Fee splitting violates the law
By Deborah Green, Esq.

Q: I have been approached by a marketing company to market my practice. The company has agreed to take a percentage of the amount of the new referrals. This sounds like a good business proposition. Is there a downside?

A: Unfortunately, what makes sense in the everyday business world does not always work in the healthcare world. The transaction you have outlined would result in fee splitting and would be in violation of the anti-kickback statute.

In order to avoid violating the law you need to comply with the following:

• The agreement between you and the marketing company must be in writing and signed by each of you and be for a period of at least one year;

• The agreement must specify the services the marketing company will provide;

• If the marketing company is to work on a periodic or part-time basis, the agreement must specifically state the marketing company’s schedule, the amount of time the company will devote to your particular project and the exact charge for such services;

• The aggregate compensation must be set in advance, must be consistent with fair market value and must not take into account the volume or value of any referrals or business generated by the marketing company for which payment is made in whole or in part under Medicare; and

• The services cannot involve the counseling or promotion of a business arrangement or other activity that violates any state or federal law.

If, on the other hand, you want to hire an employee to perform marketing services, you may pay this employee a percentage of referrals generated, but the employment arrangement must be legitimate.

Deborah Green is admitted to practice law in New York and Florida. If you have any questions concerning legal heathcare issues, please e-mail her at healthattorney@aol.com or fax her at 954-971-3787

DISCLAIMER This column is provided for educational purposes only. The accuracy or timeliness of the information presented is not warranted. The information presented is not as legal advice with respect to any matter and that no attorney-client relationship is hereby established.