AN ACT
Relating to physician referral; amending RCW 74.09.240, 18.64.011, and
18.64.255; reenacting and amending RCW 18.64.165; and adding new sections to
chapter 18.64 RCW.
BE IT ENACTED BY THE LEGISLATURE
OF THE STATE OF WASHINGTON:
Sec.
1. RCW
74.09.240 and 1979 ex.s. c 152 s 5 are each amended to read as follows:
(1)
Any person, including any corporation, that solicits or receives any
remuneration (including any kickback, bribe, or rebate) directly or indirectly,
overtly or covertly, in cash or in kind
(a) in
return for referring an individual to a person for the furnishing or arranging
for the furnishing of any item or service for which payment may be made in
whole or in part under this chapter, or
(b) in
return for purchasing, leasing, ordering, or arranging for or recommending
purchasing, leasing, or ordering any goods, facility, service, or item for
which payment may be made in whole or in part under this chapter,
shall be
guilty of a class C felony((: PROVIDED, That)); however, the
fine, if imposed, shall not be in an amount more than twenty-five thousand
dollars, except as authorized by RCW 9A.20.030.
(2)
Any person, including any corporation, that offers or pays any remuneration
(including any kickback, bribe, or rebate) directly or indirectly, overtly or
covertly, in cash or in kind to any person to induce such person
(a) to
refer an individual to a person for the furnishing or arranging for the
furnishing of any item or service for which payment may be made, in whole or in
part, under this chapter, or
(b) to
purchase, lease, order, or arrange for or recommend purchasing, leasing, or
ordering any goods, facility, service, or item for which payment may be made in
whole or in part under this chapter,
shall be
guilty of a class C felony((: PROVIDED, That)); however, the
fine, if imposed, shall not be in an amount more than twenty-five thousand
dollars, except as authorized by RCW 9A.20.030.
(3)(a)
Except as provided in 42 U.S.C. 1395 nn, physicians are prohibited from
self-referring any client eligible under this chapter for the following
designated health services to a facility in which the physician or an immediate
family member has a financial relationship:
(i)
Clinical laboratory services;
(ii)
Physical therapy services;
(iii)
Occupational therapy services;
(iv)
Radiology including magnetic resonance imaging, computerized axial tomography,
and ultrasound services;
(v)
Durable medical equipment and supplies;
(vi)
Parenteral and enteral nutrients equipment and supplies;
(vii)
Prosthetics, orthotics, and prosthetic devices;
(viii)
Home health services;
(ix)
Outpatient prescription drugs;
(x)
Inpatient and outpatient hospital services;
(xi)
Radiation therapy services and supplies.
(b)
For purposes of this subsection, "financial relationship" means the
relationship between a physician and an entity that includes either:
(i)
An ownership or investment interest; or
(ii)
A compensation arrangement.
For
purposes of this subsection, "compensation arrangement" means an
arrangement involving remuneration between a physician, or an immediate family
member of a physician, and an entity.
(c)
The department is authorized to adopt by rule amendments to 42 U.S.C. 1395 nn
enacted after the effective date of this act.
(d)
This section shall not apply in any case covered by a general exception
specified in 42 U.S.C. Sec. 1395 nn.
(4)
Subsections (1) and (2) of this section shall not apply to
(a) a
discount or other reduction in price obtained by a provider of services or
other entity under this chapter if the reduction in price is properly disclosed
and appropriately reflected in the costs claimed or charges made by the
provider or entity under this chapter, and
(b)
any amount paid by an employer to an employee (who has a bona fide employment
relationship with such employer) for employment in the provision of covered
items or services.
(((4)))
(5) Subsections (1) and (2) of this section, if applicable to the
conduct involved, shall supersede the criminal provisions of chapter 19.68 RCW,
but shall not preclude administrative proceedings authorized by chapter 19.68
RCW.
Sec.
2. RCW
18.64.011 and 1989 1st ex.s. c 9 s 412 are each amended to read as follows:
Unless
the context clearly requires otherwise, definitions of terms shall be as
indicated when used in this chapter.
(1)
"Person" means an individual, corporation, government, governmental
subdivision or agency, business trust, estate, trust, partnership or association,
or any other legal entity.
(2)
"Board" means the Washington state board of pharmacy.
(3)
"Drugs" means:
(a)
Articles recognized in the official United States pharmacopoeia or the official
homeopathic pharmacopoeia of the United States;
(b)
Substances intended for use in the diagnosis, cure, mitigation, treatment, or
prevention of disease in man or other animals;
(c)
Substances (other than food) intended to affect the structure or any function
of the body of man or other animals; or
(d)
Substances intended for use as a component of any substances specified in (a),
(b), or (c) of this subsection, but not including devices or their component
parts or accessories.
(4)
"Device" means instruments, apparatus, and contrivances, including
their components, parts, and accessories, intended (a) for use in the
diagnosis, cure, mitigation, treatment, or prevention of disease in man or
other animals, or (b) to affect the structure or any function of the body of
man or other animals.
(5)
"Nonlegend" or "nonprescription" drugs means any drugs
which may be lawfully sold without a prescription.
(6)
"Legend drugs" means any drugs which are required by any applicable
federal or state law or regulation to be dispensed on prescription only or are
restricted to use by practitioners only.
(7)
"Controlled substance" means a drug or substance, or an immediate
precursor of such drug or substance, so designated under or pursuant to the provisions
of chapter 69.50 RCW.
(8)
"Prescription" means an order for drugs or devices issued by a
practitioner duly authorized by law or rule in the state of Washington to
prescribe drugs or devices in the course of his or her professional practice
for a legitimate medical purpose.
(9)
"Practitioner" means a physician, dentist, veterinarian, nurse, or
other person duly authorized by law or rule in the state of Washington to
prescribe drugs.
(10)
"Pharmacist" means a person duly licensed by the Washington state
board of pharmacy to engage in the practice of pharmacy.
(11)
"Practice of pharmacy" includes the practice of and responsibility
for: Interpreting prescription orders; the compounding, dispensing, labeling,
administering, and distributing of drugs and devices; the monitoring of drug
therapy and use; the initiating or modifying of drug therapy in accordance with
written guidelines or protocols previously established and approved for his or
her practice by a practitioner authorized to prescribe drugs; the participating
in drug utilization reviews and drug product selection; the proper and safe
storing and distributing of drugs and devices and maintenance of proper records
thereof; the providing of information on legend drugs which may include, but is
not limited to, the advising of therapeutic values, hazards, and the uses of
drugs and devices.
(12)
"Pharmacy" means every place properly licensed by the board of
pharmacy where the practice of pharmacy is conducted.
(13)
The words "drug" and "devices" shall not include surgical
or dental instruments or laboratory materials, gas and oxygen, therapy
equipment, X-ray apparatus or therapeutic equipment, their component parts or
accessories, or equipment, instruments, apparatus, or contrivances used to render
such articles effective in medical, surgical, or dental treatment, or for use
or consumption in or for mechanical, industrial, manufacturing, or scientific
applications or purposes, nor shall the word "drug" include any
article or mixture covered by the Washington pesticide control act (chapter
15.58 RCW), as enacted or hereafter amended, nor medicated feed intended for
and used exclusively as a feed for animals other than man.
(14)
The word "poison" shall not include any article or mixture covered by
the Washington pesticide control act (chapter 15.58 RCW), as enacted or
hereafter amended.
(15)
"Deliver" or "delivery" means the actual, constructive, or
attempted transfer from one person to another of a drug or device, whether or
not there is an agency relationship.
(16)
"Dispense" means the interpretation of a prescription or order for a
drug, biological, or device and, pursuant to that prescription or order, the
proper selection, measuring, compounding, labeling, or packaging necessary to
prepare that prescription or order for delivery.
(17)
"Distribute" means the delivery of a drug or device other than by
administering or dispensing.
(18)
"Compounding" shall be the act of combining two or more ingredients
in the preparation of a prescription.
(19)
"Wholesaler" shall mean a corporation, individual, or other entity
which buys drugs or devices for resale and distribution to corporations,
individuals, or entities other than consumers.
(20)
"Manufacture" means the production, preparation, propagation, compounding,
or processing of a drug or other substance or device or the packaging or
repackaging of such substance or device, or the labeling or relabeling of the
commercial container of such substance or device, but does not include the
activities of a practitioner who, as an incident to his or her administration
or dispensing such substance or device in the course of his or her professional
practice, prepares, compounds, packages, or labels such substance or device.
(21)
"Manufacturer" shall mean a person, corporation, or other entity
engaged in the manufacture of drugs or devices.
(22)
"Labeling" shall mean the process of preparing and affixing a label
to any drug or device container. The label must include all information
required by current federal and state law and pharmacy rules.
(23)
"Administer" means the direct application of a drug or device,
whether by injection, inhalation, ingestion, or any other means, to the body of
a patient or research subject.
(24)
"Master license system" means the mechanism established by chapter
19.02 RCW by which master licenses, endorsed for individual state-issued
licenses, are issued and renewed utilizing a master application and a master
license expiration date common to each renewable license endorsement.
(25)
"Department" means the department of health.
(26)
"Secretary" means the secretary of health or the secretary's
designee.
(27)
"Health care entity" means an organization that provides health care
services in a setting that is not otherwise licensed by the state. Health care
entity includes a free-standing outpatient surgery center, a free-standing
cardiac care center, or a kidney dialysis center. It does not include an
individual practitioner's office or a multipractitioner clinic.
NEW
SECTION. Sec. 3. A new
section is added to chapter 18.64 RCW to read as follows:
(1) In
order for a health care entity to purchase, administer, dispense, and deliver
legend drugs, the health care entity must be licensed by the department.
(2) In
order for a health care entity to purchase, administer, dispense, and deliver
controlled substances, the health care entity must annually obtain a license
from the department in accordance with the board's rules.
(3)
The receipt, administration, dispensing, and delivery of legend drugs or
controlled substances by a health care entity must be performed under the
supervision or at the direction of a pharmacist.
(4) A
health care entity may only administer, dispense, or deliver legend drugs and
controlled substances to patients who receive care within the health care
entity and in compliance with rules of the board. Nothing in this subsection
shall prohibit a practitioner, in carrying out his or her licensed
responsibilities within a health care entity, from dispensing or delivering to
a patient of the health care entity drugs for that patient's personal use in an
amount not to exceed seventy-two hours of usage.
NEW
SECTION. Sec. 4. A new
section is added to chapter 18.64 RCW to read as follows:
(1)
The owner of a health care entity shall pay an original license fee to be
determined by the secretary, and annually thereafter, on or before a date to be
determined by the secretary, a fee to be determined by the secretary, for which
he or she shall receive a license of location, which shall entitle the owner to
purchase legend drugs or controlled substances at the location specified for
the period ending on a date to be determined by the secretary. A declaration
of ownership and location filed with the department under this section shall be
deemed presumptive evidence of ownership of the health care entity.
(2)
The owner shall immediately notify the department of any change of location or
ownership in which case a new application and fee shall be submitted.
(3) It
shall be the duty of the owner to keep the license of location or the renewal
license properly exhibited in the health care entity.
(4)
Failure to comply with this section is a misdemeanor and each day that the failure
continues is a separate offense.
(5) In
the event that a license fee remains unpaid after the date due, no renewal or
new license may be issued except upon payment of the license renewal fee and a
penalty fee equal to the original license fee.
Sec.
5. RCW
18.64.165 and 1989 1st ex.s. c 9 s 404 and 1989 c 352 s 4 are each reenacted
and amended to read as follows:
The
board shall have the power to refuse, suspend, or revoke the license of any
manufacturer, wholesaler, pharmacy, shopkeeper, itinerant vendor, peddler,
poison distributor, health care entity, or precursor chemical
distributor upon proof that:
(1)
The license was procured through fraud, misrepresentation, or deceit;
(2)
The licensee has violated or has permitted any employee to violate any of the
laws of this state or the United States relating to drugs, controlled
substances, cosmetics, or nonprescription drugs, or has violated any of the
rules and regulations of the board of pharmacy or has been convicted of a
felony.
NEW
SECTION. Sec. 6. A new
section is added to chapter 18.64 RCW to read as follows:
Every
proprietor or manager of a health care entity shall keep readily available a
suitable record of drugs, which shall preserve for a period of not less than
two years the record of every drug used at such health care entity. The record
shall be maintained either separately from all other records of the health care
entity or in such form that the information required is readily retrievable
from ordinary business records of the health care entity. All record-keeping
requirements for controlled substances must be complied with. Such record of
drugs shall be for confidential use in the health care entity, only. The
record of drugs shall be open for inspection by the board of pharmacy, who is
authorized to enforce chapter 18.64, 69.41, or 69.50 RCW.
Sec.
7. RCW
18.64.255 and 1984 c 153 s 14 are each amended to read as follows:
Nothing
in this chapter shall operate in any manner:
(1) To
restrict the scope of authorized practice of any practitioner other than a
pharmacist, duly licensed as such under the laws of this state. However, a
health care entity shall comply with all state and federal laws and rules
relating to the dispensing of drugs and the practice of pharmacy; or
(2) In
the absence of the pharmacist from the hospital pharmacy, to prohibit a
registered nurse designated by the hospital and the responsible pharmacist from
obtaining from the hospital pharmacy such drugs as are needed in an emergency:
PROVIDED, That proper record is kept of such emergency, including the date,
time, name of prescriber, the name of the nurse obtaining the drugs, and a list
of what drugs and quantities of same were obtained; or
(3)
To prevent shopkeepers, itinerant vendors, peddlers, or salesmen from dealing
in and selling nonprescription drugs, if such drugs are sold in the original
packages of the manufacturer, or in packages put up by a licensed pharmacist in
the manner provided by the state board of pharmacy, if such shopkeeper,
itinerant vendor, salesman, or peddler shall have obtained a registration.
