New Jersey Codey Law Summary
The practice of physician self-referral, also known as “self-dealing,” occurs when a physician refers patients to entities in which they have a financial interest. This practice has the potential to compromise the integrity of medical decision-making, increase healthcare costs, and undermine patient trust. To address these concerns, many states have enacted laws prohibiting physician self-referral. In the state of New Jersey, the prohibition of physician self-referral is governed by the Codey Law.
The Codey Law, officially known as the Richard J. Codey Safe Playing Fields Act, was enacted in 2010 to protect children from exposure to harmful chemicals in artificial turf fields. However, the law also includes provisions that prohibit physician self-referral for certain medical services. Specifically, the law prohibits physicians from referring patients to entities in which they have a financial interest for certain designated health services, including clinical laboratory services, physical therapy, and advanced imaging.
Under the Codey Law, physician self-referral is considered a form of healthcare fraud and is subject to penalties under the New Jersey False Claims Act. Physicians who engage in self-referral may be subject to fines, civil penalties, and exclusion from participation in Medicaid and other government healthcare programs. Additionally, physicians who violate the self-referral prohibition may be subject to professional discipline by the state medical board, including suspension or revocation of their medical license.
The self-referral prohibition is intended to ensure that medical decision-making is based solely on the best interests of the patient, rather than financial incentives. By prohibiting physicians from referring patients to entities in which they have a financial interest, the law seeks to promote transparency, reduce healthcare costs, and protect the integrity of the healthcare system.
While the self-referral prohibition applies to all physicians in the state of New Jersey, certain exceptions apply. For example, physicians may refer patients to entities in which they have a financial interest if the entity is located in a medically underserved area or if the physician obtains a waiver from the Department of Health and Senior Services. Additionally, the self-referral prohibition does not apply to referrals for in-office ancillary services, such as blood tests and X-rays, that are performed and billed by the referring physician.
In order to comply with the self-referral prohibition, physicians should take care to ensure that their referrals are based solely on the medical needs of their patients, rather than financial considerations. Physicians should also be aware of the designated health services covered by the self-referral prohibition and seek guidance from legal counsel or healthcare compliance professionals if they have any questions or concerns.
In conclusion, the prohibition of physician self-referral in the state of New Jersey is an important measure to promote transparency, reduce healthcare costs, and protect the integrity of the healthcare system. By complying with the self-referral prohibition, physicians can ensure that their referrals are based solely on the best interests of their patients, rather than financial considerations.