CMA defeats bill that would have eliminated in-office exception to self-referral law

The California Medical Association (CMA) successfully quashed a bill (SB 1215, Hernandez) that would have eliminated the in-office exception to the self-referral law for advanced imaging, anatomic pathology, radiation therapy and physical therapy. The bill died in Senate Health Committee after receiving just one vote (from the bill’s author). This bill would have been a major blow to the integrated care model, resulting in increased costs as these services would of been driven toward the more expensive hospital setting and inhibit the development of practices that integrate and coordinate care. In general, physicians are prohibited from referring a patient to another medical professional or facility if the physician or physician’s family has a financial interest or receives a referral fee. However, there is an “in-office” exception to this general prohibition that allows referrals to another medical professional that is located within the office of the physician or physician’s group practice. This exception allows for greater integrated care and better health comes, as medical resources concentrated at a single facility increases efficiency and allows the physician to supervise the patient throughout all stages of the treatment process.