Healthcare Practice Marketing Ethics Ethical Healthcare Marketing Does Not Include Fee Splitting

Feb 9, 2010 Anthony Vultaggio
Knowingly or unknowingly, many doctors risk losing their medical licenses. Fee-splitting is illegal in almost every state, and deemed unethical by the AMA.

Physicians in the U.S., faced with increasing third-party oversight and expanded government involvement, are looking to maintain their practices by attracting cash-paying patients. To find these patients, doctors sometimes turn to brokers who charge a percentage of the healthcare fee. Knowingly or unknowingly, these doctors risk losing their medical licenses. Fee-splitting, by various state definitions, is illegal in every state, and has been deemed unethical by the American Medical Association.
What is medical fee splitting?

Fee splitting traditionally denoted a surgeon’s offer to give a portion of his surgical fee to the referring physician. Such behavior was condemned because of the possibility that a referring physician’s greed would overpower concern for the patient’s welfare. Court cases have broadened the concept to make it illegal for doctors to share their fees with any entity other than with fellow physicians in a practice group (see Vine Street Clinic v. HealthLink Inc., Illinois Supreme Court No. 99790, Sep. 21, 2006). It has even been ruled illegal for a billing company to work on a contingency basis tied to a physician’s bill (see Center for Athletic Medicine, Ltd. v. Independent Medical Billers of Illinois, Inc., May 28, 2008).
Will fee splitting become a bigger issue in U.S. medicine?

U.S. doctors are becoming more frustrated in their attempts to earn a living that fairly compensates them for their investment in a decade or more of higher education, especially as the government expands its involvement in the medical industry. In response, physicians are going to be tempted to pay brokers to find them cash-paying patients. Brokers regularly accept payment from patients at a marked-up rate, then pay the physician the agreed upon price. Physicians get the price they asked for with no discount and no effort on their part to find the patient. This very tempting situation will will increase with the growth of medical tourism and intermediaries representing patients from around the globe. While it’s perfectly acceptable to provide medical services on an international basis, it’s illegal in the United States to pay a broker a percentage of the medical fee, even if they are simply withholding a portion of what was charged unbeknownst to the physician.
How can physicians legally market to cash-paying patients?

In the medical world, a commission or kick-back for a medical service is considered illegal fee splitting. However, just as a specialist can place an ad in the phone book to market to consumers, it’s both ethical and legal for a physician to join a flat-fee service which connects cash-paying patients with qualified doctors, assuming that the patient pays the doctor directly.

Online portals, such as, have developed to allow patients interested in everything from primary care, pediatrics, and imaging, to Prolo Therapy, Orthopedic surgery, psychiatric care, and more to interact directly with doctors. Physicians using portals such as this can expand their practice without jeopardizing their license, all for less than the cost of a yellow pages ad.

Read more at Suite101: Healthcare Practice Marketing Ethics: Ethical Healthcare Marketing Does Not Include Fee Splitting

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