Business contracts

I have a Healthcare (anti-stark and anti-kick back) legal opinion in other states any specific items in CA to look out for?

This is for specialized MRI instrumentation that will be placed and managed in Physician Practices. We are expanding into California and would like to get a legal opinion confirming that the arrangement is legal in California. The arrangement is legal and backed by legal opinion in five other states. How much should I reasonably expect to pay. I have the drafts of other legal opinions.

Nathan’s Answer

The federal Anti-Kickback Statute (AKS) provides "a person need not have actual knowledge of this section or specific intent to commit a violation of this section." As a result, either you or counsel relying on jurisdiction specific opinions from other states won't be sufficient as California is 1 of 37 states that has its own broader guidelines. In California, the anti-kickback state law applies to individuals AND entities. Even simple contractual discounts based on volume can trigger liability, and bad publicity even if there is no violation. Violations of federal or state versions of this law can be treated as criminal acts with prison/jail time.

As for the Stark law (incidentally sponsored primarily by US Representative Fortney Stark (D-CA)) the prohibition on referrals by designated health services (DHS) is quite thorough. Add to that California's Physician Ownership and Referral Act (PORA) and various applicable Business & Professions, Health & Safety, Welfare and Institutions, and Corporations codes, with a slew of California Attorney General advisory opinions, and what was once an economically ripe situation can easily become a potentially violating fee-splitting, kickback or referral arrangement.

Due to increasing enforcement efforts by state and federal entities, it would be prudent to obtain counsel's opinion letter anew. You may have counsel review the other advisory opinions to see if some information can be rehashed for a discount, if applicable. However, California is in its own league in many respects related to the above.

Please follow & like us 🙂

Posted in Uncategorized.

Leave a Reply

Your email address will not be published.