Chiropractors And The Code Of Law: Who's Affected?

New Jersey's Codey Law prohibits physicians from referring patients to healthcare services in which they hold an ownership interest. This includes ambulatory surgical centres and pharmacies. The law does not apply when physicians refer patients to their own medical offices and issue the bill for services. Chiropractors, like doctors, surgeons, and other specialists, are governed by both federal and state law in New Jersey. While the Codey Law does not explicitly mention chiropractors, they would fall under the category of physicians and thus be subject to the provisions of the law.

Does Codey Law apply to chiropractors in New Jersey?

The Codey Law in New Jersey, which has undergone several transformations since its passage, limits the number of ambulatory surgical centres that can be licensed in the state, restricts the transfer of ownership interests, and created mandatory registration requirements. The law specifically prohibits a physician from referring patients to those centres if they hold a "significant beneficial interest" in it, with a few exceptions. A "significant beneficial interest" is defined as "any financial interest".

The Codey Law is similar to the federal "Stark law", which is designed to limit a physician's ability to refer patients to other facilities or centres in which the doctor has an ownership interest.

In the state of New Jersey, the practice of medicine, whether by a doctor, surgeon, or chiropractor, is governed by both federal and state law. While federal law is implicated when one takes or accepts Medicare or Medicaid-related insurance plans, New Jersey laws and regulations govern those taking private or state-funded plans.

Therefore, the Codey Law does apply to chiropractors in New Jersey, as it does to any medical practitioner in the state.

What is the Codey Law?

The Codey Law is a law in the state of New Jersey that prohibits physicians from referring patients to healthcare services in which they hold an ownership interest. The law defines "healthcare services" as including pharmacies and ambulatory surgical centres. The Codey Law is similar to the federal "Stark Law", which is designed to limit a physician's ability to refer patients to other facilities or centres in which the doctor has an ownership interest. The main goal of the Stark Law is to reduce the temptation of "over-treating" patients simply because it serves a practitioner's financial interest.

The Codey Law specifically prohibits a physician from referring patients to ambulatory surgical centres if they hold a "significant beneficial interest" in it, with several crucial exceptions. One of these exceptions includes grandfathered practices, where the medical professional had a significant beneficial interest in the ambulatory surgical centre prior to July 31, 1991. This exception can also include immediate family members and other limited types of relationships to the grandfathered practitioner. Another exception includes certain types of treatment, such as renal dialysis and some ambulatory surgery performed under anaesthesia.

The Codey Law also limits the number of ambulatory surgical centres that can be licensed in the state of New Jersey, restricts the transfer of ownership interests, and created mandatory registration requirements. The law has undergone several transformations since its passage, with the 2009 amendments being the most notable.

The Codey Law, N.J.S.A. 45:9-22.4 to -22.9, defines a "significant beneficial interest" as "any financial interest". This broad definition means that any healthcare program that confers a financial benefit to a physician where a patient referral is involved will likely fall within its scope. The New Jersey Board of Pharmacy has upheld this law, stating that a medical practice may not own an in-practice pharmacy to which the physician owners refer patients. This ruling was affirmed by the Superior Court of New Jersey, Appellate Division.

What are the exceptions to the Codey Law?

The Codey Law, which applies to chiropractors, prohibits physicians from referring patients to a healthcare service in which they maintain a "significant beneficial interest". This includes any financial interest. However, there are several exceptions to this law.

The first exception is for "grandfathered practices". If a medical professional had a significant beneficial interest in an ambulatory surgical centre before July 31, 1991, they are exempt from the law. This exception can also extend to immediate family members and other limited relationships to the grandfathered practitioner.

The second exception is for certain types of treatment. The 2009 amendments to the Codey Law allow for an exception for physicians who refer patients to ambulatory surgical centres in which they have a significant beneficial interest, as long as certain requirements are met. These include:

• The medical procedure is performed in the physician's own office, and they issue the bill for the services.
• The treatment is renal dialysis.
• The treatment is ambulatory surgery performed under anaesthesia, with several additional requirements:

• The referring physician must perform the surgery.
• The referring physician's compensation in the facility is directly related to their proportion of ownership.
• Clinical decisions are made by the practitioner-owner and are in the best interest of the patient.
• Disclosure of the physician's significant beneficial interest is made to the patient before or upon referral and is done in writing.

The Codey Law also includes an "in-house" exception, which exempts "a medical treatment or procedure that is provided at the practitioner's medical office and for which a bill is issued directly in the name of the practitioner or the practitioner's office" from the referral prohibition. However, this exception does not apply to pharmacies, as dispensing medication is considered neither a "medical treatment" nor a "medical procedure".

There are several other minor exceptions listed in the statute, but the above covers the largest portion of physicians in New Jersey.

What is the impact of Codey Law on in-practice pharmacies?

In the US, the practice of medicine is governed by both federal and state laws. The Codey Law is a New Jersey state law that prohibits physicians from referring patients to healthcare services in which they hold an ownership interest. This definition of healthcare services includes pharmacies.

The Codey Law has undergone several transformations since its passage, most notably the 2009 amendments. The law limits the number of ambulatory surgical centres that can be licensed in the state of New Jersey, restricts the transfer of ownership interests, and created mandatory registration requirements.

The impact of the Codey Law on in-practice pharmacies is significant. It effectively prohibits medical practices from owning an in-practice pharmacy to which the physician owners refer patients. This was upheld by the Superior Court of New Jersey, Appellate Division, which determined that the Codey Law in-office exception was not applicable to pharmacies. The Court's decision affirmed that a physician may own a pharmacy but may not refer patients to that pharmacy.

The Codey Law, therefore, has the potential to shape the structure of medical practices and businesses in New Jersey. It ensures that physicians cannot refer patients to healthcare services, including pharmacies, in which they have a financial interest. This promotes impartiality in patient referrals and prevents potential conflicts of interest.

How is Codey Law different from Stark Law?

In the State of New Jersey, the practice of medicine is governed by both federal and state law. The federal "Stark Law" and the New Jersey "Codey Law" are similar in that they both prohibit physicians from referring patients to other facilities or centres in which the physician has a significant beneficial interest. However, there are several differences between the two laws.

Firstly, the Stark Law is a federal law, while the Codey Law is a state law specific to New Jersey. This means that the Stark Law applies across the United States, whereas the Codey Law only applies within the state of New Jersey.

Secondly, the Stark Law is broader in scope and applies to a wider range of healthcare services, including clinical laboratory services, physical therapy, radiology, and home health services. On the other hand, the Codey Law specifically targets ambulatory surgical centres and prohibits physicians from referring patients to these centres if they have an ownership interest.

Thirdly, the Stark Law includes a list of exceptions, such as referrals to another physician in the same practice or referrals for in-office ancillary services. The Codey Law also has some exceptions, including grandfathered practices where the physician had a significant beneficial interest in the ambulatory surgical centre prior to a specific date, and certain types of treatment, such as renal dialysis and ambulatory surgery performed under anaesthesia.

Fourthly, the enforcement of the laws differs. The Stark Law is enforced by the Department of Justice, the Centers for Medicare & Medicaid Services (CMS), and the Department of Health and Human Services. On the other hand, the enforcement of the Codey Law falls under the authority of the New Jersey Board of Medical Examiners and the Board of Pharmacy.

Finally, the penalties for violating the laws may differ. While both laws impose fines and civil monetary penalties, the Stark Law also includes criminal penalties, such as imprisonment, for submitting false claims. Additionally, violation of the Stark Law can result in exclusion from participation in federal healthcare programs, which can have significant repercussions for medical practitioners.

Frequently asked questions