| What does New York Law Say About Medical Fee | | | | the doctor would pay them 50 percent of the fees |
| Splitting? | | | | for the tests. In another case, a corporation |
| Generally, New York law bans fee splitting in the | | | | employed doctors and provided them with office |
| practice of medicine. This prohibition applies to both | | | | space and equipment in exchange for a percentage |
| corporate and individual settings. Specifically, New | | | | of their income. Another example is one of a |
| York Public Health Law section 4501(1) expressly | | | | physician who had his license suspended for paying |
| forbids both businesses and individual practitioners to | | | | referral fees to a women's health center that had |
| practice medicine for profit in a manner that includes | | | | been referring to him patients for abortions. |
| "the referral or recommendation of persons to a | | | | Are there any exceptions? |
| physician, dentist, hospital, health related facility, or | | | | Yes. The law permits physicians to practice medicine |
| dispensary for any form of medical or dental care or | | | | and share fees through partnerships, professional |
| treatment of any ailment or physical condition." The | | | | corporations, university faculty practice plans, |
| law also prohibits physicians and other health care | | | | hospitals, HMOs, and employee/student health |
| professionals and facilities "to accept for medical or | | | | programs. While permitted, such arrangements are |
| dental care or treatment any person referred or | | | | subject to limitations. For example, a physician who is |
| recommended for such care or treatment by a | | | | not a member of a partnership may not share fees |
| medical or dental referral service business located in | | | | with the partnership. |
| or doing business in another state if the medical or | | | | What about paying salaries to employees? |
| dental referral service business would be | | | | Paying salaries to employees is not illegal fee sharing |
| prohibited… if the business were located in or doing | | | | unless the salaries are contingent on the physician's |
| business in New York." In simple words, it is | | | | income and are a certain percentage of the income. |
| prohibited to give or accept fees for patient referrals. | | | | Fee sharing with another physician is permitted under |
| Does the law make any distinction between individual | | | | certain circumstances, such as in the case with a |
| and corporate practice of medicine when it comes to | | | | consultant or professional subcontractor. |
| sharing fees? | | | | Is it a problem for a physician to employ a billing |
| In New York, businesses and non-profits | | | | company or a collection agency? |
| organizations are not allowed to practice medicine per | | | | That depends on the type of the agreement |
| se unless they are so certified by the Public Health | | | | between the physician and the billing company. By |
| Council. Therefore, any New York physician who | | | | default, many billing businesses prefer a |
| shares or allows others to share in the fees for | | | | contingency-based model where they charge the |
| medical services with a business entity will be | | | | doctor a percentage of the doctor's income. While |
| disciplined under NY Education Law section 6530(19). | | | | permissible for the billing companies, such practice is a |
| Illegal fee-sharing involving business entities may take | | | | sure way to professional discipline for the physician. |
| many forms. For example, in a recent case, the court | | | | The right way would be to arrange for a fixed rate |
| held that payment of a portion of physicians' income | | | | representing fair market value of the services. |
| from their private clinic practice to a university as a | | | | However, this is different with the collections |
| condition of the physicians' employment with the | | | | agencies. Paying collections agencies on a contingency |
| university was an illegal fee-splitting arrangement | | | | basis depending on the amount recovered is not illegal |
| where the physicians were not employees of the | | | | fee-splitting. |
| university faculty practice corporation, and the | | | | What are the legal consequences of violating the |
| university was not providing the physicians with | | | | fee-splitting laws and corporate practice of medicine? |
| salary, employee benefits, facilities, supplies, staff, or | | | | In the latter case, since businesses are not allowed |
| malpractice insurance. (Odrich v Trs. of Columbia | | | | to practice medicine, such practice is considered |
| Univ.) Illegal fee-splitting does not always involve | | | | "unlicensed practice of medicine", which is a class E |
| money payments. Giving or receiving any valuable | | | | felony. If convicted, the defendant may serve |
| benefit such as credit, omission, discount, gratuity, | | | | between one to four years in prison and incur |
| etc. may qualify as fee sharing. | | | | monetary penalties. The entity itself will be dissolved. |
| So what is corporate practice of medicine or illegal | | | | Physicians who enter into contracts with unlicensed |
| fee splitting? | | | | business entities may be charged with fraudulent |
| By way of example, several court cases | | | | practice of medicine or practicing beyond authorized |
| demonstrate corporate practice of medicine and illegal | | | | scope and be subjected to professional discipline. |
| fee splitting. In one case, a doctor entered into an | | | | Illegal fee-splitting is a professional misconduct and |
| agreement with his technicians that provided that the | | | | any physician found to have violated the fee sharing |
| technicians would perform EEG and ECHO tests and | | | | rules will be disciplined. |