Penalty for offering or receiving compensation to refer clients or patients?

• A. No penalty
• B. Civil penalty
• C. Felony
• D. Misdemeanor

Answer: (C)

Giving or receiving payment for referrals creates a harmful incentive that can distort patient care and undermine trust in the healthcare and insurance systems. California law treats kickbacks for referrals as a criminal offense, reflecting the seriousness of paying for or accepting referrals. Because this conduct involves fraud against patients and payers and poses a significant risk to public welfare, the penalties are criminal and classified as a felony, with potential prison time and substantial fines. Civil penalties can apply to other deceptive practices, but the anti-kickback nature of referrals elevates this offense to felony status.