Legal Issues with Physician Office Laboratories

Dinsmore associate Courtney White co-authored an article for the American Health Law Association which provides a description of the many issues a physician practice faces when starting or operating a physician office laboratory. An excerpt is below.

One of the most common goals of legislation in the health care sector is the insulation of a medical professional’s clinical judgment against improper influences. States have recognized the importance of preserving clinical judgment and have implemented “fee-splitting” prohibitions that limit or prohibit medical professionals from sharing or dividing fees generated from the provision of medical services. These state fee-splitting prohibitions vary widely in the types of activity they prohibit and the extent to which they are enforced.45 Nevertheless, state-imposed restrictions on sharing professional fees can have a significant impact on POLs.

Fee-splitting prohibitions are most often established through state legislation. Under these statutorily imposed prohibitions, participation in fee-splitting arrangements typically constitutes professional misconduct under the state’s professional practice acts and may result in an enforcement action against the professional’s license.46 While many states have broad prohibitions applicable to any fee-splitting arrangements, some take a more narrow approach by applying fee-splitting prohibitions only to referrals made for services susceptible to abuse, such as referrals for tests at clinical laboratories.

Read the full article here.