Caveat emptor: Choose the right personal injury referral service

Personal injury referral services and counting the percentages

MOST PRACTICES “CRAVE” PERSONAL INJURY CASES, typically because they pay better. Me, I enjoy treating trauma cases because it interests me more.

No matter your motivation, you need to be an expert at whatever type of case you manage. In the quest to get new cases, doctors have a choice: to learn how to get personal injury referral sources to run after them and refer, or to retain marketing companies to send them cases. 

Personal sources vs. third-party marketing sources

The former scenario of getting referral sources to run after you is a time-proven success story that typically persists for your career with no liability. It requires initial planning, preparation and perpetual continuing education (you must do it anyway) focused on trauma care.  

However, the latter of hiring a marketing company can leave you with significant liability. First, many ethical marketing companies do it right, and the focus of this article is how to ferret out the good from the “potentially” bad. 

When using a third party to market your practice, they are representing you with websites, handouts and assurances of documentation and services. You must do a “deep dive” into everything they do and say.  

What is worse than not getting a referral? It is to get that referral, the source realizing they were promised a “false bill of goods,” and you permanently become a “one and done.” Your reputation will possibly forever be tarnished, and don’t lose sight that lawyers, MDs and other referral sources all talk to each other.  

They rarely share good stories because they want you to themselves, but they always share the negative, placing themselves as your victim and warning others not to work with you. I have witnessed this all too often. Be careful what is being promised.  

Giving up a percentage

My biggest issue is when a referral source demands a percentage of your collections in exchange for referrals. This could include doing your billing or having liens go through them so they control what you get.  

The percentage is hidden in a myriad of services provided to “back into” their percentage (fee). Let’s start with math and business. If a company wants 50% of your fee, a DC’s overhead is typically 50% or higher before taxes. Once you factor in your overhead, you are losing money. Add in the lawyer wanting to reduce your fee on top of the marketing company taking a percentage. Most relationships have you even, at best, or upside-down financially. The math, although typically bad business on your side, is the least of the issues.  

Fee splitting or percentage contracts

The most significant exposure is fee splitting or percentage-based contracts that can carry legal, financial and licensure issues.  

A company with percentage-based fees often tells you they are charging for their services, which is a flat rate for all cases. They also tell you they want to control the billing or liens and will pay you the balance after they take their fees. Most companies give you a contract that is done by their lawyers to save you legal fees.  

Too many doctors are naïve and accept all of the above. How do I know? Because I am the person too many call to ask how they get out of the trouble they are in with these scenarios. First, I am not a lawyer and do not pretend to know the laws in any state well enough to guide a doctor, and my immediate recommendation to these doctors is to hire a criminal defense lawyer.  

It is my experience dealing with health care lawyers that no matter how a company attempts to disguise a hard percentage for services, it can be construed as fee-splitting or a kickback. Even if I am wrong, the carriers will investigate.  

I have been told by “insurance industry insiders” that they have profiles on many of the companies in percentage relationships and, over time, aggregate statistics to create suits against them and the doctors they take money from. At the very least, a hard rule is to have a health care lawyer retained by you to give you an opinion in writing about the legality of the relationship. Not a personal injury lawyer, general lawyer, corporate lawyer or any other type of lawyer. You need a lawyer specializing in health care who fully understands the Stark-Anti-Kickback rules most states follow.  

You also must insist on a written opinion from the lawyer because if they are wrong, you can always sue them for malpractice and protect your family from permanent financial ruin. Also, because you used an officer of the court, it might lessen the charges against you from a legal perspective should you be found guilty. 

Avoid paying percentages

I have consulted doctors in 49 states, and my “stock” answer is never to enter into a relationship where you pay a percentage for referrals – ever. The downside is too big, and the upside isn’t worth the exposure.  

As I previously said, the single best marketing tool is to get referral sources to run after you based on your clinical excellence. A marketing company should focus on just that without being inflammatory in trying to make you more than you are ― and then you shouldn’t have any issues.  

MARK STUDIN, DC, is an adjunct associate professor of chiropractic at the University of Bridgeport, College of Chiropractic; adjunct professor at Cleveland University – Kansas City, College of Chiropractic; and adjunct professor of Clinical Sciences at Texas Chiropractic College. He is the president of the Academy of Chiropractic, teaching doctors of chiropractic and interfacing with the medical and legal communities (DoctorsPIprogram.com). He can be reached at DrMark@AcademyOfChiropractic.com or at 631-786-4253.