(CN) – Florida can prohibit doctors from referring patients for lab work to companies in which those doctors hold ownership interests, a federal judge ruled.
Foreign renal dialysis centers challenged Florida’s referral statute, claiming it violates the commerce, due-process and equal-protection clauses of the Constitution.
If a doctor violates the statue and refers a patient to a company in which he holds an interest, he faces disciplinary action from the medical board and fines from the government.
Fresenius Medical Care Holdings led the dialysis centers in the lawsuit against Secretary of the Florida Department of Health M. Rony Francois. They sought declaratory judgment and injunctive relief, arguing that the Florida referral statute is preempted by a provision of the physician self-referral provision of the federal Stark law, named for its sponsor Rep. Pete Stark, D-Calif.
This law regulates how doctors can refer Medicare and Medicaid patients and has an exemption for clinical services.
U.S. Judge Stephan Mickle disagreed and granted Florida’s motion for summary judgment.
“There is no wording in the Stark law itself that evidences Congressional intent to preempt state laws governing patient referrals,” Mickle wrote.
“Taken together, the wording of the law, the legislative history, and the federal regulations implementing the Stark law show that Congress did not intend to displace more restrictive state laws governing physician referrals,” he continued. “As other Courts have recognized, the regulation of medical fees has traditionally been a state concern that has not been preempted by the federal Medicare statute.”
The foreign dialysis centers also claimed that Florida’s referral statute violates the commerce clause, saying the statue targets foreign renal services while ignoring domestic corporations that provide both renal dialysis and laboratory services.
But this contention also failed to convince the judge.
“In this case, the Florida referral statute applies equally to in-state and out-of-state businesses,” Mickle wrote. “It places no special burden on the interstate market. In this case, the Florida referral statute applies equally to in-state and out-of-state businesses. It places no special burden on the interstate market.”
The centers’ due-process and equal-protection claims were similarly unavailing.
“The Florida legislature had a legitimate concern that financial self-interest would create potential conflicts of interest and adversely impact the cost and quality of healthcare in Florida,” according to the 11-page ruling. “The Florida legislature could have reasonably concluded that self-referrals involving renal dialysis presented the same concerns as other referrals.”