WILLIAM DONALD SCHAEFER, Governor                         Ch. 376

(b) A health care practitioner who has a beneficial interest in a cardiac
rehabilitation facility who entered into a written affiliation agreement for that facility on
or before December 30, 1988 provided that:

(1) The facility is staffed by hospital employees;

(2) The provision of services is consistent with the quality assurance policies
established by the hospital; and

(3) The cardiac rehabilitation facility does not expand beyond the number
of locations in existence in the State on January 1, 1993.

SECTION 4. 5. AND BE IT FURTHER ENACTED, That this Act shall take effect
October 1, 1993.

SECTION 4. AND BE IT FURTHER ENACTED, That, notwithstanding the
provisions of § 1-302 of the Health Occupations Article, a health care practitioner who as of
January 1, 1993 has a beneficial interest in or compensation arrangement with a health care
entity to which the health care practitioner makes referrals that are prohibited under § 1-302
of the Health Occupations Article shall have until March 15, 1997 to dispose of that beneficial
interest or compensation arrangement if the health care practitioner plans to continue to make
patient referrals to that health care entity after March 15, 1997. A health care practitioner who
makes referrals under this section between October 1, 1993 and March 15, 1997 shall comply
with the disclosure provisions of § 1-303(b) and be subject to the penalty provisions of §
1-303(d) of the Health Occupations Article.

SECTION 5. AND BE IT FURTHER ENACTED, That the Institute for
Governmental Service and the William Donald Schaefer Center for Public Policy shall jointly
conduct a study that evaluates the extent to which health care practitioners in Maryland have
beneficial interests in or compensation arrangements with health care entities to which they
make referrals of patients for health care services. The study shall also compare the frequency
of referral and the cost of services between practitioners who refer patients to entities in which
they have beneficial interests or with which they have compensation arrangements and the
frequency of referral and the cost of services of practitioners who do not have beneficial
interests in or compensation arrangements with the entities to which they make patient
referrals. The study should evaluate if the referral of patients by health care practitioners to
entities that they have beneficial interests in or compensation arrangements with results in
higher costs of health care and unnecessary utilization of health care services. The Institute for
Governmental Service and the William Donald Schaefer Center for Public Policy shall issue a
preliminary report, in accordance with § 2-1312 of the State Government Article, to the Senate
Economic and Environmental Affairs Committee and the House Environmental Matters
Committee on or before July 1, 1995 and issue a final report on or before December 31, 1995
on the findings of its study.

SECTION 6. AND BE IT FURTHER ENACTED, That this Act shall take effect
October 1, 1993.

Approved May 11, 1993.

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