Every physician knows that fee splitting is illegal and unethical. What constitutes fee splitting may not be as well understood. Late last year, the Illinois Supreme Court established fairly clear rules as to what constitutes illegal fee splitting. The Court’s ruling will have some surprising consequences. It may require physicians to change agreements with billing companies and others providing administrative services.
Traditionally, a physician was thought to engage in illegal fee splitting by dividing a patient fee with a recommending physician. The Supreme Court has substantially broadened that concept in the recently decided case of Vine Street Clinic v Healthlink, Inc. In that case, the Court ruled that it is illegal for physicians to share a percentage of their medical professional fees with anyone other than physicians with whom they practice (either in the same practice group or on a division of responsibility basis). This prohibition applies not only to payments to other physicians for a referral but also to percentage payments to anyone for any purpose, including payments for management and other services to the practice.