General Category > General Questions
charging a %
PMRNC:
I think I have info on the case your referring to.. I'll see what I have but meantime here's some more interesting reading:
The NY Bar Asso has had several requests for the verbiage change. This one in particular is a response to them from the NY Medical Society which I think really drives home clarification because this issue has been before the courts before. With Illinois the law was more grey so they had more wiggle room to change. I don't think you will see NY change.. but what do I know.
http://www.nysba.org/AM/Template.cfm?Section=Health_Law_Laws_Regs_and_Opinions&Template=/CM/ContentDisplay.cfm&ContentID=28915
Pg. 3: By it's terms, section 6530(19) appears to prohibit arrangements which compensate a management service organization or billing company on the basis of a percentage of the income or receipts of a physician's practice. In addition, physicians and billing companies should be aware that courts have generally concluded that compensation arrangements between physicians and lay persons based upon a percentage of the income or receipts of a medical practice are void and unenforceable. See, e.g., Hartman v. Bell, 137 A. D.2d 585 (2d Dept. 1988); United Calendar manufacturing v. Huang, 94 A.D. 2d 176 (2d. Dept. 1983); Toffler v. Pokorny, 157 Misc. 2d 703 (Sup. Ct. Nassau Co. 1993).
PMRNC:
I have this one in my giant folder too though I cannot locate a source: This is a Practice Management/billing company IN Florida (also state that prohibits physicians from fee-splitting contractual relationships, though that is NOT relevant, just a coincidence) who was suing a NY chiropractor for payment.. but OOPSIE... he's in NY so contract was null void.
On April 2, 1991, the Florida Circuit Court for Pinellas County granted a request for summary judgment made by a New York chiropractor who is being sued by PMA in Florida. The court ordered that:
"The practice starter agreement is null and void under New York law (Education Law S6509-A, McKinney's Consolidated Laws of New York, Annotated) because it constitutes illegal fee splitting."
While the Florida court has found the PMA contract void for all New York chiropractors, PMA has argued that it still should be paid for the value of the services it provided to its client (quantum meruit). In order for PMA to receive any payment on its contracts with New York chiropractors, PMA will have to prove in court the actual value of its services.
PMA has appealed the summary judgment. The appellate court probably won't hear the case before November 1991.
According to Jean Simons, Esq., a Florida attorney who represents over 120 PMA clients as well as the New York chiropractor who won the summary judgment:
"New York has strict fee-splitting statutes which have been well supported by the New York courts. The Florida court has recognized the right of New York to regulate medical practices within that state by granting this summary judgment declaring the PMA percentage contract invalid for a chiropractor who practices in New York."
PMRNC:
Not beating a dead horse just trying to help. THIS is the lead article I give potential clients. GREAT marketing article:
http://articles.submityourarticle.com/how-illegal-fee-sharing-may-cost-you-your-new-york-medical-license-51893
Billergirlnyc:
I don't think you're beating a dead horse, but the truth is since this effects this doctor's license he's allowed to fight the language or waste his money doing it. It won't change how I do business, but I will definitely be watching to see what happens. Maybe they'll do the opposite of what he's asking and specifically state third-party medical billing companies. Who knows.
PMRNC:
--- Quote ---I don't think you're beating a dead horse, but the truth is since this effects this doctor's license he's allowed to fight the language or waste his money doing it. It won't change how I do business, but I will definitely be watching to see what happens. Maybe they'll do the opposite of what he's asking and specifically state third-party medical billing companies. Who knows.
--- End quote ---
I agree. I'm actually glad to be away from % based billing. The clients I have had that switched over with me have not ONCE complained. Their invoices are pretty comparative. I get paid for all my time as I deserve to be. I would never go back to a %. I think eventually the entire industry will be subject to similar laws that will in general prohibit fee-splitting PERIOD. I kind of hope so because it better serves us to be held in a higher standard. Make sense?
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