What Is . . . the Corporate Practice of Medicine and Fee-Splitting?: Fee-Splitting Prohibitions

By Ari J. Markenson, Esq., Winston & Strawn, LLP, New York, NY and Angela Humphreys, Esq., Bass, Berry & Sims PLC, Nashville, TN

Introduction

In most states, prohibitions against the corporate practice of medicine operate in tandem with fee-splitting prohibitions, which are intended to regulate who may share in the revenue generated by providing medical services. These laws typically impose restrictions on physicians, prohibiting them from dividing fees with individuals for referrals made or for professional services rendered. Often, these rules also cover a layperson or an entity that might be involved in such a transaction. Fee-splitting prohibitions are designed to prevent both professionals and nonprofessionals from introducing financial incentives to influence the selection of healthcare providers and services in a way that compromises the quality of care or best interests of patients.

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