South Carolina Code 44-113-30. Health care provider not to refer patient to entity in which it has investment interest; exceptions; violations; penalties
(1) an investment interest where the health care professional directly provides the health care services within the entity or will be personally involved in the provision, supervision, or direction of care to the referred patient.
Terms Used In South Carolina Code 44-113-30
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Board: means any of the boards created pursuant to Title 40, as amended, to license, certify, or register health care professionals. See South Carolina Code 44-113-20
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Department: means the South Carolina Department of Health and Environmental Control. See South Carolina Code 44-113-20
- Designated health services: means any health care procedure, service, or item provided by a health care provider. See South Carolina Code 44-113-20
- Entity: means an individual, partnership, firm, corporation, or other business entity. See South Carolina Code 44-113-20
- health care professional: means a person licensed, certified, or registered under the laws of this State to provide health care services. See South Carolina Code 44-113-20
- Investment interest: means an equity or debt security issued by an entity including, except as provided below, but not limited to, shares of stock in a corporation, units or other interests in a partnership, bonds, debentures, notes, other equity interests, or debt instruments. See South Carolina Code 44-113-20
- Investor: means a person or entity owning a legal or beneficial ownership or investment interest, directly or indirectly including, but not limited to, through an immediate family member, trust, or corporation, the stock of which is owned in whole or in part by the investor or another entity related to the investor. See South Carolina Code 44-113-20
- Referral: means a referral of a patient by a health care provider for health care services including, but not limited to:
(a) the forwarding of a patient by a health care provider to another health care provider or to an entity outside the health care professional's office or group practice which provides or supplies designated health services or any other health care item or service; or
(b) the request or establishment of a plan of care by a health care provider, which includes the provision of a designated health service or any other health care item or service outside the health care professional's office or group practice. See South Carolina Code 44-113-20
(2) the provider’s investment interest is in registered securities purchased on a national exchange or over-the-counter market and issued by a publicly-held corporation:
(a) whose shares are traded on a national exchange or on the over-the-counter market; and
(b) whose total assets at the end of the corporation’s most recent fiscal quarter exceeded fifty million dollars; or
(3) with respect to an entity other than a publicly-held corporation described in subsection (A)(2) and a referring provider’s investment interest in the entity, each of the following requirements are met:
(a) no more than fifty percent of the value of the investment interests are held by investors who are in a position to make referrals to the entity;
(b) the terms under which an investment interest is offered to an investor who is in a position to make referrals to the entity are no different from the terms offered to investors who are not in a position to make referrals;
(c) the terms under which an investment interest is offered to an investor who is in a position to make referrals to the entity are not related to the previous or expected volume of referrals from that investor to the entity;
(d) there is no requirement that an investor make referrals or be in a position to make referrals to the entity as a condition for becoming or remaining an investor.
(B) With respect to an entity or to a publicly-held corporation in subsection (A)(2):
(1) the entity or corporation does not lend funds to or guarantee a loan for an investor who is in a position to make referrals to the entity or corporation if the investor uses any part of the loan to obtain the investment interest;
(2) the amount distributed to an investor representing a return on the investment interest is directly proportional to the amount of the capital investment, including the fair market value of preoperational services rendered in the entity or corporation by that investor.
(C) No claim for payment may be presented by an entity to an individual, third party payor, or other entity for a service furnished pursuant to a referral prohibited under this section.
(D) If an entity collects any amount that was billed in violation of this section, the entity shall refund the amount on a timely basis to the payor or individual, whichever is applicable.
(E) A health care provider who makes a referral prohibited by this section or who fails to disclose information required by § 44-113-40(A) or presents or causes to be presented a bill or a claim for services that the health care provider knows or should know is for a service for which payment may not be made under subsection (C) or for which a refund has not been made under subsection (D) is subject to a civil penalty of not more than five thousand dollars for each such service to be imposed and collected by the appropriate board.
(F) A health care provider or other entity that enters into an arrangement or scheme which the health care provider or entity knows or should know has a principal purpose of assuring referrals by the health care provider to a particular entity which, if the health care provider directly made referrals to the entity would be in violation of this section, is subject to a civil penalty of not more than twenty-five thousand dollars for each circumvention arrangement or scheme to be imposed and collected by the appropriate board.
(G) A violation of this section by a health care provider constitutes grounds for disciplinary action to be taken by the applicable board. A hospital licensed under Title 44, Chapter 7 found in violation of this section is subject to the regulations promulgated by the department.
(H) A hospital licensed under Title 44, Chapter 7 that discriminates against or otherwise penalizes a health care provider for compliance with this chapter is subject to a civil penalty of not more than one hundred thousand dollars to be imposed and collected by the department.
(I) Each board, and in the case of hospitals, the department, shall encourage the use by licensees of an advisory opinion procedure to determine the applicability of this section or any regulation promulgated pursuant to this section as it applies solely to the licensee.