PART 3 OF 4: The Compliance Layer of Combining Specialties

Referrals, self-referral rules, and the exposure created within one group.

Combining specialties creates a compliance dimension that single-specialty practices rarely confront. When specialties that refer to one another share a practice, the referral relationships themselves come under regulatory scrutiny. This part addresses the fraud-and-abuse and self-referral considerations that multi-specialty structuring raises.

Why internal referrals draw scrutiny

A multi-specialty practice often generates referrals from one specialty to another within the same group, and where those referrals carry financial value, they implicate laws designed to prevent referrals driven by financial gain rather than patient need. The very integration that makes multi-specialty care attractive is also what brings these rules into play.

The self-referral and anti-kickback framework

Several bodies of law bear on internal referrals and financial relationships in a multi-specialty group:

• Federal self-referral law restricts referrals for certain services where a financial relationship exists, subject to exceptions.
• The federal Anti-Kickback Statute addresses remuneration intended to induce referrals.
• California has its own self-referral and fee-splitting restrictions that apply alongside the federal rules.

The role of statutory exceptions

These laws include exceptions that are important to multi-specialty practices, including provisions designed to accommodate legitimate group practices and in-office ancillary services. Fitting within an applicable exception is often what allows a multi-specialty group to operate its internal referrals lawfully. The exceptions are detailed and must be satisfied in substance, not merely invoked.

Compensation structures under scrutiny

How a multi-specialty group compensates its providers can itself raise compliance questions, particularly where compensation is tied to referrals or to the volume or value of services one specialty directs to another. Designing compensation that rewards productivity and quality without running afoul of these rules is a central compliance task for a multi-specialty practice.

Building compliance into the structure

Because the compliance exposure arises from the structure itself, it must be addressed when the practice is designed, not bolted on afterward. A multi-specialty practice built with the referral and compensation rules in mind can operate its integrated model confidently; one that ignores them may find its core operations exposed.

How West Coast Health Law Can Help

We help multi-specialty groups structure internal referrals and compensation to fit within applicable exceptions and comply with federal and California self-referral and anti-kickback rules.

West Coast Health Law offers a FREE consultation which you may schedule by clicking the button on our website.

This article is provided for general informational purposes only and does not constitute legal advice or create an attorney-client relationship. Laws change and every practice is different; consult a qualified attorney about your specific circumstances.