Cal. HSC § 1323 — California Code / Code hsc / Division 2 / Chapter 2 / Article 7 / Section 1323
Section 1323
Status: in_force

(a)  A health facility, as defined by subdivisions (c) to (g), inclusive, of Section 1250, which has a significant beneficial interest in an ancillary health service provider or which knows that an ancillary health service provider has a significant beneficial interest in the health facility shall disclose that interest in writing to the patients of the health facility, or their representatives, and advise the patients, or their representatives, that they may choose to have another ancillary health service provider provide any supplies or services ordered by a member of the medical staff of the health facility.

(b)  If supplies or services are provided on an outpatient basis by an ancillary health service provider which is not on the same site as, or which is not on a site which is adjacent to, a health facility, as defined by subdivision (a) or (b) of Section 1250, which has a significant beneficial interest in the ancillary health service provider, or if the ancillary health service provider has a significant beneficial interest in the health facility, the ancillary health service provider shall disclose that interest in writing to the customers of the ancillary health service provider, or their representatives, and advise the customers, or their representatives, that they may choose to have another ancillary health service provider provide any supplies or services ordered by a member of the medical staff of the health facility.

(c)  A health facility, as defined by Section 1250, shall not charge, bill, or otherwise solicit payment from a patient on behalf of, or refer a patient to, another health facility in which the health facility has a significant beneficial interest unless the health facility first discloses in writing to the patient, or his or her representative, that the patient may choose to have another health facility provide any supplies or services ordered by a member of the medical staff of the health facility.

(d)  (1)  Except as provided in paragraph (2), “significant beneficial interest” means any financial interest that is equal to or greater than the lesser of the following:

(A)  Five percent of the whole.

(B)  Five thousand dollars ($5,000).

(2)  “Significant beneficial interest” does not include any of the following interests:

(A)  A lease agreement between a health facility, ancillary health service provider, another health facility, or a parent corporation of the health facility, or any combination thereof.

(B)  Any financial interest held by a health facility or ancillary health service provider in the stock of a publicly held health facility or ancillary health service provider, or any parent corporation of a health facility or ancillary health service provider, if that financial interest does not exceed 5 percent of any class of equity securities of the health facility, ancillary health service provider, or parent corporation.

(C)  An ownership interest in a health facility or ancillary health service provider if more than three-fourths of the patients of the health facility or ancillary health service provider are members of a prepaid group practice health care service plan, as defined by Section 1345.

(e)  (1)  “Ancillary health service provider” includes, but is not limited to, providers of pharmaceutical, laboratory, optometry, prosthetic, or orthopedic supplies or services, suppliers of durable medical equipment, home-health service providers, and providers of mental health or substance abuse services.

(2)  As used in subdivision (b), “adjacent” means real property located within a 400-yard radius of the boundaries of the site on which the health facility is located.

(f)  Neither a health facility nor an ancillary health service provider is required to make any disclosures required by this section to any patients or customers, or their representatives, if the patients or customers are enrolled in organizations or entities which provide or arrange for the provision of health care services in exchange for a prepaid capitation payment or premium.