Massachusetts’ 2015 budget bill, signed into law on July 14, included a broad prohibition on referrals by physicians to clinical laboratories in which they or their family members have direct or indirect ownership interests. The prohibition was originally proposed by, and may be enforced by, the Attorney General’s office. Civil or criminal penalties and other damages are possible. 

The bill’s provisions prohibit both the referral of a specimen to a clinical laboratory in which the referrer has an ownership interest, and a lab’s solicitation or acceptance of a specimen that is received from or referred by either 1- a person or company in which the lab or any of its directors, owners, partners, employees, or any of their family members has an ownership interest, or 2- a person or company (or any of its directors, owners, partners, employees, or family members) that has an ownership interest in the lab.

Both of these provisions include exceptions for a clinical lab owned by a physician or group practice and used exclusively for its own patients, as long as all testing is performed or supervised by the physician or group; a lab owned by a hospital or clinic and used exclusively for its own patients; or any arrangement that satisfies an exception to the federal physician self-referral law (the “Stark Law”). The latter exception will permit physicians to continue referring specimens to their own in-office labs.

Massachusetts clinical laboratories are now required to report ownership interests to the Department of Public Health every two years, with a copy of the report to the Attorney General’s Office. Failure to report may result in a fine of up to $5,000.