There are many different types of businesses in Los Angeles and many refer clients to other companies in other industries. This is common practice and a way that people can help each other out. Generally, these referrals are of mutual benefit for each company and good way of generating business. However, the rules for doctors are different. They are concerns that allowing these types of kickbacks in medical field can have detrimental consequences for the health care industry in general.
Doctors are not allowed to either give any money or other types of gifts to people or organizations who refer them patients. They also are not allowed to accept any money or gifts from the other medical providers who they refer patients to. In addition to the referrals, it is also illegal to accept any money from drug or device companies for the devices they recommend to patients or the medications they prescribe. Doctors who do these things are subject to criminal penalties including jail time and fines.
Due to the fact that these actions are illegal, just like with any other type of crime, the proper authorities need to receive tips about it occurring so they can stop it. These tips oftentimes come from other employees within the clinic or hospital. However, the employees who provide the information may feel like they are risking their jobs for doing so. That is why employees who report these crimes are protected from whistleblower retaliation from their employers.
Doctors and hospitals are primarily in the business of providing health care to their patients. However, they are also trying to make money as well. They may break the law in order to receive more referrals or extra money for referring to other doctors. These are crimes and employees within the clinic may report these crimes to the proper authorities. If the doctors or clinics retaliate against the employees for doing so, they may be required to compensate the employee for all of their financial losses due to the retaliation. These can be very fact-specific cases though and consulting with an attorney could be beneficial.