The California medical field has made the news in the last few years for physicians and pharmacists accepting kickbacks. As a medical professional, you may wonder if kickbacks are illegal and how they affect private practices. Here is what you need to know before accepting one.

The California Business and Professions Code Section 650 states that inducements or kickbacks are unlawful. Kickbacks refer to the acceptance of proprietary interest, compensation in any form or co-ownership to refer clients, customers or patients to a particular company. However, if the company provides you with a payment for something other than referring patients, it is not illegal if the value of the payment matches that of the rendered services.

Federal law does permit some payments to help your practice offer better health services or meet the medical needs of underserved people. These payments may come in the form of items, loans, goods, donations or services. You can refer patients to specific clinics, health care facilities, laboratories or pharmacies that you have partial ownership or proprietary interest in as long as the payments match the investment you made in the business.

You can receive nonmonetary benefits from companies such as information technology, hardware, training services or software. Should you violate the law, you can spend up to one year in county jail or up to a $50,000 fine. Some public offenders may face both fines and jail time depending on the case.

A second offense can face both a steep $50,000 fine and imprisonment. This information is intended only to educate and should not be interpreted as legal advice.