Here is where MOST people get confused. It is not illegal to charge a provider based on a percentage of collections, however it is illegal for a provider in a state where fee-splitting is illegal to enter into ANY fee-splitting type arrangement. A percentage of Anything (billed or collected) is fee-splitting. Using again Florida as an example:
"paying or receiving any commission,
bonus, kickback, or rebate, or engaging in any split-fee arrangement in any form
whatsoever with a physician, organization, agency, or person, either directly or
indirectly, for patients referred to providers of health care goods and services
So many billers try to argue this the wrong way, but not only have I researched this for years but have talked to several attorney's in all three of those states as well as others where there is some grey area on the rule.
The argument is not whether it's Illegal to do.. it's actually on the provider..they are prohibited from entering into such a contract. As for the biller, this could be harmful to their business to have this type of arrangement because if you ever have to go to court over a contract dispute (breach of contract, dr doesn't pay, etc) your contract in those states are NULL AND VOID so winning your case would be moot as you wouldn't see a dime.
In our subscriber area I have some actual case rulings/precedents.
Also you don't have to do just a flat fee, you can do hourly, per claim, per service, etc. As long as you don't COME up with the pricing based on a "percentage" In NY they actually are more specific with this in wording it so that you shouldn't even CALCULATE fees based on a percentage. BTW, NY's Law is as follows:
"Section 6530.19 - 19. Permitting any person to share in the fees for professional
services, other than: a partner, employee, associate in a professional firm or corporation,
professional subcontractor or consultant authorized to practice medicine, or a legally
authorized trainee practicing under the supervision of a licensee. This prohibition
shall include any arrangement or agreement whereby the amount received in
payment for furnishing space, facilities, equipment or personnel services used
by a licensee constitutes a percentage of, or is otherwise dependent upon,
the income or receipts of the licensee from such practice, except as otherwise
provided by law with respect to a facility licensed pursuant to article twenty-eight
of the public health law or article thirteen of the mental hygiene law"