§1308. Physician prohibitions; exceptions

A. Except as provided for in this Section, no physician licensed by the Louisiana State Board of Medical Examiners shall make a referral to any healthcare facility for the receipt of healthcare services if the referring physician or an immediate family member of the referring physician maintains a direct or indirect ownership interest in the healthcare facility. The prohibition contained in this Section shall apply only if both of the following conditions are met:

(1) The physician provides professional medical services within the primary service area of a rural hospital.

(2) The healthcare facility in which the physician or any immediate family member of the physician maintains a direct or indirect ownership is located within the primary service area of any rural hospital.

B. No healthcare facility in which a physician or any immediate family member of the physician maintains a direct or indirect ownership shall bill any patient, third party payer, or any other entity for healthcare services provided pursuant to a referral made in violation of this Section. Any healthcare facility that violates the prohibition contained in this Subsection shall refund any amount received for such services, with interest calculated at fourteen percent per annum from the date the payment was received by the healthcare facility.

C. No physician who refers a patient to a healthcare facility in contravention of this Section shall bill any patient, third party payer, or any other entity for professional services provided by the physician to the patient at the time during which the referral was made.

D. The prohibition contained in this Section shall not apply to the healthcare services furnished by a healthcare facility provided that the following criteria are met:

(1) The rural hospital in whose primary service area such facility is located is offered the option to participate in the ownership of the healthcare facility on commercially reasonable terms and conditions. Such offer shall be conveyed to the rural hospital in a written offer by the proposing party containing the terms and conditions of the offer. The rural hospital shall accept or reject such offer in writing within ninety days of receipt of the offer from the proposing party. In the case of acceptance by the rural hospital, the closing of the acquisition of such ownership interest shall occur within ninety days of the rural hospital's written acceptance of the offer unless such closing is delayed by mutual consent of the rural hospital and the proposing party. The rural hospital and the proposing party shall, at all times, act in good faith in accordance with the requirements of Civil Code Article 1759. The failure to act in good faith on the part of the rural hospital shall constitute a rejection by the rural hospital of such offer. The failure to act in good faith on the part of the proposing party shall constitute a failure to satisfy the requirement that an offer be made to the rural hospital as specified above.

(2) The terms and conditions upon which the rural hospital is offered the option to participate in ownership of the healthcare facility is at a price that is commensurate with the interest offered to such rural hospital, whether such purchase price is in the form of cash or debt, and such interest offered is not less than a majority interest in such healthcare facility.

(3) The rural hospital in whose primary service area such facility is located declines the opportunity to participate in the ownership of the healthcare facility after being provided with an opportunity to review the following with respect to the proposed healthcare facility: a bona fide business plan, including a financial feasibility study; pro forma income and balance sheets; and a sources and uses of funds analysis. Any documentation provided to a rural hospital by a proposing party shall not be subject to the Public Records Law unless the rural hospital enters into a joint venture with the proposing party. In the event the rural hospital and proposing party do not enter into a joint venture, the rural hospital shall certify to the proposing party that all copies of materials provided by the proposing party have been destroyed.

Acts 2006, No. 819, §1.