Part 34 - Health Care Practitioner Referrals and Laboratory Business Practices

Effective Date: 
Wednesday, November 22, 2017
Doc Status: 
Complete
Statutory Authority: 
Public Health Law, Sections 238-a(10), 238-a(2)(g), 586(3) and 587(6)

SubPart 34-1 - Health Care Practitioner Referrals

Effective Date: 
Wednesday, December 26, 2001
Doc Status: 
Complete
Statutory Authority: 
Public Health Law, Sections 238-a(2)(g) and 238-a(10)

Section 34-1.1 - Title

34-1.1 Title.

This Subpart shall be known and cited as the "Health Care Practitioner Referrals."

Effective Date: 
Wednesday, December 26, 2001
Doc Status: 
Complete

Section 34-1.2 - Definitions

34-1.2 Definitions. Whenever used in this Subpart, unless the context of this Subpart clearly requires otherwise, the following terms shall have the following meanings:

(a) "Clinical laboratory services" shall mean the microbiological, immunological, chemical, hematological, biophysical, cytological, pathological, genetic or other examination of materials derived from the human body, for the purposes of obtaining information for the diagnosis, prevention, or treatment of disease, or the assessment of a health condition.

(b) "Fair market value" shall mean the value in arms length transactions, consistent with the general market value, and, with respect to rentals or leases, the value of rental property for general commercial purposes, not taking into account its intended use, and, in the case of a lease of space, not adjusted to reflect the additional value the prospective lessee or lessor would attribute to the proximity or convenience to the lessor where the lessor is a potential source of patient referrals to the lessee.

(c) "Financial relationship" shall mean an ownership interest, investment interest or compensation arrangement.

(d) "General hospital" shall mean a hospital engaged in providing medical or medical and surgical services primarily to in-patients by or under the supervision of a physician on a twenty-four hour basis with provisions for admission or treatment of persons in need of emergency care and with an organized medical staff and nursing service, including facilities providing services relating to particular diseases, injuries, conditions or deformities. The term general hospital shall not include a residential health care facility, public health center, diagnostic center, treatment center, out-patient lodge, dispensary and laboratory or central service facility serving more than one institution.

(e) "Group practice" shall mean a group of two or more practitioners organized as a partnership, professional corporation, foundation, not-for-profit corporation, faculty practice plan or similar association; and

(1) in which each practitioner who is a member of the group provides substantially the full range of services which the practitioner routinely provides, including medical care, consultation, diagnosis or treatment, through the joint use of shared office space, facilities, equipment and personnel; and

(2) for which substantially all of the services of the practitioners who are members of the group are provided through the group and are billed in the name of the group and amounts so received are treated as receipts of the group; and

(3) in which the overhead expenses of the income from the practice are distributed in accordance with methods previously determined by members of the group; and

(4) provided, however, in the case of a faculty practice plan associated with a hospital with an approved residency training program in which practitioner members may provide a variety of different specialty services and provide professional services both within and outside the group, as well as perform other tasks such as research, the provisions of paragraphs (1), (2) and (3) of this subdivision shall be applied only with respect to the services provided within the faculty practice plan.

(f) "Health care provider" shall mean a practitioner in an individual practice, group practice, partnership, professional corporation or other authorized form of association, a hospital or other health care institution issued an operating certificate pursuant to the public health law or the mental hygiene law, a certified home health agency or a licensed home care services agency, and any other purveyor of health or health related items or services including but not limited to a clinical laboratory, a physiological laboratory, a pharmacy, a purveyor of x-ray or imaging services, a purveyor of physical therapy services, a purveyor of health or health related supplies, appliances or equipment, or an ambulance service.

(g) "Health or health related items or services" shall include, but not be limited to, items and services available under the medical assistance program pursuant to title eleven of article five of the social services law.

(h) "Immediate family member" shall include spouse; natural and adoptive parents, children and siblings; stepparents, stepchildren and step-siblings; fathers-in-law, mothers-in-law, brothers-in-law, sisters-in-law, sons-in-law and daughters-in-law; and grandparents and grandchildren.

(i) "Interested investor" shall mean, with respect to a health care provider, an investor who is a practitioner in a position to make or to influence referrals or business to the health care provider, or who is an immediate family member of such an investor.

(j) "Investor" shall mean, with respect to a health care provider, a person with a financial relationship with the health care provider, subject to the exceptions provided in paragraph (b) of subdivision three, subdivision four and paragraph (b) of subdivision five of section 238(a) of the Public Health Law. (k) "Ownership interest" or "investment interest" shall mean an interest through equity, debt, or other means, but shall not include ownership of investment securities, including shares or bonds, debentures, notes or other debt instruments, which were purchased on terms generally available to the public and which are in a corporation that is listed for trading on the New York stock exchange or on the American stock exchange, or is a national market system security traded under an automated interdealer quotation system operated by the national association of securities dealers, and had, at the end of the corporation's most recent fiscal year, total assets exceeding one hundred million dollars.

(l) "Pharmacy services" shall mean the preparing, compounding, preserving or, the dispensing of drugs, medicines and therapeutic devices on the basis of prescriptions or other legal authority.

(m) "Practitioner" shall mean a licensed or registered physician, dentist, podiatrist, chiropractor, nurse, midwife, physician assistant or specialist assistant, physical therapist, or optometrist.

(n) "Rural" shall mean a county with population of two hundred thousand persons or less, or a town with a population density of one hundred fifty persons or less per square mile.

(o) "X-ray or imaging services" shall mean diagnostic imaging techniques which shall include but not be limited to the following:

(1) conventional x-ray or radiology;

(2) fluoroscopy;

(3) digital radiography;

(4) computed tomography;

(5) magnetic resonance imaging;

(6) nuclear imaging;

(7) ultrasonography; and

(8) angiography.

(p) "Radiation therapy services" shall mean the use of high-energy xrays, particles, or radiation materials for the treatment of cancer and other diseases or conditions. (q) Effective December 8, 2002, "physical therapy services" shall mean physical therapy as defined by section sixty-seven hundred thirty-one of the Education Law.

Effective Date: 
Wednesday, December 26, 2001
Doc Status: 
Complete

Section 34-1.3 - Referrals prohibited

34-1.3 Referrals prohibited.

Except as provided in this Part or in Public Health Law Article 2 Title II-D, a practitioner authorized to order clinical laboratory services, pharmacy services, radiation therapy services, or x-ray or imaging services may not make a referral for such services to a health care provider authorized to provide such services where such practitioner or immediate family member of such practitioner has a financial relationship with such health care provider. A referral shall not be construed to include an arrangement whereby a treating practitioner makes arrangements with another covering practitioner for the treatment and/or care of the treating practitioner's patients for services routinely provided by the treating practitioner when the treating practitioner is unavailable to treat such patients. (a) Effective December 8, 2002, physical therapy services shall be subject to all applicable provisions of this Subpart governing designated health services to the same extent that clinical laboratory services, pharmacy services, radiation therapy services, or x-ray or imaging services are subject to this Subpart, including, but not limited to, provisions governing prohibited referrals, disclosure requirements, disclosure forms and financial relationships.

Effective Date: 
Wednesday, December 26, 2001
Doc Status: 
Complete

Section 34-1.4 - Disclosure: Clinical laboratory services, pharmacy services or x-ray

34-1.4 Disclosure: Clinical laboratory services, pharmacy services, radiation therapy services, or x-ray or imaging services.

(a) An ownership interest or investment interest shall not be subject to Public Health Law section 238-a(1)(a) or to section 34-1.3 of this Subpart if:

(1) the health care provider authorized to provide clinical laboratory services, pharmacy services, raditation therapy services, or x-ray or imaging services is in a rural area, and the referring practitioner or the patient is in such rural area; or

(2) the clinical laboratory services, pharmacy services, ratiation therapy services, or x-ray or imaging services are provided by a general hospital, the referring practitioner is authorized to perform services at such general hospital and the ownership or investment interest is in the general hospital itself and not merely in a subdivision thereof; or

(3) the clinical laboratory services, pharmacy services, radiation therapy services, or x-ray or imaging services are provided by an ambulatory surgical center issued an operating certificate pursuant to Part 401 of this title in conjunction with a surgical procedure performed by the referring practitioner at the ambulatory surgical center; and

(4) if each practitioner who is an interested investor in a health care provider within a category specified in paragraph (1), (2) and (3) of this subdivision discloses to the patient the practitioner's, or family member's, ownership interest or investment interest in the health care provider and the patient's right to utilize a specifically identified alternative health care provider if any such alternative is reasonably available, in the disclosure form specified in section 34-1.6 of this Subpart. Such form shall also be posted prominently in the practitioner's office.

(b) A practitioner shall maintain documentation of each instance of disclosure to a patient pursuant to this section.

Effective Date: 
Wednesday, December 26, 2001
Doc Status: 
Complete

Section 34-1.5 - Disclosure: other health or health related items or services.

34-1.5 Disclosure: other health or health related items or services.

(a) With respect to referrals for health or health related items or services other than clinical laboratory services, pharmacy services, radiation therapy services, or x-ray or imaging services, and except as provided in subdivision (c) of this section, a practitioner may not make a referral to a health care provider for the furnishing of health or health related items or services where such practitioner or immediate family member of such practitioner has any of the following financial relationships without disclosing to the patient such financial relationship:

(1) an ownership or investment interest with such health care provider; or

(2) a compensation arrangement with such health care provider which is in excess of fair market value, or which provides for compensation that varies directly or indirectly based on the volume or value of any referrals of business between the parties.

(b) The disclosure shall provide notice of any such financial relationship and shall also inform the patient of his or her right to utilize a specifically identified alternative health care provider if any such provider is reasonably available, and shall be in the form specified in section 34-1.6 of this Subpart. Such form shall also be posted prominently in the practitioner's office.

(c) Disclosure pursuant to this section shall not be required for a referral for the furnishing of any health or health related items or services under circumstances for which a referral for clinical laboratory services, pharmacy services, radiation therapy services, or x-ray or imaging services would not be prohibited pursuant to section 238-a of the Public Health Law, provided that any disclosure required by section 34-1.4 of this Subpart for clinical laboratory services, pharmacy services, radiation therapy services, or x-ray or imaging services remains applicable to referrals for other health, or health related items or services under comparable circumstances.

(d) A practitioner shall maintain documentation of each instance of disclosure to a patient pursuant to this section.

Effective Date: 
Wednesday, December 26, 2001
Doc Status: 
Complete

Section 34-1.6 - Disclosure form

34-1.6 Disclosure form.
NOTICE TO PATIENTS
Because of concerns that there may be a conflict of interest when a physician refers a patient to a health care facility in which the physician has a financial interest, New York State passed a law. The law prohibits me, with certain exceptions, from referring you for clinical laboratory services, pharmacy services, radiation therapy services, or x-ray or imaging services to a facility in which I or any of my immediate family members have a financial interest. If certain of the exceptions in the law apply, or if I am referring you for other than clinical laboratory, pharmacy, radiation therapy, or x-ray or imaging services, I can make the referral under one condition. The condition is that I disclose this financial interest and tell you about alternative providers where you may go to obtain these services. This disclosure is intended to help you make a fully informed decision about your health care.
I or my immediate family members have a financial relationship with the following providers: __________________________________________________________________ __________________________________________________________________ __________________________________________________________________
For more information about alternative providers, please ask me or my staff. We will provide you with names and addresses of providers best suited to your individual needs that are nearest to your home or place of work.

Name of Physician

Effective Date: 
Wednesday, December 26, 2001
Doc Status: 
Complete

Section 34-1.7 - Exceptions from compensation arrangement prohibitions.

34-1.7 Exceptions from compensation arrangement prohibitions.
The following shall not be considered to be compensation arrangements subject to Public Health Law section 238-a(1)(a) or to section 34-1.3 of this Subpart:

(a) Rental of equipment: Payments made by a lessee of equipment to the lessor of the equipment for the use of the equipment, if:

(1) the lease is set out in writing, signed by the parties, and specifies the equipment covered by the lease;

(2) the equipment rented or leased does not exceed that which is reasonable and necessary for the legitimate business purposes of the lease or rental and is used exclusively by the lessee when being used by the lessee;

(3) the lease provides for a term of rental or lease of at least one year;

(4) the rental charges over the term of the lease are set in advance, are consistent with fair market value, and are not determined in a manner that takes into account the volume or value of any referrals or other business generated between the parties; and

(5) the lease would be commercially reasonable even if no referrals were made between the parties.

(b) Bona fide employment relationships: Any amount paid by an employer to a physician (or an immediate family member of such physician) who has a bona fide employment relationship with the employer for the provision of services, if:

(1) the employment is for identifiable services;

(2) the amount of the remuneration under the employment

(i) is consistent with the fair market value of the services; and

(ii) is not determined in a manner that takes into account (directly or indirectly) the volume or value of any referrals by the referring physician; and

(3) the remuneration is provided pursuant to an agreement which would be commercially reasonable even if no referrals were made to the employer. Subparagraph (2)(ii) shall not prohibit the payment of remuneration in the form of a productivity bonus based on services performed personally by the physician (or an immediate family member of such physician).

(c) Personal service arrangements: Remuneration from an entity under an arrangement if

(1) the arrangement is set out in writing, signed by the parties, and specifies the services covered by the arrangement;

(2) the arrangement covers all of the services to be provided by the physician (or an immediate family member of such physician) to the entity;

(3) the aggregate services contracted for do not exceed those that are reasonable and necessary for the legitimate business purposes of the arrangement;

(4) the term of the arrangement is for at least one year;

(5) the compensation to be paid over the term for the arrangement is set in advance, does not exceed fair market value, and is not determined in a manner that takes into account the volume or value of any referrals or other business generated between the parties;

(6) the services to be performed under the arrangement do not involve the counseling or promotion or a business arrangement or other activity that violates any state or federal law.

(d) Payments by a physician for items and services: Payment made by a physician

(1) to a laboratory in exchange for the provision of clinical laboratory services, or

(2) to an entity as compensation for other items or services if the items or services are furnished at a price that is consistent with fair market value.

(e) Remuneration consisting of any of the following:

(1) the forgiveness of amounts owed for inaccurate tests or procedures, mistakenly performed tests or procedures, or the correction of minor billing errors;

(2) the provision of items, devices, or supplies that do not have any generally accepted use in health care practices other than to, and are actually used solely to

(i) collect, transport, process, or store specimens for the entity providing the item, device or supply, or

(ii) order or communicate the results of tests or procedures for such entity;

(3) a payment made by an insurer or a self-insured plan to a practitioner to satisfy a claim, submitted on a fee for service basis, for the furnishing of health services by that practitioner to an individual who is covered by a policy with the insurer or by the self-insured plan, if

(i) the health services are not furnished, and the payment is not made, pursuant to a contract or other arrangement between the insurer or the plan and the practitioner,

(ii) the payment is made to the practitioner on behalf of the covered individual and would otherwise be made directly to such individual, and

(iii) the amount of the payment is set in advance, does not exceed fair market value, and is not determined in a manner that takes into account directly or indirectly the volume or value of any referrals.

(f) Payments for services furnished in an ambulatory surgical center or a chronic renal dialysis center facility issued an operating certificate pursuant to Article 28 of the Public Health Law, if payment for those services is included in a rate that is substantially similar or equivalent to the ambulatory surgical center (ASC) rate reimbursable by the Medicare Program pursuant to 42 CFR Part 416 Subpart E, or a rate substantially similar to the End Stage Renal Disease composite rate reimbursable by the Medicare Program pursuant to 42 CFR Part 413 Subpart H, respectively.

(g) Payments for services provided by a hospice licensed pursuant to Article 40 of the Public Health Law, if payment for those services is included in a rate that is substantially similar or equivalent to the per-diem hospice charge reimbursable by the Medicare program set forth in 42 CFR Part 418 Subpart G.

Effective Date: 
Wednesday, December 26, 2001
Doc Status: 
Complete

SubPart 34-2 - Laboratory Business Practices

Effective Date: 
Wednesday, November 22, 2017
Doc Status: 
Complete
Statutory Authority: 
Public Health Law, sections 586(3) and 587(6)

Section 34-2.1 - Title

34-2.1 Title.

This Subpart shall be known and cited as "Laboratory Business Practices".

Effective Date: 
Wednesday, December 26, 2001
Doc Status: 
Complete

Section 34-2.2 - Definitions

34-2.2 Definitions. Whenever used in this Subpart, the following terms shall have the following meanings:

(a) Agent means an individual who agrees, pursuant to a written agreement with another, the principal, to act on behalf of, instead of, and subject to the authority and control of, the principal with regard to acts described in the agreement and to perform such acts with individual good faith, loyalty and fidelity to the principal.

(b) Clinical laboratory means a facility for the microbiological, immunological, chemical, hematological, biophysical, cytological, pathological, genetic or other examination of materials derived from the human body, for the purpose of obtaining information for the diagnosis, prevention or treatment of disease, or the assessment of a health condition, or for identification purposes. Such examinations shall include procedures to determine, measure, or otherwise describe the presence or absence of various substances, components or organisms in the human body. Clinical laboratory does not mean any facility or activity specifically excluded by section 579 of the Public Health Law.

(c) Clinical laboratory services means examinations, tests and/or analyses performed by a clinical laboratory.

(d) Consideration means anything of value or benefit, in cash or in kind.

(e) Contract for laboratory management services means a legally enforceable written agreement between a clinical laboratory under department permit and a hospital or a health maintenance organization, whereby the contracting clinical laboratory:

(1) agrees to provide laboratory management services at fair market value at a facility of a contracting hospital; or

(2) agrees to provide laboratory management services at fair market value at a facility of a contracting health maintenance organization; or

(3) agrees to provide clinical laboratory services at the laboratory’s facility, and directly related services, all at fair market value, pursuant to a referral by the contracting hospital or health maintenance organization.

(f) Department means the New York State Department of Health.

(g) Directly related equipment and supplies means equipment and supplies provided by a clinical laboratory to a referring health services purveyor of a size, type and quantity reasonably related to the type and number of specimens being referred by the health services purveyor to the clinical laboratory, and which are used by the referring health services purveyor solely and exclusively for the collection, processing, storage, preservation, transport, or disposal of specimens, and which have no generally accepted use in health care practices other than solely for the collection, processing, storage, preservation, transport, or disposal of specimens.

(h) Directly related services means the following services, which are or can be performed by a clinical laboratory and are integral to the clinical laboratory services performed on referred specimens:

(1) the collection, processing, storage, preservation, transport, acceptance, or disposal of referred specimens;

(2) the reporting of test results to the referring health services purveyor; or

(3) the receipt, storage and transmittal of information between the clinical laboratory and the health services purveyor necessary for test ordering, requisitioning, reporting or billing.

(i) Fair market value means that value, calculated in monetary terms and not by bartering, in arms length transactions, consistent with general market value. The fair market value of clinical laboratory services is deemed to include the value of directly related equipment and supplies, and directly related services. With respect to rentals or leases of property and space, fair market value shall be:

(1) consistent with the value of rental property for general commercial purposes, not taking into account the property's intended use; and

(2) not adjusted to reflect the additional value the prospective lessee or lessor would attribute to the proximity or convenience to the lessor, where the lessor is a potential source of patient referrals to the lessee.

(j) Financial relationship means an ownership interest, investment interest or compensation arrangement, as those terms are defined or used in Public Health Law sections 238 and 238-a.

(k) Functions directly related to clinical laboratory operations means functions which are necessary and integral to, and have as their sole and exclusive purpose, the operation of a clinical laboratory, and may include clinical laboratory services and directly related services.

(l) Governmental agency means a department, board, bureau, division, office, agency, public benefit or other corporation, or any other unit, however described, of a state or of a political subdivision of a state, or the federal government.

(m) Health maintenance organization (HMO) means an organization operating in accordance with article 43 of the Insurance Law or article 44 of the Public Health Law, and includes an agent of the health maintenance organization.

(n) Health or health related services includes, but is not limited to, items and services available under the New York State Medical Assistance Program (Medicaid).

(o) Health services purveyor (HSP) means any person, firm, partnership, group, association, business corporation, not-for-profit corporation, professional corporation, limited liability company, or any agent, employee, fiduciary, employer or representative thereof, including, but not limited to, an entity that provides health related services, a physician, dentist, podiatrist, chiropractor, either in individual practice, group practice or employed in a facility owned by any person, group, association, firm, partnership, business corporation, not-for-profit corporation, professional corporation, limited liability company, hiring any one of the aforementioned practitioners who provides health or health related services.

(p) Hospital means a facility or institution defined in Public Health Law section 2801(1).

(q) Immediate family member means any of the following, whether natural or adoptive: spouse; parent; child and sibling; stepparent, stepchild and stepsibling; father-in-law, mother-in-law, brother-in-law, sister-in-law, son-in-law and daughter-in-law; or grandparent and grandchild.

(r) Industrial firm means any employer, including, but not limited to:

(1) an agent of an employer; or

(2) an employer or employers who establish(es) or maintain(s) a single-employer or multi-employer employee benefit plan under the Employee Retirement Income Security Act of 1974 as amended (ERISA); or

(3) or an agent of an employee benefit plan.

(s) Insurance carrier includes, but is not limited to:

(1) an insurance carrier used by an employer; or

(2) the agent of an insurance carrier.

(t) Laboratory management services means some or all services necessary for the operation of a clinical laboratory, including but not limited to:

(1) directly related services; or

(2) services performed by a clinical laboratory employee, provided the services are directly related to clinical laboratory operations, and, provided that phlebotomy services, if rendered, are accompanied by actual clinical laboratory services by the laboratory providing the employee.

(u) Legal relative means an individual with legal authority to act on behalf of the recipient of services.

(v) Patient service center (PSC) is synonymous with collecting station or collecting depot, and means a facility, fixed or mobile, operated by a clinical laboratory for the collection, drawing and temporary storage of materials derived from the human body until such material is forwarded to a clinical laboratory for clinical laboratory services.

(w) Purveyor, as used in section 586 of the Public Health Law, means a clinical laboratory that does not receive from any health care practitioner or private medical practice having an ownership interest in the clinical laboratory any referrals for clinical laboratory services for patients of such health care practitioner or private medical practice. Notwithstanding any provision to the contrary, the term purveyor shall include any clinical laboratory owned by a hospital licensed pursuant to Article 28 of the Public Health Law or any clinical laboratory that is owned and operated by a publicly traded corporation.

(x) Residence means the location at which a test subject resides, whether on a temporary or permanent basis, and whether or not the living arrangement is voluntary, and is not necessarily the subject’s legal residence.

(y) Trade union health facility means:

(1) a facility owned and operated by trade union to provide health or health related services to its members or their families; or

(2) an agent of a trade union health facility.

Effective Date: 
Wednesday, December 26, 2001
Doc Status: 
Complete

Section 34-2.3 - Prohibited business practices by health services purveyors -- general

34-2.3 Prohibited business practices by health services purveyors -- general.

(a) No health services purveyor shall solicit, receive, accept, or agree to receive or accept any payment or other consideration from a clinical laboratory, or its agent, employee or fiduciary for the referral of specimens for the performance of clinical laboratory services.

(b) No health services purveyor shall participate in the division, transference, assignment, rebate, or splitting of fees with any clinical laboratory, or its agent, employee or fiduciary, or with any other health services purveyor, in relation to clinical laboratory services.

Effective Date: 
Wednesday, December 26, 2001
Doc Status: 
Complete

Section 34-2.4 - Prohibited business practices by clinical laboratories

34-2.4 Prohibited business practices by clinical laboratories.

(a) No clinical laboratory, its agent, employee or fiduciary shall make, offer, give, or agree to make, offer or give, any payment or other consideration to a health services purveyor for the referral of specimens for the performance of clinical laboratory services.

(b) No clinical laboratory, its agent, employee or fiduciary, shall participate in the division, transference, assignment, rebate, or splitting of fees with any health services purveyor, or with another clinical laboratory, in relation to clinical laboratory services.

Effective Date: 
Wednesday, December 26, 2001
Doc Status: 
Complete

Section 34-2.5 - Equipment, supplies and services

34-2.5 Equipment, supplies and services.

(a) The provision at less than fair market value of equipment and supplies by a clinical laboratory to a health services purveyor is prohibited, except that a clinical laboratory may offer to provide, and a referring health services purveyor may accept, directly related equipment and supplies.

(b) A clinical laboratory may offer to perform, and a referring health services purveyor may accept, directly related services, unless prohibited by this Subpart.

(c) Any equipment and supplies provided to a health services purveyor by a clinical laboratory, which is used in a manner prohibited by this Subpart and which is in the possession of the health services purveyor at the time this Subpart becomes effective, shall be returned to the clinical laboratory by the health services purveyor or reclaimed by the clinical laboratory within sixty (60) days of the effective date of this Subpart.

Effective Date: 
Wednesday, December 26, 2001
Doc Status: 
Complete

Section 34-2.6 - Space

34-2.6 Space.

(a) The rental of space by a clinical laboratory from a referring health services purveyor, or an immediate family member of such purveyor, for more than fair market value, or under circumstances where the rental amount is affected by the volume or value of tests ordered by the health services purveyor shall be deemed consideration given for referral of specimens for performance of clinical laboratory services, and is prohibited.

(b) The rental of space by a clinical laboratory from a referring health services purveyor for storage of supplies provided by the laboratory to the health services purveyor shall be deemed consideration given for referral of specimens for performance of clinical laboratory services, and is prohibited.

(c) The location of a PSC by a clinical laboratory, within or sharing space in any part of the practice, administrative, office or waiting area of any health services purveyor that refers specimens to the clinical laboratory, shall be deemed consideration given for referral of specimens for performance of clinical laboratory services, and is prohibited.

(d) A PSC may be located in a building in which a health services purveyor that refers specimens to the clinical laboratory operating the PSC has a direct or indirect ownership, investment or leasehold interest, under the following circumstances:

(1) the PSC is the subject of a signed written lease, available to the department, which conforms to the requirements of Public Health Law section 238-a(5)(b)(i)(A) and implementing regulations; and

(2) the PSC is open to and actually serves the general public and operates independently from the health services purveyor, and meets all of the following criteria:

(i) the PSC actually collects a substantial number of specimens from patients of other health services purveyors which do not have a direct or indirect financial relationship with a referring health service purveyor who has an ownership, investment or leasehold interest in the building;

(ii) the PSC has its own entrance, exit, and waiting area, except that the PSC may use a waiting area that is generally shared by all tenants or occupants of the building or an entire floor of the building, provided there are two or more tenants renting separate office spaces who are not referring health services purveyors;

(iii) the PSC is identified on signs, consistent with signage of other tenants or occupants, on the outside of the building and within the building;

(iv) the PSC has its own telephone line, separate and distinct from that of any referring health services purveyor, and telephone listings for the clinical laboratory include the PSC's telephone number;

(v) advertisements and other public notices by the clinical laboratory list the address and telephone number of the PSC;

(vi) the hours the PSC is open are independent and not restricted to the hours of one or more referring health services purveyors in the building; and

(vii) the PSC patients of health services purveyors not located in the building have access to a restroom other than those of health services purveyors in the building.

(e) A clinical laboratory shall, within sixty (60) days from the effective date of this Subpart, bring any PSC which it operates at locations as described in subsection (d) of this section, into compliance with the requirements of paragraphs (d)(1) and (2) of this section, or shall cease operation of the PSC. However, a clinical laboratory may request in writing to the department an extension of time for complying with this Subpart with respect to a PSC. Such request shall be made within thirty (30) calendar days from the effective date of this Subpart, shall state the reason(s) that the PSC cannot be brought into compliance with the requirements of this Subpart, and shall document a plan of correction acceptable to the department. The department may extend the grace period granted pursuant to this subdivision for a period not to exceed one hundred eighty (180) days from the effective date of this Subpart.

Effective Date: 
Wednesday, December 26, 2001
Doc Status: 
Complete

Section 34-2.7 - Employees

34-2.7 Employees.

(a) Except as provided in subdivision (b) below, employees, agents or other fiduciaries of any clinical laboratory, when supplied by the clinical laboratory to a referring health services purveyor to perform functions and duties in the facility of the health services purveyor, shall be deemed consideration given for referral of specimens for performance of clinical laboratory services, and is prohibited.

(b) Nothing in Public Health Law section 587 or in this Subpart shall be construed as prohibiting a hospital or an HMO and a clinical laboratory from entering into a contract for laboratory management services, including provision of technical services and employees for the performance of functions directly related to clinical laboratory operations.

(c) Payment or reimbursement by a clinical laboratory to a health services purveyor for clinical laboratory services and/or directly related services, which had been rendered by the health services purveyor or such purveyor's employees, agents or fiduciaries, shall be deemed consideration given for referral of specimens for performance of clinical laboratory services, and is prohibited. However, a clinical laboratory may enter into a written contract with a hospital, HMO or another clinical laboratory for the provision of phlebotomy services, clinical laboratory services, or directly related services to the contracting clinical laboratory, provided such services are rendered at fair market value and not in connection with individuals who are patients or clients of the hospital, HMO or other clinical laboratory.

(d) Nothing in this Subpart shall prohibit the employees, agents or fiduciaries of a clinical laboratory from visiting a residence for the purpose of drawing blood, or otherwise obtaining or collecting specimens, provided that:

(1) such visits shall not result in a substantially permanent presence and shall be established according to a schedule, available in the laboratory, or upon specific request of the health care provider or other authorized person responsible for care of the patient, and documented by the laboratory; and

(2) while at the residence, the employees, agents or fiduciaries of the laboratory do not provide any supplies, services or assistance, directly or indirectly, to the operators, nursing or medical staff or other individuals other than as stated in this Subpart; and

(3) during such visits, the activities of the employees, agents or fiduciaries of the laboratory are limited to:

(i) reviewing the orders for laboratory tests from the patient's health services purveyor, without reviewing the patient’s chart;

(ii) scheduling the collection of specimens for future tests, without reviewing the patient’s chart;

(iii) collecting specimens;

(iv) labeling the collected specimens;

(v) recording the number and kinds of specimens collected;

(vi) taking steps necessary to ensure that the test requisition forms are properly completed pursuant to orders from the patient's health care provider;

(vi) centrifuging blood specimens;

(vii) causing adequate and sanitary equipment and supplies to be maintained, when appropriate, at a residence, solely for the collection, preservation and transport of specimens; and

(viii) taking steps necessary to ensure the integrity of specimens which are stored, when appropriate, at a residence awaiting transport to the clinical laboratory; and

(4) no rent is paid by the clinical laboratory for the storage of equipment and supplies or specimens, or for any other purpose.

Effective Date: 
Wednesday, December 26, 2001
Doc Status: 
Complete

Section 34-2.8 - Professional courtesy

34-2.8 Professional courtesy.

The provision of clinical laboratory services by a clinical laboratory for health services purveyors, their families, or their employees, agents, or fiduciaries at a charge which is below the lower of the applicable Medicare fee schedule amount or the national limitation amount as defined by the Medicare program for such services is consideration given for referral of specimens for performance of clinical laboratory services, and is prohibited.

Effective Date: 
Wednesday, December 26, 2001
Doc Status: 
Complete

Section 34-2.9 - Computers

34-2.9 Computers.

(a) The provision, at less than fair market value, of computers, including hardware, hard drives, or monitors; or of computer equipment or supplies such as stands, tables, printers, printer stands, interfacing telephone lines, or modems; or of software, by a clinical laboratory to a health services purveyor, is prohibited, except as stated below.

(b) Nothing in Public Health Law section 587 or in this Subpart shall be construed to prohibit a clinical laboratory from providing a computer, computer equipment, computer supplies and/or software, and/or developing and providing software, to a health services purveyor, under the following circumstances:

(1) the computer, computer equipment, computer supplies and/or software are solely and exclusively used for, and are solely and exclusively dedicated to, enabling the health services purveyor to:

(i) make referrals of specimens for the performance of clinical laboratory services to the clinical laboratory; or

(ii) receive, access, print and/or store test results from the clinical laboratory, including cumulative test results concerning a particular patient, and including test related information stored by the clinical laboratory; or

(iii) transmit data to the clinical laboratory necessary for preparation of laboratory requisition forms and/or billing invoices; or

(iv) transfer laboratory related data from the clinical laboratory to any computer system maintained by the health services purveyor; and

(2) the clinical laboratory takes reasonable steps to ensure that the computer, computer equipment, computer supplies and/or software are solely and exclusively used as set forth in this Subpart; and

(3) the clinical laboratory reasonably monitors the use of the computer, computer equipment, computer supplies and/or software; and

(4) ownership of the computer, computer equipment, computer supplies and/or software remains in the clinical laboratory; and

(5) the clinical laboratory is responsible for all repair and maintenance of the computer, computer equipment and/or software; and

(6) the clinical laboratory maintains reasonable documentation that the computer, computer equipment, computer supplies and/or software is being used solely and exclusively as set forth in this Subpart.

(c) Nothing in Public Health Law section 587 or in this Subpart shall be construed to prohibit a general hospital licensed pursuant to Article 28 of the Public Health Law from providing a computer, computer equipment, computer supplies and/or software to a health services purveyor to facilitate the delivery of clinical laboratory services and health services to inpatients and outpatients of the general hospital, including, but not limited to, records access, patient admission, outpatient or inpatient service scheduling, and clinical laboratory service authorization, provided that the health services purveyor is a staff member or has professional privileges at the general hospital.

(d) Any computer, computer equipment, computer supplies and/or software provided to a health services purveyor in a manner prohibited by this Subpart, and which is in the possession of the health services purveyor at the time this Subpart becomes effective, shall be:

(1) returned to the clinical laboratory by the health services purveyor or reclaimed by the clinical laboratory within sixty (60) days of the effective date of this Subpart; or

(2) brought into compliance with this Subpart within sixty (60) days of the effective date of this Subpart.

Effective Date: 
Wednesday, December 26, 2001
Doc Status: 
Complete

Section 34-2.10 - Waste disposal

34-2.10 Waste disposal.

The disposal or payment for disposal by a clinical laboratory for a health services purveyor of hazardous waste, radioactive waste and/or regulated medical waste shall be deemed consideration given for referral of specimens for performance of clinical laboratory services, and is prohibited.

Effective Date: 
Wednesday, December 26, 2001
Doc Status: 
Complete

Section 34-2.11 - Recall letters and reporting of test results

34-2.11 Recall letters and reporting of test results. 

(a) A clinical laboratory shall not communicate to a patient of a referring health services purveyor that a clinical laboratory test, including, but not limited to a Pap smear, is or will be due to be performed, or that a visit to the health services purveyor for diagnosis or treatment is or will be due. A clinical laboratory shall not prepare such communication for the health services purveyor to send, or otherwise facilitate the preparation or sending of such communication by the health services purveyor. Such communication or its facilitation shall be deemed consideration given for referral of specimens for performance of clinical laboratory services, and is prohibited.

(b) A clinical laboratory shall not communicate to a patient of a referring health services purveyor the results of a clinical laboratory test, including, but not limited to, a Pap smear. A clinical laboratory shall not prepare such communication for the health services purveyor to send, or otherwise facilitate the preparation or sending of such communication by the health services purveyor. Such communication or its facilitation shall be deemed consideration given for referral of specimens for performance of clinical laboratory services and is prohibited, except that:

(1) a clinical laboratory may communicate in writing to the patient (by mail or electronically) an accurate and complete account of the result of the laboratory test along with information required to be included in a report of test results pursuant to Subpart 58-1 of this Title under the following circumstances:

(i) the laboratory test results have already been, or are simultaneously being communicated to the referring health services purveyor authorized by law to order and use the results of laboratory tests;

(ii) the clinical laboratory advises the patient that the referring health services purveyor authorized by law to order and use the results of laboratory tests has received or is receiving the test results;

(iii) the clinical laboratory shall include, in the communication to the patient, a clear statement, presented in a prominent manner, to the effect that the communication should not be viewed as medical advice and is not meant to replace direct communication with a physician or other health service purveyor; 

(iv) the clinical laboratory directs the patient's inquiries regarding the meaning or interpretation of the test results to the referring health services purveyor; and

(v) the communication to the patient does not include any information which would be consideration given for referral of specimens, including, but not limited to, medical advice specifically directed at the patient concerning the patient’s condition, including diagnosis or treatment of the patient’s condition. 

(2) nothing in this subdivision shall prohibit a licensed physician from communicating with a patient:

(i) when requested by the referring health services purveyor;

(ii) when requested by the patient; or

(iii) when the referring health services purveyor, or other health services purveyor responsible for using the test results, cannot be reached and a critical value needs to be communicated to the patient.

Effective Date: 
Wednesday, November 22, 2017
Doc Status: 
Complete

Section 34-2.12 - Waiver of co-payments, co-insurance, deductibles and fees

34-2.12 Waiver of co-payments, co-insurance, deductibles and fees.

(a) Routine waiver by a clinical laboratory of co-payments, co-insurance, or deductibles for clinical laboratory services performed for recipients of such services who are patients of a referring health services purveyor shall be deemed consideration given for referral of specimens for performance of clinical laboratory services, and is prohibited.

(b) Waiver of fees for clinical laboratory services for the patients of a referring health services purveyor who are enrolled in an HMO by a clinical laboratory which is not a participating laboratory of the HMO, where such waiver results in consideration being received by the referring health services purveyor, shall be deemed consideration given for referral of specimens for performance of clinical laboratory services, and is prohibited.

(c) Nothing in Public Health Law section 587 or in this Subpart shall be construed to prohibit a clinical laboratory from:

(1) waiving a co-payment, co-insurance, deductible, or fee for a particular patient based on the patient's inability to pay, in which case the clinical laboratory shall maintain a record documenting the patient's inability to pay; or

(2) waiving a co-payment, co-insurance, deductible or fee, if the cost of collection is greater than the amount to be collected.

(d) Nothing in Public Health Law section 587 or in this Subpart shall be construed to prohibit a clinical laboratory from offering a discount to a referring health services purveyor provided that:

(1) the health services purveyor appropriately reflects the discount on any costs or charges reported and/or claimed by the health services purveyor under any third party reimbursement program; and

(2) the discounted price is consistent with fair market value; or

(3) the discounted price reflects a volume discount, whereby the amount of the discount is reasonably related to costs saved by the clinical laboratory.

Effective Date: 
Wednesday, December 26, 2001
Doc Status: 
Complete

Section 34-2.13 - Direct billing

34-2.13 Direct billing.

(a) Nothing contained in Public Health Law section 586 or this Subpart shall be construed to prohibit a clinical laboratory from sending a bill to or receiving payment for clinical laboratory services from the health services purveyor who ordered the clinical laboratory services, provided that:

(1) the clinical laboratory receives the name and/or other information relating to the test subject if the clinical laboratory is obligated to report such name and/or other information to the state or a local health department under state law or regulation;

(2) the bill for the clinical laboratory services shall be directed to the test subject or a payor expressly permitted by Public Health Law section 586 or this Subpart;

(3) the amount of the bill for clinical laboratory services shall be disclosed to the test subject or a payor expressly permitted by Public Health Law section 586 or this Subpart, and documentation of the disclosure shall be maintained by the health services purveyor who ordered the clinical laboratory services;

(4) if payment is made for the clinical laboratory services to the health services purveyor who ordered the clinical laboratory services, the payment amount must be equal to the amount stated in the clinical laboratory bill; and

(5) one of the following situations must apply:

(i) the cost of the clinical laboratory service is included in the usual and customary purchase price of a test kit that is approved by the federal Food and Drug Administration to be commercialized as a test kit that includes a collection device, specimen transport materials, and the clinical laboratory service; or

(ii) the clinical laboratory services are performed in relation to: a termination of pregnancy; testing for a sexually transmissible disease; HIV-related testing; drug abuse screening; or other tests specifically approved by the department where law or regulation recognizes the need for a heightened level of confidential protection of health information relating to the test subject.

Effective Date: 
Wednesday, December 26, 2001
Doc Status: 
Complete

Section 34-2.14 - Financial relationship

34-2.14 Financial relationship. A financial relationship between any entity and a referring health services purveyor, or any immediate family member of a referring health services purveyor, which relationship was secured or facilitated either directly or indirectly by or through the efforts of a clinical laboratory, shall be deemed consideration given for referral of specimens for performance of clinical laboratory services, and is prohibited.

Effective Date: 
Wednesday, December 26, 2001
Doc Status: 
Complete

Section 34-2.15 - Loans

34-2.15 Loans. Any loan for the benefit of a referring health services purveyor or for the benefit of any immediate family member of such purveyor, which was secured or facilitated either directly or indirectly by or through the efforts of a clinical laboratory shall be deemed consideration given for referral of specimens for performance of clinical laboratory services, and is prohibited.

Effective Date: 
Wednesday, December 26, 2001
Doc Status: 
Complete

Section 34-2.16 - Compliance

34-2.16 Compliance. It is the responsibility of the clinical laboratory and the health services purveyor to establish, including by appropriate documentation, that any practice between the two entities complies with this Subpart. Upon request from the department, the health services purveyor and/or the clinical laboratory shall make such documentation available for inspection and copying. If requested by the clinical laboratory, such documentation shall be eligible for exemption from disclosure under the Freedom of Information Law (article 6 of the Public Officers Law), pursuant to the authority in section 89(5) of the Public Officers Law.

Effective Date: 
Wednesday, December 26, 2001
Doc Status: 
Complete

Section 34-2.17 - Exclusions

34-2.17 Exclusions. Any payment or billing transaction authorized by the direct billing law (see Public Health Law section 586) shall not be rendered illegal by any provisions of Public Health Law section 587 or this Subpart.

Effective Date: 
Wednesday, December 26, 2001
Doc Status: 
Complete