HOUSE BILL No. 5269 October 14, 1997, Introduced by Reps. Gire, Llewellyn, Hammerstrom, McBryde, Scranton, McNutt, Richner, Godchaux, Griffin, Hanley, Geiger, Raczkowski, Oxender, Middleton, Schauer and Perricone and referred to the Committee on Health Policy. A bill to amend 1978 PA 368, entitled "Public health code," by amending section 16221 (MCL 333.16221), as amended by 1996 PA 273, and by adding section 16225. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 16221. The department may investigate activities 2 related to the practice of a health profession by a licensee, a 3 registrant, or an applicant for licensure or registration. The 4 department may hold hearings, administer oaths, and order rele- 5 vant testimony to be taken and shall report its findings to the 6 appropriate disciplinary subcommittee. The disciplinary subcom- 7 mittee shall proceed under section 16226 if it finds that 1 or 8 more of the following grounds exist: 9 (a) A violation of general duty, consisting of negligence or 10 failure to exercise due care, including negligent delegation to 00191'97 * CPD 2 1 or supervision of employees or other individuals, whether or not 2 injury results, or any conduct, practice, or condition which 3 impairs, or may impair, the ability to safely and skillfully 4 practice the health profession. 5 (b) Personal disqualifications, consisting of 1 or more of 6 the following: 7 (i) Incompetence. 8 (ii) Subject to sections 16165 to 16170a, substance abuse as 9 defined in section 6107. 10 (iii) Mental or physical inability reasonably related to and 11 adversely affecting the licensee's ability to practice in a safe 12 and competent manner. 13 (iv) Declaration of mental incompetence by a court of compe- 14 tent jurisdiction. 15 (v) Conviction of a misdemeanor punishable by imprisonment 16 for a maximum term of 2 years; a misdemeanor involving the ille- 17 gal delivery, possession, or use of a controlled substance; or a 18 felony. A certified copy of the court record is conclusive evi- 19 dence of the conviction. 20 (vi) Lack of good moral character. 21 (vii) Conviction of a criminal offense under sections 520a 22 to 520l of the Michigan penal code,Act No. 328 of the Public23Acts of 1931, being sections 750.520a to 750.520l of the Michigan24Compiled Laws1931 PA 328, MCL 750.520A TO 750.520l. A certi- 25 fied copy of the court record is conclusive evidence of the 26 conviction. 00191'97 * 3 1 (viii) Conviction of a violation of section 492a of the 2 Michigan penal code,Act No. 328 of the Public Acts of 1931,3being section 750.492a of the Michigan Compiled Laws1931 PA 4 328, MCL 750.492A. A certified copy of the court record is con- 5 clusive evidence of the conviction. 6 (ix) Conviction of a misdemeanor or felony involving fraud 7 in obtaining or attempting to obtain fees related to the practice 8 of a health profession. A certified copy of the court record is 9 conclusive evidence of the conviction. 10 (x) Final adverse administrative action by a licensure, reg- 11 istration, disciplinary, or certification board involving the 12 holder of, or an applicant for, a license or registration regu- 13 lated by another state or a territory of the United States. A 14 certified copy of the record of the board is conclusive evidence 15 of the final action. 16 (xi) Conviction of a misdemeanor that is reasonably related 17 to or that adversely affects the licensee's ability to practice 18 in a safe and competent manner. A certified copy of the court 19 record is conclusive evidence of the conviction. 20 (c) Prohibited acts, consisting of 1 or more of the 21 following: 22 (i) Fraud or deceit in obtaining or renewing a license or 23 registration. 24 (ii) Permitting the license or registration to be used by an 25 unauthorized person. 26 (iii) Practice outside the scope of a license. 00191'97 * 4 1 (iv) Obtaining, possessing, or attempting to obtain or 2 possess a controlled substance as defined in section 7104 or a 3 drug as defined in section 7105 without lawful authority; or 4 selling, prescribing, giving away, or administering drugs for 5 other than lawful diagnostic or therapeutic purposes. 6 (d) Unethical business practices, consisting of 1 or more of 7 the following: 8 (i) False or misleading advertising. 9 (ii) Dividing fees for referral of patients or accepting 10 kickbacks on medical or surgical services, appliances, or medica- 11 tions purchased by or in behalf of patients. 12 (iii) Fraud or deceit in obtaining or attempting to obtain 13 third party reimbursement. 14 (e) Unprofessional conduct, consisting of 1 or more of the 15 following: 16 (i) Misrepresentation to a consumer or patient or in obtain- 17 ing or attempting to obtain third party reimbursement in the 18 course of professional practice. 19 (ii) Betrayal of a professional confidence. 20 (iii) Promotion for personal gain of an unnecessary drug, 21 device, treatment, procedure, or service. 22 (iv)DirectingEXCEPT AS OTHERWISE PROVIDED IN SECTION 23 16225, DIRECTING or requiring an individual to purchase or secure 24 a drug,OR device,OR REFERRING AN INDIVIDUAL FOR A treat- 25 ment, procedure, or servicefromPROVIDED BY another person, 26 place, facility, or business in which the licensee OR REGISTRANT 27 has a financial interest. 00191'97 * 5 1 (f) Failure to report a change of name or mailing address 2 within 30 days after the change occurs. 3 (g) A violation, or aiding or abetting in a violation, of 4 this article or of rules promulgated under this article. 5 (h) Failure to comply with a subpoena issued pursuant to 6 this part, failure to respond to a complaint issued under this 7 article or article 7, failure to appear at a compliance confer- 8 ence or an administrative hearing, or failure to report under 9 section 16222 or 16223. 10 (i) Failure to pay an installment of an assessment levied 11 pursuant to section 2504 of the insurance code of 1956,Act12No. 218 of the Public Acts of 1956, being section 500.2504 of the13Michigan Compiled Laws1956 PA 218, MCL 500.2504, within 60 days 14 after notice by the appropriate board. 15 (j) A violation of section 17013 or 17513. 16 (k) Failure to meet 1 or more of the requirements for licen- 17 sure or registration under section 16174. 18 (l) A violation of section 17015 or 17515. 19 (m) A violation of section 17016 or 17516. 20 SEC. 16225. (1) A LICENSEE OR REGISTRANT MAY REFER A 21 PATIENT TO ANOTHER PERSON, PLACE, FACILITY, OR BUSINESS IN WHICH 22 THE LICENSEE OR REGISTRANT HAS A FINANCIAL INTEREST FOR A TREAT- 23 MENT, PROCEDURE, OR SERVICE UNDER 1 OR MORE OF THE FOLLOWING 24 CIRCUMSTANCES: 25 (A) IF THE LICENSEE OR REGISTRANT REFERS THE PATIENT TO A 26 PLACE, FACILITY, OR BUSINESS, THE LICENSEE OR REGISTRANT DIRECTLY 00191'97 * 6 1 PROVIDES THE TREATMENT, PROCEDURE, OR SERVICE FOR THE PATIENT AT 2 THE PLACE, FACILITY, OR BUSINESS. 3 (B) IF ALL OF THE FOLLOWING REQUIREMENTS ARE MET: 4 (i) THE LICENSEE OR REGISTRANT DISCLOSES HIS OR HER FINAN- 5 CIAL INTEREST TO THE PATIENT AT THE TIME THE REFERRAL IS MADE. 6 (ii) THE LICENSEE OR REGISTRANT PROVIDES THE PATIENT WITH A 7 LIST OF AVAILABLE ALTERNATIVE PLACES, FACILITIES, OR BUSINESSES 8 WHERE THE SAME OR A SUBSTANTIALLY SIMILAR TREATMENT, PROCEDURE, 9 OR SERVICE CAN BE OBTAINED BEFORE OR AT THE TIME OF MAKING THE 10 REFERRAL. 11 (iii) THE LICENSEE OR REGISTRANT INFORMS THE PATIENT THAT 12 THE PATIENT HAS THE CHOICE OF OBTAINING THE TREATMENT, PROCEDURE, 13 OR SERVICE FOR WHICH HE OR SHE WAS REFERRED ELSEWHERE AND ASSURES 14 THE PATIENT THAT HE OR SHE WILL NOT BE TREATED DIFFERENTLY BY THE 15 LICENSEE OR REGISTRANT IF THE PATIENT DOES NOT CHOOSE THE PLACE, 16 FACILITY, OR BUSINESS IN WHICH THE LICENSEE OR REGISTRANT HAS A 17 FINANCIAL INTEREST. 18 (iv) INVESTMENT IN THE PLACE, FACILITY, OR BUSINESS IS OPEN 19 TO INDIVIDUALS OTHER THAN REFERRING LICENSEES OR REGISTRANTS. 20 (v) THE OPPORTUNITY TO INVEST AND THE TERMS OF INVESTMENT 21 ARE NOT RELATED TO THE VOLUME OF REFERRALS OR OTHER BUSINESS GEN- 22 ERATED BY THE LICENSEE OR REGISTRANT INVESTOR. 23 (vi) THERE IS NOT A REQUIREMENT THAT A LICENSEE OR REGIS- 24 TRANT INVESTOR MAKE REFERRALS TO THE PLACE, FACILITY, OR BUSINESS 25 OR OTHERWISE GENERATE BUSINESS AS CONDITION OF MAINTAINING HIS OR 26 HER FINANCIAL INTEREST. 00191'97 * 7 1 (vii) THE RETURN ON THE LICENSEE'S INVESTMENT IS TIED TO THE 2 LICENSEE'S OR REGISTRANT'S EQUITY IN THE PLACE, FACILITY, OR 3 BUSINESS RATHER THAN THE VOLUME OF REFERRALS. 4 (viii) THE PLACE, FACILITY, OR BUSINESS DOES NOT LOAN MONEY 5 TO OR GUARANTEE A LOAN FOR A LICENSEE OR REGISTRANT INVESTOR WHO 6 IS ABLE TO REFER PATIENTS TO THE PLACE, FACILITY, OR BUSINESS. 7 (ix) THE INVESTMENT CONTRACT DOES NOT PROHIBIT THE LICENSEE 8 OR REGISTRANT INVESTOR FROM INVESTING IN OTHER PLACES, FACILI- 9 TIES, OR BUSINESSES. 10 (x) THE LICENSEE'S OR REGISTRANT'S FINANCIAL INTEREST IS 11 DISCLOSED TO THIRD PARTY PAYERS UPON REQUEST. 12 (xi) THE PLACE, FACILITY, OR BUSINESS ESTABLISHES AND IMPLE- 13 MENTS AN INTERNAL UTILIZATION REVIEW PROGRAM TO ENSURE THAT 14 LICENSEE OR REGISTRANT INVESTORS DO NOT EXPLOIT THEIR PATIENTS IN 15 ANY WAY INCLUDING, BUT NOT LIMITED TO, INAPPROPRIATE OR UNNECES- 16 SARY UTILIZATION. 17 (xii) EACH REFERRAL OF A PATIENT BY THE LICENSEE OR REGIS- 18 TRANT TO THE PLACE, FACILITY, OR BUSINESS IS IN THE BEST INTER- 19 ESTS OF THE PATIENT. 20 (2) AS USED IN SUBSECTION (1), "FINANCIAL INTEREST" DOES NOT 21 INCLUDE EITHER OF THE FOLLOWING: 22 (A) OWNERSHIP OF SECURITIES ISSUED BY A CORPORATION, THE 23 SHARES OF WHICH ARE TRADED ON A NATIONAL EXCHANGE OR THE 24 OVER-THE-COUNTER MARKET. 25 (B) AN EMPLOYMENT CONTRACT WITH A UNIVERSITY, HOSPITAL, OR 26 OTHER HEALTH FACILITY OR AGENCY LICENSED UNDER ARTICLE 17, IF THE 00191'97 * 8 1 EMPLOYMENT CONTRACT DOES NOT PROVIDE FOR COMPENSATION BASED UPON 2 THE VOLUME OF PATIENT REFERRALS. 00191'97 * Final page. 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