health and Safety Code and in Sections
654.1 and 654.2 of this code, it shall not be unlawful for any person
licensed under this division to refer a person to any laboratory,
pharmacy, clinic (including entities exempt from licensure pursuant
to Section 1206 of the Health and Safety Code), or health care
facility solely because the licensee has a proprietary interest or
coownership in the laboratory, pharmacy, clinic, or health care
facility, provided, however, that the licensee's return on investment
for that proprietary interest or coownership shall be based upon the
amount of the capital investment or proportional ownership of the
licensee which ownership interest is not based on the number or value
of any patients referred. Any referral excepted under this section
shall be unlawful if the prosecutor proves that there was no valid
medical need for the referral.
(e) Except as provided in Chapter 2.3 (commencing with Section
1400) of Division 2 of the Health and Safety Code and in Sections
654.1 and 654.2 of this code, it shall not be unlawful to provide
nonmonetary remuneration, in the form of hardware, software, or
information technology and training services, as described in
subsections (x) and (y) of Section 1001.952 of Title 42 of the Code
of Federal Regulations, as amended October 4, 2007, as published in
the Federal Register (72 Fed. Reg. 56632 and 56644), and subsequently
amended versions.
(f) "Health care facility" means a general acute care hospital,
acute psychiatric hospital, skilled nursing facility, intermediate
care facility, and any other health facility licensed by the State
Department of Public Health under Chapter 2 (commencing with Section
1250) of Division 2 of the Health and Safety Code.
(g) A violation of this section is a public offense and is
punishable upon a first conviction by imprisonment in a county jail
for not more than one year, or by imprisonment in the state prison,
or by a fine not exceeding fifty thousand dollars ($50,000), or by
both that imprisonment and fine. A second or subsequent conviction is
punishable by imprisonment in the state prison or by imprisonment in
the state prison and a fine of fifty thousand dollars ($50,000).
650.01. (a) Notwithstanding Section 650, or any other provision of
law, it is unlawful for a licensee to refer a person for laboratory,
diagnostic nuclear medicine, radiation oncology, physical therapy,
physical rehabilitation, psychometric testing, home infusion therapy,
or diagnostic imaging goods or services if the licensee or his or
her immediate family has a financial interest with the person or in
the entity that receives the referral.
(b) For purposes of this section and Section 650.02, the following
shall apply:
(1) "Diagnostic imaging" includes, but is not limited to, all
X-ray, computed axial tomography, magnetic resonance imaging nuclear
medicine, positron emission tomography, mammography, and ultrasound
goods and services.
(2) A "financial interest" includes, but is not limited to, any
type of ownership interest, debt, loan, lease, compensation,
remuneration, discount, rebate, refund, dividend, distribution,
subsidy, or other form of direct or indirect payment, whether in
money or otherwise, between a licensee and a person or entity to whom
the licensee refers a person for a good or service specified in
subdivision (a). A financial interest also exists if there is an
indirect financial relationship between a licensee and the referral
recipient including, but not limited to, an arrangement whereby a
licensee has an ownership interest in an entity that leases property
to the referral recipient. Any financial interest transferred by a
licensee to any person or entity or otherwise established in any
person or entity for the purpose of avoiding the prohibition of this
section shall be deemed a financial interest of the licensee. For
purposes of this paragraph, "direct or indirect payment" shall not
include a royalty or consulting fee received by a physician and
surgeon who has completed a recognized residency training program in
orthopedics from a manufacturer or distributor as a result of his or
her research and development of medical devices and techniques for
that manufacturer or distributor. For purposes of this paragraph,
"consulting fees" means those fees paid by the manufacturer or
distributor to a physician and surgeon who has completed a recognized
residency training program in orthopedics only for his or her
ongoing services in making refinements to his or her medical devices
or techniques marketed or distributed by the manufacturer or
distributor, if the manufacturer or distributor does not own or
control the facility to which the physician is referring the patient.
A "financial interest" shall not include the receipt of capitation
payments or other fixed amounts that are prepaid in exchange for a
promise of a licensee to provide specified health care services to
specified beneficiaries. A "financial interest" shall not include the
receipt of remuneration by a medical director of a hospice, as
defined in Section 1746 of the Health and Safety Code, for specified
services if the arrangement is set out in writing, and specifies all
services to be provided by the medical director, the term of the
arrangement is for at least one year, and the compensation to be paid
over the term of the arrangement is set in advance, does not exceed
fair market value, and is not determined in a manner that takes into
account the volume or value of any referrals or other business
generated between parties.
(3) For the purposes of this section, "immediate family" includes
the spouse and children of the licensee, the parents of the licensee,
and the spouses of the children of the licensee.
(4) "Licensee" means a physician as defined in Section 3209.3 of
the Labor Code.
(5) "Licensee's office" means either of the following:
(A) An office of a licensee in solo practice.
(B) An office in which services or goods are personally provided
by the licensee or by employees in that office, or personally by
independent contractors in that office, in accordance with other
provisions of law. Employees and independent contractors shall be
licensed or certified when licensure or certification is required by
law.
(6) "Office of a group practice" means an office or offices in
which two or more licensees are legally organized as a partnership,
professional corporation, or not-for-profit corporation, licensed
pursuant to subdivision (a) of Section 1204 of the Health and Safety
Code, for which all of the following apply:
(A) Each licensee who is a member of the group provides
substantially the full range of services that the licensee routinely
provides, including medical care, consultation, diagnosis, or
treatment through the joint use of shared office space, facilities,
equipment, and personnel.
(B) Substantially all of the services of the licensees 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, except in the case of a multispecialty clinic,
as defined in subdivision (l) of Section 1206 of the Health and
Safety Code, physician services are billed in the name of the
multispecialty clinic and amounts so received are treated as receipts
of the multispecialty clinic.
(C) The overhead expenses of, and the income from, the practice
are distributed in accordance with methods previously determined by
members of the group.
(c) It is unlawful for a licensee to enter into an arrangement or
scheme, such as a cross-referral arrangement, that the licensee
knows, or should know, has a principal purpose of ensuring referrals
by the licensee to a particular entity that, if the licensee directly
made referrals to that entity, would be in violation of this
section.
(d) No claim for payment shall be presented by an entity to any
individual, third party payer, or other entity for a good or service
furnished pursuant to a referral prohibited under this section.
(e) No insurer, self-insurer, or other payer shall pay a charge or
lien for any good or service resulting from a referral in violation
of this section.
(f) A licensee who refers a person to, or seeks consultation from,
an organization in which the licensee has a financial interest,
other than as prohibited by subdivision (a), shall disclose the
financial interest to the patient, or the parent or legal guardian of
the patient, in writing, at the time of the referral or request for
consultation.
(1) If a referral, billing, or other solicitation is between one
or more licensees who contract with a multispecialty clinic pursuant
to subdivision (l) of Section 1206 of the Health and Safety Code or
who conduct their practice as members of the same professional
corporation or partnership, and the services are rendered on the same
physical premises, or under the same professional corporation or
partnership name, the requirements of this subdivision may be met by
posting a conspicuous disclosure statement at the registration area
or by providing a patient with a written disclosure statement.
(2) If a licensee is under contract with the Department of
Corrections or the California Youth Authority, and the patient is an
inmate or parolee of either respective department, the requirements
of this subdivision shall be satisfied by disclosing financial
interests to either the Department of Corrections or the California
Youth Authority.
(g) A violation of subdivision (a) shall be a misdemeanor. The
Medical Board of California shall review the facts and circumstances
of any conviction pursuant to subdivision (a) and take appropriate
disciplinary action if the licensee has committed unprofessional
conduct. Violations of this section may also be subject to civil
penalties of up to five thousand dollars ($5,000) for each offense,
which may be enforced by the Insurance Commissioner, Attorney
General, or a district attorney. A violation of subdivision (c), (d),
or (e) is a public offense and is punishable upon conviction by a
fine not exceeding fifteen thousand dollars ($15,000) for each
violation and appropriate disciplinary action, including revocation
of professional licensure, by the Medical Board of California or
other appropriate governmental agency.
(h) This section shall not apply to referrals for services that
are described in and covered by Sections 139.3 and 139.31 of the
Labor Code.
(i) This section shall become operative on January 1, 1995.
650.02. The prohibition of Section 650.01 shall not apply to or
restrict any of the following:
(a) A licensee may refer a patient for a good or service otherwise
prohibited by subdivision (a) of Section 650.01 if the licensee's
regular practice is located where there is no alternative provider of
the service within either 25 miles or 40 minutes traveling time, via
the shortest route on a paved road. If an alternative provider
commences furnishing the good or service for which a patient was
referred pursuant to this subdivision, the licensee shall cease
referrals under this subdivision within six months of the time at
which the licensee knew or should have known that the alternative
provider is furnishing the good or service. A licensee who refers to
or seeks consultation from an organization in which the licensee has
a financial interest under this subdivision shall disclose this
interest to the patient or the patient's parents or legal guardian in
writing at the time of referral.
(b) A licensee, when the licensee or his or her immediate family
has one or more of the following arrangements with another licensee,
a person, or an entity, is not prohibited from referring a patient to
the licensee, person, or entity because of the arrangement:
(1) A loan between a licensee and the recipient of the referral,
if the loan has commercially reasonable terms, bears interest at the
prime rate or a higher rate that does not constitute usury, is
adequately secured, and the loan terms are not affected by either
party's referral of any person or the volume of services provided by
either party.
(2) A lease of space or equipment between a licensee and the
recipient of the referral, if the lease is written, has commercially
reasonable terms, has a fixed periodic rent payment, has a term of
one year or more, and the lease payments are not affected by either
party's referral of any person or the volume of services provided by
either party.
(3) Ownership of corporate investment securities, including
shares, bonds, or other debt instruments that may be purchased on
terms generally available to the public and that are traded on a
licensed securities exchange or NASDAQ, do not base profit
distributions or other transfers of value on the licensee's referral
of persons to the corporation, do not have a separate class or
accounting for any persons or for any licensees who may refer persons
to the corporation, and are in a corporation that had, at the end of
the corporation's most recent fiscal year, or on average during the
previous three fiscal years, stockholder equity exceeding
seventy-five million dollars ($75,000,000).
(4) Ownership of shares in a regulated investment company as
defined in Section 851(a) of the federal Internal Revenue Code, if
the company had, at the end of the company's most recent fiscal year,
or on average during the previous three fiscal years, total assets
exceeding seventy-five million dollars ($75,000,000).
(5) A one-time sale or transfer of a practice or property or other
financial interest between a licensee and the recipient of the
referral if the sale or transfer is for commercially reasonable terms
and the consideration is not affected by either party's referral of
any person or the volume of services provided by either party.
(6) A personal services arrangement between a licensee or an
immediate family member of the licensee and the recipient of the
referral if the arrangement meets all of the following requirements:
(A) It is set out in writing and is signed by the parties.
(B) It specifies all of the services to be provided by the
licensee or an immediate family member of the licensee.
(C) The aggregate services contracted for do not exceed those that
are reasonable and necessary for the legitimate business purposes of
the arrangement.
(D) A person who is referred by a licensee or an immediate family
member of the licensee is informed in writing of the personal
services arrangement that includes information on where a person may
go to file a complaint against the licensee or the immediate family
member of the licensee.
(E) The term of the arrangement is for at least one year.
(F) The compensation to be paid over the term of the arrangement
is set in advance, does not exceed fair market value, and is not
determined in a manner that takes into account the volume or value of
any referrals or other business generated between the parties.
(G) The services to be performed under the arrangement do not
involve the counseling or promotion of a business arrangement or
other activity that violates any state or federal law.
(c) (1) A licensee may refer a person to a health facility, as
defined in Section 1250 of the Health and Safety Code, or to any
facility owned or leased by a health facility, if the recipient of
the referral does not compensate the licensee for the patient
referral, and any equipment lease arrangement between the licensee
and the referral recipient complies with the requirements of
paragraph (2) of subdivision (b).
(2) Nothing shall preclude this subdivision from applying to a
licensee solely because the licensee has an ownership or leasehold
interest in an entire health facility or an entity that owns or
leases an entire health facility.
(3) A licensee may refer a person to a health facility for any
service classified as an emergency under subdivision (a) or (b) of
Section 1317.1 of the Health and Safety Code.
(4) A licensee may refer a person to any organization that owns or
leases a health facility licensed pursuant to subdivision (a), (b),
or (f) of Section 1250 of the Health and Safety Code if the licensee
is not compensated for the patient referral, the licensee does not
receive any payment from the recipient of the referral that is based
or determined on the number or value of any patient referrals, and
any equipment lease arrangement between the licensee and the referral
recipient complies with the requirements of paragraph (2) of
subdivision (b). For purposes of this paragraph, the ownership may be
through stock or membership, and may be represented by a parent
holding company that solely owns or controls both the health facility
organization and the affiliated organization.
(d) A licensee may refer a person to a nonprofit corporation that
provides physician services pursuant to subdivision (l) of Section
1206 of the Health and Safety Code if the nonprofit corporation is
controlled through membership by one or more health facilities or
health facility systems and the amount of compensation or other
transfer of funds from the health facility or nonprofit corporation
to the licensee is fixed annually, except for adjustments caused by
physicians joining or leaving the groups during the year, and is not
based on the number of persons utilizing goods or services specified
in Section 650.01.
(e) A licensee compensated or employed by a university may refer a
person for a physician service, to any facility owned or operated by
the university, or to another licensee employed by the university,
provided that the facility or university does not compensate the
referring licensee for the patient referral. In the case of a
facility that is totally or partially owned by an entity other than
the university, but that is staffed by university physicians, those
physicians may not refer patients to the facility if the facility
compensates the referring physicians for those referrals.
(f) The prohibition of Section 650.01 shall not apply to any
service for a specific patient that is performed within, or goods
that are supplied by, a licensee's office, or the office of a group
practice. Further, the provisions of Section 650.01 shall not alter,
limit, or expand a licensee's ability to deliver, or to direct or
supervise the delivery of, in-office goods or services according to
the laws, rules, and regulations governing his or her scope of
practice.
(g) The prohibition of Section 650.01 shall not apply to cardiac
rehabilitation services provided by a licensee or by a suitably
trained individual under the direct or general supervision of a
licensee, if the services are provided to patients meeting the
criteria for Medicare reimbursement for the services.
(h) The prohibition of Section 650.01 shall not apply if a
licensee is in the office of a group practice and refers a person for
services or goods specified in Section 650.01 to a multispecialty
clinic, as defined in subdivision (l) of Section 1206 of the Health
and Safety Code.
(i) The prohibition of Section 650.01 shall not apply to health
care services provided to an enrollee of a health care service plan
licensed pursuant to the Knox-Keene Health Care Service Plan Act of
1975 (Chapter 2.2 (commencing with Section 1340) of Division 2 of the
Health and Safety Code).
(j) The prohibition of Section 650.01 shall not apply to a request
by a pathologist for clinical diagnostic laboratory tests and
pathological examination services, a request by a radiologist for
diagnostic radiology services, or a request by a radiation oncologist
for radiation therapy if those services are furnished by, or under
the supervision of, the pathologist, radiologist, or radiation
oncologist pursuant to a consultation requested by another physician.
(k) This section shall not apply to referrals for services that
are described in and covered by Sections 139.3 and 139.31 of the
Labor Code.
(l) This section shall become operative on January 1, 1995.
650.1. (a) Any amount payable to any hospital, as defined in
Section 4028, or any person or corporation prohibited from pharmacy
permit ownership by subdivision (a) of Section 4111 under any rental,
lease or service arrangement with respect to the furnishing or
supply of pharmaceutical services and products, which is determined
as a percentage, fraction, or portion of (1) the charges to patients
or of (2) any measure of hospital or pharmacy revenue or cost, for
pharmaceuticals and pharmaceutical services is prohibited.
(b) Any lease or rental arrangement existing on the effective date
of this section shall be in full compliance with subdivision (a) by
January 1, 1986.
(c) Any lease or rental agreement entered into prior to January 1,
1980, that extends beyond the effective date of this section shall
be construed to be in compliance with this section until its
expiration or the expiration of any option which is contained in any
such lease or rental agreement provided that the lease or rental
agreement contains provisions which limit pharmacy charges to the
amounts not in excess of the prevailing charges in similar hospitals
in the general geographic area.
(d) The California State Board of Pharmacy, the Medical Board of
California, and the State Department of Health Services shall enforce
this section and may require information from any person as is
necessary for the enforcement of this section. It shall be the duty
of the licensees of the respective regulatory agencies to produce the
requisite evidence to show compliance with this section. Violations
of this section shall be deemed to be the mutual responsibility of
both lessee and lessor, and shall be grounds for disciplinary action
or other sanctions against both.
650.2. Notwithstanding Section 650 or any other provision of law,
it shall not be unlawful for a person licensed pursuant to Chapter 4
(commencing with Section 1600) of Division 2 or any other person, to
participate in or operate a group advertising and referral service
for dentists if all of the following conditions are met:
(a) The patient referrals by the service result from
patient-initiated responses to service advertising.
(b) The service advertises, if at all, in conformity with Section
651 and subdivisions (i) and (l) of Section 1680.
(c) The service does not employ a solicitor within the meaning of
subdivision (j) of Section 1680.
(d) The service does not impose a fee on the member dentists
dependent upon the number of referrals or amount of professional fees
paid by the patient to the dentist.
(e) Participating dentists charge no more than their usual and
customary fees to any patient referred.
(f) The service registers with the Board of Dental Examiners of
California, providing its name and address.
(g) The service files with the Board of Dental Examiners of
California a copy of the standard form contract that regulates its
relationship with member dentists, which contract shall be
confidential and not open to public inspection.
(h) If more than 50 percent of its referrals are made to one
individual, association, partnership, corporation, or group of three
or more dentists, the service discloses that fact in all public
communications, including, but not limited to, communication by means
of television, radio, motion picture, newspaper, book, or list or
directory of healing arts practitioners.
(i) When member dentists pay any fee to the service, any
advertisement by the service shall clearly and conspicuously disclose
that fact by including a statement as follows: "Paid for by
participating dentists." In print advertisements, the required
statement shall be in at least 9-point type. In radio advertisements,
the required statement shall be articulated so as to be clearly
audible and understandable by the radio audience. In television
advertisements, the required statement shall be either clearly
audible and understandable to the television audience, or displayed
in a written form that remains clearly visible for at least five
seconds to the television audience. This subdivision shall be
operative on and after July 1, 1994.
The Board of Dental Examiners of California may adopt regulations
necessary to enforce and administer this section.
The Board of Dental Examiners may suspend or revoke the
registration of any service that fails to comply with the
requirements of subdivision (i). No service may reregister with the
board if it has a registration that is currently under suspension for
a violation of subdivision (i), nor may a service reregister with
the board if it had a registration revoked by the board for a
violation of subdivision (i) less than one year after that
revocation.
The Board of Dental Examiners of California may petition the
superior court of any county for the issuance of an injunction
restraining any conduct which constitutes a violation of this
section.
It is unlawful and shall constitute a misdemeanor for a person to
operate a group advertising and referral service for dentists without
providing its name and address to the Board of Dental Examiners of
California.
It is the intent of the Legislature in enacting this section not
to otherwise affect the prohibitions provided in Section 650. The
Legislature intends to allow the pooling of resources by dentists for
the purposes of advertising.
This section shall not be construed in any manner which would
authorize a referral service to engage in the practice of dentistry.
650.3. (a) Notwithstanding the provisions of Section 650 or any
other provision of law, it shall not be unlawful for a person
licensed pursuant to the Chiropractic Act, or any other person, to
participate in or operate a group advertising and referral service
for chiropractors if all of the following conditions are met:
(1) Patient referrals by the service are the result of patient
initiated responses to service advertising.
(2) The service advertises, if at all, in conformity with Section
651.
(3) The service does not employ a solicitor.
(4) The service does not impose a fee on the member chiropractors
that is dependent upon the number of referrals or amount of
professional fees paid by the patient to the chiropractor.
(5) Participating chiropractors charge no more than their usual
and customary fees to any patient referred.
(6) The service registers with the State Board of Chiropractic
Examiners, providing its name and address.
(7) The service files with the State Board of Chiropractic
Examiners a copy of the standard form contract that regulates its
relationship with member chiropractors, which contract shall be
confidential and not open to public inspection.
(8) If more than 50 percent of its referrals are made to one
individual, association, partnership, corporation, or group of three
or more chiropractors, the service discloses that fact in all public
communications, including, but not limited to, communication by means
of television, radio, motion picture, newspaper, book, or list or
directory of healing arts practitioners.
(b) The State Board of Chiropractic Examiners may adopt
regulations necessary to enforce and administer this section.
(c) The State Board of Chiropractic Examiners or 10 individual
licensed chiropractors may petition the superior court of any county
for the issuance of an injunction restraining any conduct which
constitutes a violation of this section.
(d) It is unlawful and shall constitute a misdemeanor for a person
to operate a group advertising and referral service for
chiropractors without providing its name and address to the State
Board of Chiropractic Examiners.
(e) It is the intent of the Legislature in enacting this section
not to otherwise affect the prohibitions provided in Section 650. The
Legislature intends to allow the pooling of resources by
chiropractors for the purpose of advertising.
(f) This section shall not be construed in any manner which would
authorize a service to engage in the practice of chiropractic.
650.4. (a) Notwithstanding Section 650, subdivision (o) of Section
4982, or any other provision of law, it shall not be unlawful for a
person licensed pursuant to Chapter 13 (commencing with Section 4980)
or any other person, to participate in or operate a group
advertising and referral service for marriage and family therapists
if all of the following conditions are met:
(1) The patient referrals by the service are the result of
patient-initiated responses to service advertising.
(2) The service advertises, if at all, in conformity with Section
651 and subdivision (p) of Section 4982.
(3) The service does not employ a solicitor to solicit prospective
patients or clients.
(4) The service does not impose a fee on the member marriage and
family therapists that is dependent upon the number of referrals or
amount of professional fees paid by the patient to the marriage and
family therapist.
(5) Participating marriage and family therapists charge no more
than their usual and customary fees to any patient referred.
(6) The service registers with the Board of Behavioral Sciences,
providing its name, street address, and telephone number.
(7) The service files with the Board of Behavioral Sciences a copy
of the standard form contract that regulates its relationship with
member marriage and family therapists, which contract shall be
confidential and not open to public inspection.
(8) If more than 50 percent of its referrals are made to one
individual, association, partnership, corporation, or group of three
or more marriage and family therapists, the service discloses that
fact in all public communications, including, but not limited to,
communications by means of television, radio, motion picture,
newspaper, book, list, or directory of healing arts practitioners.
(9) (A) When member marriage and family therapists pay any fee to
the service, any advertisement by the service shall clearly and
conspicuously disclose that fact by including a statement as follows:
"Paid for by participating marriage and family therapists." In print
advertisements, the required statement shall be in at least 9-point
type. In radio advertisements, the required statement shall be
articulated so as to be clearly audible and understandable by the
radio audience. In television advertisements, the required statement
shall be either clearly audible and understandable to the television
audience, or displayed in a written form that remains clearly visible
to the television audience for at least five seconds.
(B) The Board of Behavioral Sciences may suspend or revoke the
registration of any service that fails to comply with subparagraph
(A). No service may reregister with the board if its registration
currently is under suspension for a violation of subparagraph (A),
nor may a service reregister with the board for a period of one year
after it has had a registration revoked by the board for a violation
of subparagraph (A).
(b) The Board of Behavioral Sciences may adopt regulations
necessary to enforce and administer this section.
(c) The Board of Behavioral Sciences or 10 individual licensed
marriage and family therapists may petition the superior court of any
county for the issuance of an injunction restraining any conduct
that constitutes a violation of this section.
(d) It is unlawful and shall constitute a misdemeanor for a person
to operate a group advertising and referral service for marriage and
family therapists without providing its name, address, and telephone
number to the Board of Behavioral Sciences.
(e) It is the intent of the Legislature in enacting this section
not to otherwise affect the prohibitions of Section 650. The
Legislature intends to allow the pooling of resources by marriage and
family therapists for the purpose of advertising.
(f) This section shall not be construed in any manner that would
authorize a referral service to engage in the practice of marriage
and family therapy.
651. (a) It is unlawful for any person licensed under this division
or under any initiative act referred to in this division to
disseminate or cause to be disseminated any form of public
communication containing a false, fraudulent, misleading, or
deceptive statement, claim, or image for the purpose of or likely to
induce, directly or indirectly, the rendering of professional
services or furnishing of products in connection with the
professional practice or business for which he or she is licensed. A
"public communication" as used in this section includes, but is not
limited to, communication by means of mail, television, radio, motion
picture, newspaper, book, list or directory of healing arts
practitioners, Internet, or other electronic communication.
(b) A false, fraudulent, misleading, or deceptive statement,
claim, or image includes a statement or claim that does any of the
following:
(1) Contains a misrepresentation of fact.
(2) Is likely to mislead or deceive because of a failure to
disclose material facts.
(3) (A) Is intended or is likely to create false or unjustified
expectations of favorable results, including the use of any
photograph or other image that does not accurately depict the results
of the procedure being advertised or that has been altered in any
manner from the image of the actual subject depicted in the
photograph or image.
(B) Use of any photograph or other image of a model without
clearly stating in a prominent location in easily readable type the
fact that the photograph or image is of a model is a violation of
subdivision (a). For purposes of this paragraph, a model is anyone
other than an actual patient, who has undergone the procedure being
advertised, of the licensee who is advertising for his or her
services.
(C) Use of any photograph or other image of an actual patient that
depicts or purports to depict the results of any procedure, or
presents "before" and "after" views of a patient, without specifying
in a prominent location in easily readable type size what procedures
were performed on that patient is a violation of subdivision (a). Any
"before" and "after" views (i) shall be comparable in presentation
so that the results are not distorted by favorable poses, lighting,
or other features of presentation, and (ii) shall contain a statement
that the same "before" and "after" results may not occur for all
patients.
(4) Relates to fees, other than a standard consultation fee or a
range of fees for specific types of services, without fully and
specifically disclosing all variables and other material factors.
(5) Contains other representations or implications that in
reasonable probability will cause an ordinarily prudent person to
misunderstand or be deceived.
(6) Makes a claim either of professional superiority or of
performing services in a superior manner, unless that claim is
relevant to the service being performed and can be substantiated with
objective scientific evidence.
(7) Makes a scientific claim that cannot be substantiated by
reliable, peer reviewed, published scientific studies.
(8) Includes any statement, endorsement, or testimonial that is
likely to mislead or deceive because of a failure to disclose
material facts.
(c) Any price advertisement shall be exact, without the use of
phrases, including, but not limited to, "as low as," "and up,"
"lowest prices," or words or phrases of similar import. Any
advertisement that refers to services, or costs for services, and
that uses words of comparison shall be based on verifiable data
substantiating the comparison. Any person so advertising shall be
prepared to provide information sufficient to establish the accuracy
of that comparison. Price advertising shall not be fraudulent,
deceitful, or misleading, including statements or advertisements of
bait, discount, premiums, gifts, or any statements of a similar
nature. In connection with price advertising, the price for each
product or service shall be clearly identifiable. The price
advertised for products shall include charges for any related
professional services, including dispensing and fitting services,
unless the advertisement specifically and clearly indicates
otherwise.
(d) Any person so licensed shall not compensate or give anything
of value to a representative of the press, radio, television, or
other communication medium in anticipation of, or in return for,
professional publicity unless the fact of compensation is made known
in that publicity.
(e) Any person so licensed may not use any professional card,
professional announcement card, office sign, letterhead, telephone
directory listing, medical list, medical directory listing, or a
similar professional notice or device if it includes a statement or
claim that is false, fraudulent, misleading, or deceptive within the
meaning of subdivision (b).
(f) Any person so licensed who violates this section is guilty of
a misdemeanor. A bona fide mistake of fact shall be a defense to this
subdivision, but only to this subdivision.
(g) Any violation of this section by a person so licensed shall
constitute good cause for revocation or suspension of his or her
license or other disciplinary action.
(h) Advertising by any person so licensed may include the
following:
(1) A statement of the name of the practitioner.
(2) A statement of addresses and telephone numbers of the offices
maintained by the practitioner.
(3) A statement of office hours regularly maintained by the
practitioner.
(4) A statement of languages, other than English, fluently spoken
by the practitioner or a person in the practitioner's office.
(5) (A) A statement that the practitioner is certified by a
private or public board or agency or a statement that the
practitioner limits his or her practice to specific fields.
(i) For the purposes of this section, a dentist licensed under
Chapter 4 (commencing with Section 1600) may not hold himself or
herself out as a specialist, or advertise membership in or specialty
recognition by an accrediting organization, unless the practitioner
has completed a specialty education program approved by the American
Dental Association and the Commission on Dental Accreditation, is
eligible for examination by a national specialty board recognized by
the American Dental Association, or is a diplomate of a national
specialty board recognized by the American Dental Association.
(ii) A dentist licensed under Chapter 4 (commencing with Section
1600) shall not represent to the public or advertise accreditation
either in a specialty area of practice or by a board not meeting the
requirements of clause (i) unless the dentist has attained membership
in or otherwise been credentialed by an accrediting organization
that is recognized by the board as a bona fide organization for that
area of dental practice. In order to be recognized by the board as a
bona fide accrediting organization for a specific area of dental
practice other than a specialty area of dentistry authorized under
clause (i), the organization shall condition membership or
credentialing of its members upon all of the following:
(I) Successful completion of a formal, full-time advanced
education program that is affiliated with or sponsored by a
university based dental school and is beyond the dental degree at a
graduate or postgraduate level.
(II) Prior didactic training and clinical experience in the
specific area of dentistry that is greater than that of other
dentists.
(III) Successful completion of oral and written examinations based
on psychometric principles.
(iii) Notwithstanding the requirements of clauses (i) and (ii), a
dentist who lacks membership in or certification, diplomate status,
other similar credentials, or completed advanced training approved as
bona fide either by an American Dental Association recognized
accrediting organization or by the board, may announce a practice
emphasis in any other area of dental practice only if the dentist
incorporates in capital letters or some other manner clearly
distinguishable from the rest of the announcement, solicitation, or
advertisement that he or she is a general dentist.
(iv) A statement of certification by a practitioner licensed under
Chapter 7 (commencing with Section 3000) shall only include a
statement that he or she is certified or eligible for certification
by a private or public board or parent association recognized by that
practitioner's licensing board.
(B) A physician and surgeon licensed under Chapter 5 (commencing
with Section 2000) by the Medical Board of California may include a
statement that he or she limits his or her practice to specific
fields, but shall not include a statement that he or she is certified
or eligible for certification by a private or public board or parent
association, including, but not limited to, a multidisciplinary
board or association, unless that board or association is (i) an
American Board of Medical Specialties member board, (ii) a board or
association with equivalent requirements approved by that physician
and surgeon's licensing board, or (iii) a board or association with
an Accreditation Council for Graduate Medical Education approved
postgraduate training program that provides complete training in that
specialty or subspecialty. A physician and surgeon licensed under
Chapter 5 (commencing with Section 2000) by the Medical Board of
California who is certified by an organization other than a board or
association referred to in clause (i), (ii), or (iii) shall not use
the term "board certified" in reference to that certification, unless
the physician and surgeon is also licensed under Chapter 4
(commencing with Section 1600) and the use of the term "board
certified" in reference to that certification is in accordance with
subparagraph (A). A physician and surgeon licensed under Chapter 5
(commencing with Section 2000) by the Medical Board of California who
is certified by a board or association referred to in clause (i),
(ii), or (iii) shall not use the term "board certified" unless the
full name of the certifying board is also used and given comparable
prominence with the term "board certified" in the statement.
For purposes of this subparagraph, a "multidisciplinary board or
association" means an educational certifying body that has a
psychometrically valid testing process, as determined by the Medical
Board of California, for certifying medical doctors and other health
care professionals that is based on the applicant's education,
training, and experience.
For purposes of the term "board certified," as used in this
subparagraph, the terms "board" and "association" mean an
organization that is an American Board of Medical Specialties member
board, an organization with equivalent requirements approved by a
physician and surgeon's licensing board, or an organization with an
Accreditation Council for Graduate Medical Education approved
postgraduate training program that provides complete training in a
specialty or subspecialty.
The Medical Board of California shall adopt regulations to
establish and collect a reasonable fee from each board or association
applying for recognition pursuant to this subparagraph. The fee
shall not exceed the cost of administering this subparagraph.
Notwithstanding Section 2 of Chapter 1660 of the Statutes of 1990,
this subparagraph shall become operative July 1, 1993. However, an
administrative agency or accrediting organization may take any action
contemplated by this subparagraph relating to the establishment or
approval of specialist requirements on and after January 1, 1991.
(C) A doctor of podiatric medicine licensed under Chapter 5
(commencing with Section 2000) by the Medical Board of California may
include a statement that he or she is certified or eligible or
qualified for certification by a private or public board or parent
association, including, but not limited to, a multidisciplinary board
or association, if that board or association meets one of the
following requirements: (i) is approved by the Council on Podiatric
Medical Education, (ii) is a board or association with equivalent
requirements approved by the California Board of Podiatric Medicine,
or (iii) is a board or association with the Council on Podiatric
Medical Education approved postgraduate training programs that
provide training in podiatric medicine and podiatric surgery. A
doctor of podiatric medicine licensed under Chapter 5 (commencing
with Section 2000) by the Medical Board of California who is
certified by a board or association referred to in clause (i), (ii),
or (iii) shall not use the term "board certified" unless the full
name of the certifying board is also used and given comparable
prominence with the term "board certified" in the statement. A doctor
of podiatric medicine licensed under Chapter 5 (commencing with
Section 2000) by the Medical Board of California who is certified by
an organization other than a board or association referred to in
clause (i), (ii), or (iii) shall not use the term "board certified"
in reference to that certification.
For purposes of this subparagraph, a "multidisciplinary board or
association" means an educational certifying body that has a
psychometrically valid testing process, as determined by the
California Board of Podiatric Medicine, for certifying doctors of
podiatric medicine that is based on the applicant's education,
training, and experience. For purposes of the term "board certified,"
as used in this subparagraph, the terms "board" and "association"
mean an organization that is a Council on Podiatric Medical Education
approved board, an organization with equivalent requirements
approved by the California Board of Podiatric Medicine, or an
organization with a Council on Podiatric Medical Education approved
postgraduate training program that provides training in podiatric
medicine and podiatric surgery.
The California Board of Podiatric Medicine shall adopt regulations
to establish and collect a reasonable fee from each board or
association applying for recognition pursuant to this subparagraph,
to be deposited in the State Treasury in the Podiatry Fund, pursuant
to Section 2499. The fee shall not exceed the cost of administering
this subparagraph.
(6) A statement that the practitioner provides services under a
specified private or public insurance plan or health care plan.
(7) A statement of names of schools and postgraduate clinical
training programs from which the practitioner has graduated, together
with the degrees received.
(8) A statement of publications authored by the practitioner.
(9) A statement of teaching positions currently or formerly held
by the practitioner, together with pertinent dates.
(10) A statement of his or her affiliations with hospitals or
clinics.
(11) A statement of the charges or fees for services or
commodities offered by the practitioner.
(12) A statement that the practitioner regularly accepts
installment payments of fees.
(13) Otherwise lawful images of a practitioner, his or her
physical facilities, or of a commodity to be advertised.
(14) A statement of the manufacturer, designer, style, make, trade
name, brand name, color, size, or type of commodities advertised.
(15) An advertisement of a registered dispensing optician may
include statements in addition to those specified in paragraphs (1)
to (14), inclusive, provided that any statement shall not violate
subdivision (a), (b), (c), or (e) or any other section of this code.
(16) A statement, or statements, providing public health
information encouraging preventative or corrective care.
(17) Any other item of factual information that is not false,
fraudulent, misleading, or likely to deceive.
(i) Each of the healing arts boards and examining committees
within Division 2 shall adopt appropriate regulations to enforce this
section in accordance with Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code.
Each of the healing arts boards and committees and examining
committees within Division 2 shall, by regulation, define those
efficacious services to be advertised by businesses or professions
under their jurisdiction for the purpose of determining whether
advertisements are false or misleading. Until a definition for that
service has been issued, no advertisement for that service shall be
disseminated. However, if a definition of a service has not been
issued by a board or committee within 120 days of receipt of a
request from a licensee, all those holding the license may advertise
the service. Those boards and committees shall adopt or modify
regulations defining what services may be advertised, the manner in
which defined services may be advertised, and restricting advertising
that would promote the inappropriate or excessive use of health
services or commodities. A board or committee shall not, by
regulation, unreasonably prevent truthful, nondeceptive price or
otherwise lawful forms of advertising of services or commodities, by
either outright prohibition or imposition of onerous disclosure
requirements. However, any member of a board or committee acting in
good faith in the adoption or enforcement of any regulation shall be
deemed to be acting as an agent of the state.
(j) The Attorney General shall commence legal proceedings in the
appropriate forum to enjoin advertisements disseminated or about to
be disseminated in violation of this section and seek other
appropriate relief to enforce this section. Notwithstanding any other
provision of law, the costs of enforcing this section to the
respective licensing boards or committees may be awarded against any
licensee found to be in violation of any provision of this section.
This shall not diminish the power of district attorneys, county
counsels, or city attorneys pursuant to existing law to seek
appropriate relief.
(k) A physician and surgeon or doctor of podiatric medicine
licensed pursuant to Chapter 5 (commencing with Section 2000) by the
Medical Board of California who knowingly and intentionally violates
this section may be cited and assessed an administrative fine not to
exceed ten thousand dollars ($10,000) per event. Section 125.9 shall
govern the issuance of this citation and fine except that the fine
limitations prescribed in paragraph (3) of subdivision (b) of Section
125.9 shall not apply to a fine under this subdivision.
651.3. (a) Any labor organization, bona fide employee group or bona
fide employee association having contracted health care services
from a health care service plan under the Knox-Keene Health Care
Service Plan Act of 1975 (commencing with Section 1340 of the Health
and Safety Code) may inform its members as to the benefits available
and the charges therefor.
(b) Any new or revised written advertising or solicitation, or any
form of evidence of coverage adopted by a health care service plan
under the Knox-Keene Health Care Service Plan Act of 1975 (commencing
with Section 1340 of the Health and Safety Code) for distribution to
members pursuant to subdivision (a) shall comply with the provisions
of the Knox-Keene Health Care Service Plan Act of 1975 and the
regulations thereunder.
(c) Any labor organization, bona fide employee group or bona fide
employee association, contracting for a health care service plan
under this section, shall not derive any profit from such plan.
Nothing contained in this section shall be construed as
authorizing a provider of medical assistance, including a prepaid
health plan, under the Medi-Cal Act or the Waxman-Duffy Prepaid
Health Plan Act to advertise in violation of any of the provisions of
such acts and regulations developed thereto.
652. Violation of this article in the case of a licensed person
constitutes unprofessional conduct and grounds for suspension or
revocation of his or her license by the board by whom he or she is
licensed, or if a license has been issued in connection with a place
of business, then for the suspension or revocation of the place of
business in connection with which the violation occurs. The
proceedings for suspension or revocation shall be conducted in
accordance with Chapter 5 (commencing with Section 11500) of Part 1
of Division 3 of Title 2 of the Government Code, and each board shall
have all the powers granted therein. However, in the case of a
licensee of the State Department of Health Services, the proceedings
shall be conducted in accordance with Section 110171 of the Health
and Safety Code. In addition, any violation constitutes a misdemeanor
as to any and all persons offering, delivering, receiving,
accepting, or participating in any rebate, refund, commission,
preference, patronage dividend, unearned discount, or consideration,
whether or not licensed under this division, and is punishable by
imprisonment in the county jail not exceeding six months, by a fine
not exceeding two thousand five hundred dollars ($2,500), or by both
the imprisonment and fine.
652.5. Except as otherwise provided in this article, any violation
of this article constitutes a misdemeanor as to any and all persons,
whether or not licensed under this division, and is punishable by
imprisonment in the county jail not exceeding six months, or by a
fine not exceeding two thousand five hundred dollars ($2,500), or by
both the imprisonment and fine.
653. The word "person" as used in this article includes an
individual, firm, partnership, association, corporation, limited
liability company, or cooperative association.
654. No person licensed under Chapter 5 (commencing with Section
2000) of this division may have any membership, proprietary interest
or coownership in any form in or with any person licensed under
Chapter 5.5 (commencing with Section 2550) of this division to whom
patients, clients or customers are referred or any profit-sharing
arrangements.
654.1. Persons licensed under Chapter 4 (commencing with Section
1600) of this division or licensed under Chapter 5 (commencing with
Section 2000) of this division or licensed under any initiative act
referred to in this division relating to osteopaths may not refer
patients, clients, or customers to any clinical laboratory licensed
under Section 1265 in which the licensee has any membership,
proprietary interest, or coownership in any form, or has any
profit-sharing arrangement, unless the licensee at the time of making
such referral discloses in writing such interest to the patient,
client, or customer. The written disclosure shall indicate that the
patient may choose any clinical laboratory for purposes of having any
laboratory work or assignment performed.
This section shall not apply to persons who are members of a
medical group which contracts to provide medical care to members of a
group practice prepayment plan registered under the Knox-Keene
Health Care Service Act of 1975, Chapter 2.2 (commencing with Section
1340) of Division 2 of the Health and Safety Code.
This section shall not apply to any referral to a clinical
laboratory which is owned and operated by a health facility licensed
pursuant to Chapter 2 (commencing with Section 1250) of Division 2 of
the Health and Safety Code.
This section does not prohibit the acceptance of evaluation
specimens for proficiency testing or referral of specimens or such
assignment from one clinical laboratory to another clinical
laboratory, either licensed or exempt under this chapter, providing
the report indicates clearly the laboratory performing the test.
"Proprietary interest" does not include ownership of a building
where space is leased to a clinical laboratory at the prevailing rate
under a straight lease arrangement.
A violation of this section is a public offense and is punishable
upon a first conviction by imprisonment in the county jail for not
more than one year, or by imprisonment in the state prison, or by a
fine not exceeding ten thousand dollars ($10,000), or by both such
imprisonment and fine. A second or subsequent conviction shall be
punishable by imprisonment in the state prison.
654.2. (a) It is unlawful for any person licensed under this
division or under any initiative act referred to in this division to
charge, bill, or otherwise solicit payment from a patient on behalf
of, or refer a patient to, an organization in which the licensee, or
the licensee's immediate family, has a significant beneficial
interest, unless the licensee first discloses in writing to the
patient, that there is such an interest and advises the patient that
the patient may choose any organization for the purpose of obtaining
the services ordered or requested by the licensee.
(b) The disclosure requirements of subdivision (a) may be met by
posting a conspicuous sign in an area which is likely to be seen by
all patients who use the facility or by providing those patients with
a written disclosure statement. Where referrals, billings, or other
solicitations are between licensees who contract with multispecialty
clinics pursuant to subdivision (l) of Section 1206 of the Health and
Safety Code or who conduct their practice as members of the same
professional corporation or partnership, and the services are
rendered on the same physical premises, or under the same
professional corporation or partnership name, the requirements of
subdivision (a) may be met by posting a conspicuous disclosure
statement at a single location which is a common area or registration
area or by providing those patients with a written disclosure
statement.
(c) On and after July 1, 1987, persons licensed under this
division or under any initiative act referred to in this division
shall disclose in writing to any third-party payer for the patient,
when requested by the payer, organizations in which the licensee, or
any member of the licensee's immediate family, has a significant
beneficial interest and to which patients are referred. The
third-party payer shall not request this information from the
provider more than once a year.
Nothing in this section shall be construed to serve as the sole
basis for the denial or delay of payment of claims by third party
payers.
(d) For the purposes of this section, the following terms have the
following meanings:
(1) "Immediate family" includes the spouse and children of the
licensee, the parents of the licensee and licensee's spouse, and the
spouses of the children of the licensee.
(2) "Significant beneficial interest" means any financial interest
that is equal to or greater than the lesser of the following:
(A) Five percent of the whole.
(B) Five thousand dollars ($5,000).
(3) A third-party payer includes any health care service plan,
self-insured employee welfare benefit plan, disability insurer,
nonprofit hospital service plan, or private group or indemnification
insurance program.
A third party payer does not include a prepaid capitated plan
licensed under the Knox-Keene Health Care Service Plan Act of 1975 or
Chapter 11a (commencing with Section 11491) of Part 2 of Division 2
of the Insurance Code.
(e) This section shall not apply to a "significant beneficial
interest" which is limited to ownership of a building where the space
is leased to the organization at the prevailing rate under a
straight lease agreement or to any interest held in publicly traded
stocks.
(f) (1) This section does not prohibit the acceptance of
evaluation specimens for proficiency testing or referral of specimens
or assignment from one clinical laboratory to another clinical
laboratory, either licensed or exempt under this chapter, if the
report indicates clearly the name of the laboratory performing the
test.
(2) This section shall not apply to relationships governed by
other provisions of this article nor is this section to be construed
as permitting relationships or interests that are prohibited by
existing law on the effective date of this section.
(3) The disclosure requirements of this section shall not be
required to be given to any patient, customer, or his or her
representative, if the licensee, organization, or entity is providing
or arranging for health care services pursuant to a prepaid
capitated contract with the State Department of Health Services.
654.3. (a) A dentist, or an employee or agent of a dentist, shall
not charge treatment or costs to an open-end credit, that is extended
by a third party and that is arranged for or established in a dental
office, before the date upon which the treatment is rendered or
costs are incurred, without first providing the patient a list of the
treatment and services to be rendered, the estimated costs of the
treatment and services, and which treatment and services are being
charged in advance of rendering or incurring of costs, and ensuring
that the patient has received the treatment plan required by
subdivision (d).
(b) A dentist shall, within 15 business days of a patient's
request, refund to the lender any payment received through credit
extended by a third party that is arranged for or established in a
dental office for treatment that has not been rendered or costs that
have not been incurred.
(c) A dentist, or an employee or agent of that dentist, shall not
arrange for or establish credit extended by a third party for a
patient without first providing the following written notice, on one
page in at least 14-point type, and obtaining a signature from the
patient:
"Credit for Dental Services
The attached application and information is for a credit card/line
of credit or loan to help you finance your dental treatment. You
should know that:
You are applying for a ____ credit card/line of credit or a ____
loan for $____.
You do not have to apply for the credit card/line of credit or
loan. You may pay your dentist for dental treatment in another
manner.
This credit card/line of credit or loan is not a payment plan with
the dental office; it is credit with