Each state has different rules regarding fee splitting and referrals. For instance, New York has stringent fee splitting laws which prohibit certain arrangements with independent contractors, management companies and other billing companies. In Pennsylvania, practitioners are required to disclose to patients any financial interest in an entity to which the practitioner refers patients for services, tests, pharmaceuticals, medical devices and the like. Pennsylvania practitioners are also prohibited from receiving payment for referrals with respect to workers' compensation and medical assistance benefits or claims. Many private practices still compensate employees 100 percent based upon their individual productivity.
Some practices compensate owner-physicians on an equal basis.
Increasingly, practices are moving towards developing a compensation plan that accounts for the various contributions each physician makes to the group. To develop a compensation plan that is right for your medical practice, consider what your practice seeks to reward. Separate the various physician roles and identify goals and appropriate rewards. Recognize that physician income in a privately owned medical practice includes not only base salary and bonuses, but retirement contributions, fringe benefits and physician-specific business expenses. By separating each role and allocating a certain percentage of income to each role, you must identify goals that are realistic and fairly compensate members of the practice for their efforts.