Senate Bill 2438c1
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Florida Senate - 1999 CS for SB 2438
By the Committee on Health, Aging and Long-Term Care; and
Senator Latvala
317-2198-99
1 A bill to be entitled
2 An act relating to health care; amending s.
3 455.654, F.S.; providing definitions; providing
4 requirements for accepting outside referrals
5 for diagnostic imaging; providing for
6 disciplinary procedures against a group
7 practice or sole provider that accepts an
8 outside referral for diagnostic imaging
9 services in violation of such requirements;
10 providing a fine; requiring the Agency for
11 Health Care Administration to study issues
12 relating to quality care in providing
13 diagnostic imaging services; authorizing the
14 agency to convene a technical assistance panel;
15 requiring a report to the Governor and
16 Legislature; providing for registration of all
17 group practices; prescribing registration
18 information; authorizing group practices and
19 sole practitioners to accept a prescribed
20 percentage of their patients from outside
21 referrals for a specified time; requiring the
22 Agency for Health Care Administration in
23 conjunction with the Medicaid Fraud Unit of the
24 Office of the Attorney General to study certain
25 specified business activities and arrangements
26 of providers of clinical laboratory services
27 for kidney dialysis; requiring a report;
28 amending s. 4, ch. 98-192, Laws of Florida;
29 eliminating requirement that the agency receive
30 written confirmation from the federal Health
31 Care Financing Administration that amendments
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1 to ss. 395.701 and 395.7015, F.S., will not
2 adversely affect assessments or state match for
3 the state's Medicaid program; providing an
4 effective date.
5
6 Be It Enacted by the Legislature of the State of Florida:
7
8 Section 1. Section 455.654, Florida Statutes, 1998
9 Supplement, is amended to read:
10 455.654 Financial arrangements between referring
11 health care providers and providers of health care services.--
12 (1) SHORT TITLE.--This section may be cited as the
13 "Patient Self-Referral Act of 1992."
14 (2) LEGISLATIVE INTENT.--It is recognized by the
15 Legislature that the referral of a patient by a health care
16 provider to a provider of health care services in which the
17 referring health care provider has an investment interest
18 represents a potential conflict of interest. The Legislature
19 finds these referral practices may limit or eliminate
20 competitive alternatives in the health care services market,
21 may result in overutilization of health care services, may
22 increase costs to the health care system, and may adversely
23 affect the quality of health care. The Legislature also
24 recognizes, however, that it may be appropriate for providers
25 to own entities providing health care services, and to refer
26 patients to such entities, as long as certain safeguards are
27 present in the arrangement. It is the intent of the
28 Legislature to provide guidance to health care providers
29 regarding prohibited patient referrals between health care
30 providers and entities providing health care services and to
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1 protect the people of Florida from unnecessary and costly
2 health care expenditures.
3 (3) DEFINITIONS.--For the purpose of this section, the
4 word, phrase, or term:
5 (a) "Board" means any of the following boards relating
6 to the respective professions: the Board of Medicine as
7 created in s. 458.307; the Board of Osteopathic Medicine as
8 created in s. 459.004; the Board of Chiropractic Medicine as
9 created in s. 460.404; the Board of Podiatric Medicine as
10 created in s. 461.004; the Board of Optometry as created in s.
11 463.003; the Board of Pharmacy as created in s. 465.004; and
12 the Board of Dentistry as created in s. 466.004.
13 (b) "Comprehensive rehabilitation services" means
14 services that are provided by health care professionals
15 licensed under part I or part III of chapter 468 or chapter
16 486 to provide speech, occupational, or physical therapy
17 services on an outpatient or ambulatory basis.
18 (c) "Designated health services" means, for purposes
19 of this section, clinical laboratory services, physical
20 therapy services, comprehensive rehabilitative services,
21 diagnostic-imaging services, and radiation therapy services.
22 (d) "Diagnostic imaging services" means magnetic
23 resonance imaging, nuclear medicine, angiography,
24 arteriography, computed tomography, positron emission
25 tomography, digital vascular imaging, bronchography,
26 lymphangiography, splenography, ultrasound, EEG, EKG, nerve
27 conduction studies, and evoked potentials.
28 (e) "Direct supervision" means supervision by a
29 physician who is present in the office suite and immediately
30 available to provide assistance and direction throughout the
31 time services are being performed.
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1 (f)(d) "Entity" means any individual, partnership,
2 firm, corporation, or other business entity.
3 (g)(e) "Fair market value" means value in arms length
4 transactions, consistent with the general market value, and,
5 with respect to rentals or leases, the value of rental
6 property for general commercial purposes, not taking into
7 account its intended use, and, in the case of a lease of
8 space, not adjusted to reflect the additional value the
9 prospective lessee or lessor would attribute to the proximity
10 or convenience to the lessor where the lessor is a potential
11 source of patient referrals to the lessee.
12 (h)(f) "Group practice" means a group of two or more
13 health care providers legally organized as a partnership,
14 professional corporation, or similar association:
15 1. In which each health care provider who is a member
16 of the group provides substantially the full range of services
17 which the health care provider routinely provides, including
18 medical care, consultation, diagnosis, or treatment, through
19 the joint use of shared office space, facilities, equipment,
20 and personnel;
21 2. For which substantially all of the services of the
22 health care providers who are members of the group are
23 provided through the group and are billed in the name of the
24 group and amounts so received are treated as receipts of the
25 group; and
26 3. In which the overhead expenses of and the income
27 from the practice are distributed in accordance with methods
28 previously determined by members of the group.
29 (i)(g) "Health care provider" means any physician
30 licensed under chapter 458, chapter 459, chapter 460, or
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1 chapter 461, or any health care provider licensed under
2 chapter 463 or chapter 466.
3 (j)(h) "Immediate family member" means a health care
4 provider's spouse, child, child's spouse, grandchild,
5 grandchild's spouse, parent, parent-in-law, or sibling.
6 (k)(i) "Investment interest" means an equity or debt
7 security issued by an entity, including, without limitation,
8 shares of stock in a corporation, units or other interests in
9 a partnership, bonds, debentures, notes, or other equity
10 interests or debt instruments. The following investment
11 interests shall be excepted from this definition:
12 1. An investment interest in an entity that is the
13 sole provider of designated health services in a rural area;
14 2. An investment interest in notes, bonds, debentures,
15 or other debt instruments issued by an entity which provides
16 designated health services, as an integral part of a plan by
17 such entity to acquire such investor's equity investment
18 interest in the entity, provided that the interest rate is
19 consistent with fair market value, and that the maturity date
20 of the notes, bonds, debentures, or other debt instruments
21 issued by the entity to the investor is not later than October
22 1, 1996.
23 3. An investment interest in real property resulting
24 in a landlord-tenant relationship between the health care
25 provider and the entity in which the equity interest is held,
26 unless the rent is determined, in whole or in part, by the
27 business volume or profitability of the tenant or exceeds fair
28 market value; or
29 4. An investment interest in an entity which owns or
30 leases and operates a hospital licensed under chapter 395 or a
31 nursing home facility licensed under chapter 400.
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1 (l)(j) "Investor" means a person or entity owning a
2 legal or beneficial ownership or investment interest, directly
3 or indirectly, including, without limitation, through an
4 immediate family member, trust, or another entity related to
5 the investor within the meaning of 42 C.F.R. s. 413.17, in an
6 entity.
7 (m) "Outside referral for diagnostic imaging services"
8 means a referral of a patient to a group practice or sole
9 provider for diagnostic imaging services by a physician who is
10 not a member of the group practice or of the sole provider's
11 practice and who does not have an investment interest in the
12 group practice or sole provider's practice, for which the
13 group practice or sole provider billed for both the technical
14 and the professional fee for the patient, and the patient did
15 not become a patient of your group practice or sole provider's
16 practice.
17 (n) "Patient of a group practice" or "patient of a
18 sole provider" means a patient who receives a physical
19 examination, evaluation, diagnosis, and development of a
20 treatment plan if medically necessary by a physician who is a
21 member of the group practice or the sole practitioner's
22 practice.
23 (o)(k) "Referral" means any referral of a patient by a
24 health care provider for health care services, including,
25 without limitation:
26 1. The forwarding of a patient by a health care
27 provider to another health care provider or to an entity which
28 provides or supplies designated health services or any other
29 health care item or service; or
30 2. The request or establishment of a plan of care by a
31 health care provider, which includes the provision of
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1 designated health services or other health care item or
2 service.
3 3. The following orders, recommendations, or plans of
4 care shall not constitute a referral by a health care
5 provider:
6 a. By a radiologist for diagnostic-imaging services.
7 b. By a physician specializing in the provision of
8 radiation therapy services for such services.
9 c. By a medical oncologist for drugs and solutions to
10 be prepared and administered intravenously to such
11 oncologist's patient, as well as for the supplies and
12 equipment used in connection therewith to treat such patient
13 for cancer and the complications thereof.
14 d. By a cardiologist for cardiac catheterization
15 services.
16 e. By a pathologist for diagnostic clinical laboratory
17 tests and pathological examination services, if furnished by
18 or under the supervision of such pathologist pursuant to a
19 consultation requested by another physician.
20 f. By a health care provider who is the sole provider
21 or member of a group practice for designated health services
22 or other health care items or services that are prescribed or
23 provided solely for such referring health care provider's or
24 group practice's own patients, and that are provided or
25 performed by or under the direct supervision of such referring
26 health care provider or group practice; provided, however,
27 that effective July 1, 1999, a physician licensed pursuant to
28 chapter 458, chapter 459, chapter 460, or chapter 461 may
29 refer a patient to a sole practitioner or group practice for
30 diagnostic imaging services, excluding radiation therapy
31 services, for which the sole practitioner or group practice
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1 billed both the technical and the professional fee for or on
2 behalf of the patient, if the referring physician has no
3 investment interest in the practice. The group practice or
4 sole practitioner may accept no more than 15 percent of their
5 patients receiving diagnostic imaging services from outside
6 referrals, excluding radiation therapy services.
7 g. By a health care provider for services provided by
8 an ambulatory surgical center licensed under chapter 395.
9 h. By a health care provider for diagnostic clinical
10 laboratory services where such services are directly related
11 to renal dialysis.
12 i. By a urologist for lithotripsy services.
13 j. By a dentist for dental services performed by an
14 employee of or health care provider who is an independent
15 contractor with the dentist or group practice of which the
16 dentist is a member.
17 k. By a physician for infusion therapy services to a
18 patient of that physician or a member of that physician's
19 group practice.
20 l. By a nephrologist for renal dialysis services and
21 supplies.
22 (p) "Present in the office suite" means that the
23 physician is actually physically present; provided, however,
24 that the health care provider is considered physically present
25 during brief unexpected absences as well as during routine
26 absences of a short duration if the absences occur during time
27 periods in which the health care provider is otherwise
28 scheduled and ordinarily expected to be present and the
29 absences do not conflict with any other requirement in the
30 Medicare program for a particular level of health care
31 provider supervision.
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1 (q)(l) "Rural area" means a county with a population
2 density of no greater than 100 persons per square mile, as
3 defined by the United States Census.
4 (r) "Sole provider" means a health care provider
5 licensed under chapter 458, chapter 459, chapter 460, or
6 chapter 461, who maintains a medical practice separate from
7 any other health care provider and who bills for his or her
8 services separately from the services provided by any other
9 health care provider.
10 (4) REQUIREMENT FOR ACCEPTING OUTSIDE REFERRALS FOR
11 DIAGNOSTIC IMAGING.--
12 (a) A group practice or sole practitioner accepting
13 outside referrals for diagnostic imaging services is required
14 to comply with the following conditions:
15 1. Diagnostic imaging services must be provided
16 exclusively by a group practice physician or by a full-time or
17 part-time employee of the group practice or of the sole
18 provider's practice.
19 2. All equity in the group practice or sole provider's
20 practice accepting outside referrals for diagnostic imaging
21 must be held by the physicians comprising the group practice
22 or the sole provider's practice, each of which must provide at
23 least 75 percent of his professional services to the group.
24 3. The group practice or sole provider accepting
25 outside referrals for diagnostic imaging may not be managed by
26 the same entity or any related entity that either owns,
27 manages, or otherwise has any interest in the group practice
28 or sole provider referring the patient.
29 4. The group practice or sole provider accepting
30 outside referrals for diagnostic imaging services must bill
31 for both the professional and technical component of the
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1 service on behalf of the patient and no portion of the
2 payment, or any type of consideration, either directly or
3 indirectly, may be shared with the referring physician.
4 5. Group practices or sole providers that have a
5 Medicaid provider agreement with the Agency for Health Care
6 Administration must furnish diagnostic imaging services to
7 their Medicaid patients and may not refer a Medicaid recipient
8 to a hospital for outpatient diagnostic imaging services
9 unless the physician furnishes the hospital with documentation
10 demonstrating the medical necessity for such a referral.
11 6. All group practices and sole practitioners
12 accepting outside referrals for diagnostic imaging shall
13 report annually to the Agency for Health Care Administration
14 providing the number of outside referrals accepted for
15 diagnostic imaging services and the total number of all
16 patients receiving diagnostic imaging services.
17 (b) If a group practice or sole provider accepts an
18 outside referral for diagnostic imaging services in violation
19 of this subsection or if a group practice or sole provider
20 accepts outside referrals for diagnostic imaging services in
21 excess of the percentage limitation established in
22 subparagraph (a)2. of this subsection, the group practice or
23 the sole provider shall be subject to the penalties in
24 subsection (5).
25 (5)(4) PROHIBITED REFERRALS AND CLAIMS FOR
26 PAYMENT.--Except as provided in this section:
27 (a) A health care provider may not refer a patient for
28 the provision of designated health services to an entity in
29 which the health care provider is an investor or has an
30 investment interest.
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1 (b) A health care provider may not refer a patient for
2 the provision of any other health care item or service to an
3 entity in which the health care provider is an investor
4 unless:
5 1. The provider's investment interest is in registered
6 securities purchased on a national exchange or
7 over-the-counter market and issued by a publicly held
8 corporation:
9 a. Whose shares are traded on a national exchange or
10 on the over-the-counter market; and
11 b. Whose total assets at the end of the corporation's
12 most recent fiscal quarter exceeded $50 million; or
13 2. With respect to an entity other than a publicly
14 held corporation described in subparagraph 1., and a referring
15 provider's investment interest in such entity, each of the
16 following requirements are met:
17 a. No more than 50 percent of the value of the
18 investment interests are held by investors who are in a
19 position to make referrals to the entity.
20 b. The terms under which an investment interest is
21 offered to an investor who is in a position to make referrals
22 to the entity are no different from the terms offered to
23 investors who are not in a position to make such referrals.
24 c. The terms under which an investment interest is
25 offered to an investor who is in a position to make referrals
26 to the entity are not related to the previous or expected
27 volume of referrals from that investor to the entity.
28 d. There is no requirement that an investor make
29 referrals or be in a position to make referrals to the entity
30 as a condition for becoming or remaining an investor.
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1 3. With respect to either such entity or publicly held
2 corporation:
3 a. The entity or corporation does not loan funds to or
4 guarantee a loan for an investor who is in a position to make
5 referrals to the entity or corporation if the investor uses
6 any part of such loan to obtain the investment interest.
7 b. The amount distributed to an investor representing
8 a return on the investment interest is directly proportional
9 to the amount of the capital investment, including the fair
10 market value of any preoperational services rendered, invested
11 in the entity or corporation by that investor.
12 4. Each board and, in the case of hospitals, the
13 Agency for Health Care Administration, shall encourage the use
14 by licensees of the declaratory statement procedure to
15 determine the applicability of this section or any rule
16 adopted pursuant to this section as it applies solely to the
17 licensee. Boards shall submit to the Agency for Health Care
18 Administration the name of any entity in which a provider
19 investment interest has been approved pursuant to this
20 section, and the Agency for Health Care Administration shall
21 adopt rules providing for periodic quality assurance and
22 utilization review of such entities.
23 (c) No claim for payment may be presented by an entity
24 to any individual, third-party payor, or other entity for a
25 service furnished pursuant to a referral prohibited under this
26 section.
27 (d) If an entity collects any amount that was billed
28 in violation of this section, the entity shall refund such
29 amount on a timely basis to the payor or individual, whichever
30 is applicable.
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1 (e) Any person that presents or causes to be presented
2 a bill or a claim for service that such person knows or should
3 know is for a service for which payment may not be made under
4 paragraph (c), or for which a refund has not been made under
5 paragraph (d), shall be subject to a civil penalty of not more
6 than $15,000 for each such service to be imposed and collected
7 by the appropriate board.
8 (f) Any health care provider or other entity that
9 enters into an arrangement or scheme, such as a cross-referral
10 arrangement, which the physician or entity knows or should
11 know has a principal purpose of assuring referrals by the
12 physician to a particular entity which, if the physician
13 directly made referrals to such entity, would be in violation
14 of this section, shall be subject to a civil penalty of not
15 more than $100,000 for each such circumvention arrangement or
16 scheme to be imposed and collected by the appropriate board.
17 (g) A violation of this section by a health care
18 provider shall constitute grounds for disciplinary action to
19 be taken by the applicable board pursuant to s. 458.331(2), s.
20 459.015(2), s. 460.413(2), s. 461.013(2), s. 463.016(2), or s.
21 466.028(2). Any hospital licensed under chapter 395 found in
22 violation of this section shall be subject to the rules
23 adopted by the Agency for Health Care Administration pursuant
24 to s. 395.0185(2).
25 (h) Any hospital licensed under chapter 395 that
26 discriminates against or otherwise penalizes a health care
27 provider for compliance with this act.
28 (i) The provision of paragraph (a) shall not apply to
29 referrals to the offices of radiation therapy centers managed
30 by an entity or subsidiary or general partner thereof, which
31 performed radiation therapy services at those same offices
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1 prior to April 1, 1991, and shall not apply also to referrals
2 for radiation therapy to be performed at no more than one
3 additional office of any entity qualifying for the foregoing
4 exception which, prior to February 1, 1992, had a binding
5 purchase contract on and a nonrefundable deposit paid for a
6 linear accelerator to be used at the additional office. The
7 physical site of the radiation treatment centers affected by
8 this provision may be relocated as a result of the following
9 factors: acts of God; fire; strike; accident; war; eminent
10 domain actions by any governmental body; or refusal by the
11 lessor to renew a lease. A relocation for the foregoing
12 reasons is limited to relocation of an existing facility to a
13 replacement location within the county of the existing
14 facility upon written notification to the Office of Licensure
15 and Certification.
16 (j) A health care provider who meets the requirements
17 of paragraphs (b) and (i) must disclose his or her investment
18 interest to his or her patients as provided in s. 455.701.
19 Section 2. (1) The Agency for Health Care
20 Administration is directed to study issues relating to the
21 need for quality-of-care standards applicable to group
22 practices, hospitals, and health systems providing diagnostic
23 imaging services. Issues to be addressed in the scope of this
24 study include, but are not limited to:
25 (a) The parameters of quality of care;
26 (b) The need for periodic inspection of the facilities
27 or the entities providing diagnostic imaging services for the
28 purpose of evaluation of the premises, operation, supervision,
29 and procedures of the entity;
30 (c) The extent to which requiring group practices
31 providing diagnostic imaging services to participate in
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1 nationally recognized accrediting organizations would enhance
2 quality assurance processes; and
3 (d) An assessment of how group practices, hospitals,
4 and health systems providing diagnostic imaging services
5 ensure appropriate utilization of services in order to prevent
6 overutilization of these services.
7 (2) The agency may convene a technical assistance
8 panel for purposes of this study which is representative of
9 group practices providing diagnostic imaging services, group
10 practices, group practices generally, various professional
11 organizations representing providers and hospitals, and
12 representatives of the public.
13 (3) The agency shall submit its findings and
14 recommendations to the Governor, the President of the Senate,
15 and the Speaker of the House of Representatives by January 15,
16 2000.
17 Section 3. The agency shall require registration by
18 all group practices providing diagnostic imaging services,
19 regardless of ownership. Registration information must include
20 the medical specialty of each physician; address and phone
21 number of the group; UPIN number for the group and each group
22 number; and Medicare, Medicaid, and commercial billing numbers
23 for the group. The agency shall complete the registration by
24 December 31, 1999.
25 Section 4. Notwithstanding the provisions of section
26 455.564, Florida Statutes, 1998 Supplement, upon such time as
27 the Agency for Health Care Administration adopts and
28 implements rules recommended by the study, group practices and
29 sole practitioners may accept up to 25 percent of their
30 patients from outside referrals for diagnostic imaging.
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1 Section 5. The Agency for Health Care Administration,
2 in conjunction with the Medicaid Fraud Division of the Office
3 of the Attorney General, shall conduct a detailed study and
4 analysis of clinical laboratory services for kidney dialysis
5 patients in the State of Florida. The study shall include, but
6 not be limited to, an analysis of the past and present
7 utilization rates of clinical laboratory services for dialysis
8 patients; financial arrangements among kidney dialysis
9 centers, their medical directors, any business relationships
10 and affiliations with clinical laboratories, and any
11 self-referral to clinical laboratories; the quality and
12 responsiveness of clinical laboratory services for dialysis
13 patients in Florida; and the average annual revenue for
14 dialysis patients for clinical laboratory services for the
15 past 10 years. The agency shall report its findings to the
16 Legislature by February 1, 2000.
17 Section 6. Section 4 of chapter 98-192, Laws of
18 Florida, is amended to read:
19 Section 4. This act shall take effect July 1, 1998,
20 except that the amendment of sections 395.701 and 395.7015,
21 Florida Statutes, by this act shall take effect only upon the
22 Agency for Health Care Administration receiving written
23 confirmation from the federal Health Care Financing
24 Administration that the changes contained in such amendments
25 will not adversely affect the use of the remaining assessments
26 as state match for the state's Medicaid program.
27 Section 7. This act shall take effect July 1, 1999.
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1 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
2 Senate Bill 2438
3
4 The bill amends the Patient Self-Referral Act of 1992 to
provide requirements for a sole practitioner or a group
5 practice to accept outside referrals for diagnostic imaging
services, defines additional terms used in the Act, and
6 revises the definition of the term "referral" to allow an
exception to the group practice exception to prohibited
7 referrals under the Act for acceptance of referrals for
diagnostic imaging services. It authorizes group practices and
8 sole practitioners to accept up to 15 percent of their
patients from outside referrals for diagnostic imaging
9 services, effective July 1, 1999, and up to 25 percent of
their patients for such services once the Agency for Health
10 Care Administration adopts and implements rules recommended by
a study the Agency must submit by January 15, 2000. Group
11 practices providing diagnostic imaging services must be
registered with the Agency by December 31, 1999, regardless of
12 who owns the group practice.
13 The bill directs the Agency to study the need for
quality-of-care standards applicable to group practices,
14 hospitals, and health systems that provide diagnostic imaging
services, addressing certain specified issues, and submit its
15 findings and recommendations by January 15, 2000. The Agency,
is also required, in conjunction with the Medicaid Fraud
16 Division of the Office of the Attorney General, to conduct a
detailed study and analysis of clinical laboratory services
17 for kidney dialysis patients. The Agency must submit a report
of its findings to the Legislature by February 1, 2000.
18
The contingency in the effective date of legislation enacted
19 during the 1998 legislative Session that repealed the Public
Medical Assistance Trust Fund assessment on freestanding
20 radiation therapy centers and exempted hospital outpatient
radiation therapy centers from the same assessment is deleted
21 from law.
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