What does New York law say about the division of medical fees?
Generally, New York law prohibits the division of fees in the practice of medicine. This prohibition applies to both corporate and individual settings. Specifically, section 4501 (1) of the New York Public Health Law expressly prohibits both businesses and individual professionals from practicing medicine for profit in a manner that includes “the referral or recommendation of persons to a physician, dentist, hospital, health center or dispensary for any form of medical or dental care or treatment of any ailment or physical condition “. Physicians and other health care professionals and facilities are also prohibited by law from “accepting for medical or dental care or treatment any person referred or recommended for such care or treatment by a medical or dental referral service company located or conducting business. in another state if the medical or dental referral services business would be prohibited … if the business were located or operated in New York. ” Simply put, giving or accepting patient referral fees is prohibited.
Does the law make any distinction between individual and corporate medical practice when it comes to fee sharing?
In New York, businesses and nonprofits cannot practice medicine per se unless they are certified by the Public Health Council. Therefore, any New York physician who shares or allows others to share the fees for medical services with a business entity will be penalized pursuant to section 6530 (19) of the New York Education Law. Illegal fee sharing involving business entities can take many forms. For example, in a recent case, the court held that the payment of a portion of the earnings of physicians from their private clinical practice to a university as a condition for the employment of physicians at the university was an illegal fee-sharing arrangement. where the physicians were not employed by the university’s faculty practice corporation, and the university was not providing physicians with salary, employee benefits, facilities, supplies, personnel, or malpractice insurance. (Odrich v. Trs. Of Columbia Univ.) Illegal fare splitting does not always involve money payments. Give or receive any valuable benefits such as credit, omission, discount, gratuity, etc. may qualify as a shared quota.
So what is business practice of medicine or illegal fee splitting?
As an example, several short cases demonstrate the business practice of medicine and the illegal splitting of fees. In one case, a doctor reached an agreement with his technicians that the technicians would perform EEG and ECHO tests and that the doctor would pay them 50 percent of the fees for the tests. In another case, a corporation hired doctors and provided them with office space and equipment in exchange for a percentage of their income. Another example is that of a physician whose license was suspended for paying referral fees to a women’s health center that had been referring patients for abortions.
There are exceptions?
Yes. The law allows physicians to practice medicine and share fees through associations, professional corporations, college faculty practice plans, hospitals, HMOs, and employee / student health programs. While permitted, such arrangements are subject to limitations. For example, a doctor who is not a member of a society cannot share the fees with the society.
What about the payment of wages to employees?
Paying salaries to employees is not an illegal distribution of fees unless the salaries depend on the physician’s income and represent a certain percentage of the income. Sharing of fees with another physician is allowed under certain circumstances, such as a professional consultant or subcontractor.
Is it a problem for a doctor to use a billing company or collection agency?
That depends on the type of agreement between the doctor and the billing company. By default, many billing companies prefer a contingency-based model in which they charge the physician a percentage of the physician’s income. While permissible for billing companies, this practice is a safe form of professional discipline for the physician. The correct way would be to agree on a fixed rate that represents the fair market value of the services. However, this is different with collection agencies. Paying collection agencies on a contingency basis depending on the amount recovered is not an illegal sharing of fees.
What are the legal consequences of violating fee sharing laws and the business practice of medicine?
In the latter case, since companies cannot practice medicine, such practice is considered “unlicensed practice of medicine”, which is a class E felony. If convicted, the defendant can serve between one and four years in prison and incur monetary penalties. The entity itself will dissolve. Physicians who contract with unlicensed commercial entities may be charged with the fraudulent practice of medicine or practicing beyond the authorized scope and subject to professional discipline. Illegal fee sharing is professional misconduct and any physician found to have violated the fee sharing rules will be penalized.