Musings of a Dinosaur

A Family Doctor in solo private practice; I may be going the way of the dinosaur, but I'm not dead yet.

Saturday, August 30, 2008

Why is This Legal?

So I was talking with a lawyer the other night (briefing him about health care, actually) and the topic of "referrals" came up. He mentioned that when he as a lawyer is unable to help a client and makes a referral to another attorney, he gets paid by that attorney; either a flat rate or a percentage of any recovery made in the case. Routinely. It's how they do business. No one thinks twice about it.

Excuse me, but as a doctor we call that a kickback and/or fee-splitting. It's considered illegal, immoral, unethical and grounds for license revocation. Rep. Peter Stark of California has eponymous legislation that has now spawned three separate phases and untold reams of regulation that has drastically impacted the way doctors are legally permitted to do business. I recently read that at this point, even he agrees the entire exercise has been a waste of time and effort. [Thanks to Anon 8:54 for link]

Yet apparently lawyers pay each other for referrals all the time. Excuse me, Tim, but: un-F***ing-believable!

11 Comments:

At Sat Aug 30, 07:29:00 AM, Blogger Medblog Addict said...

Hey, quit talking bad about my dream job. When I first got out of law school, a PI attorney gave me a handful of his business cards and told me all I had to do was write my name on the back of his card, then send the potential client to his office. I’d get a referral fee if he took the case and made a recovery. I threw his business cards away, but ever since then, I thought that would be my dream job--I’d round up clients, refer them to other lawyers who did all the work, then just sit back and wait for the referral fees to come rolling in.

You left the "uck" out. Are you going soft, Dino? BTW, congrats on the paying writing gigs.

 
At Sat Aug 30, 09:09:00 AM, Blogger TheOtherOne said...

Medblog, that set-up (paying a non-lawyer for the referral) is flat-out illegal (at least in states I know of). The attorney-to-attorney thing is theoretically tied to the fact that attorney 1 did some work to convince the client to hire an attorney, then advised on which attorney to hire. It's *supposed* to be tied to actual work done, not a standard referral percentage . . . .

 
At Sat Aug 30, 10:54:00 AM, Blogger #1 Dinosaur said...

Yeah, theotherone, so why is it not legal for me to determine that the care of a specialist is required, "do some work to convince" the patient to go to a particular specialist, but then not be allowed to collect a fee from the specialist? Is it because the patient pays me anyway? Does the referring attorney not charge the client for the time spent making the referral?

 
At Sat Aug 30, 12:43:00 PM, Blogger SuSaw said...

Sounds like real estate brokers to me.

 
At Sat Aug 30, 02:02:00 PM, Anonymous Pine Baroness said...

#1 Dino...It is because the politicians who write the laws are lawyers!!!

 
At Sat Aug 30, 02:54:00 PM, Blogger Jay said...

Pine Baroness nailed it. Since lawywers make the laws, they make sure that the laws benefit THEM, yet make it illegal for the rest of us shmucks. I do find that very interesting.

 
At Sat Aug 30, 08:54:00 PM, Anonymous Anonymous said...

Stark article in Forbes

Wouldn't be this, would it?

 
At Sun Aug 31, 07:36:00 PM, Anonymous Anonymous said...

It's been my understanding ever since law school that fee-splitting, except where both lawyers actually do some work AND where the client consents -- is indeed unethical according to state codes of ethics for lawyers. Are you sure the lawyer wasn't just pulling your leg?

Kensington MD

 
At Mon Sep 01, 01:24:00 PM, Anonymous Anonymous said...

Other things about medicine versus law is that lawyers get paid for phone advice, doctors and their ilk do not. Another thing is that dentists can bill and get paid for the balance left after insurance and doctors cannot.

 
At Thu Sep 04, 09:59:00 AM, Blogger TheOtherOne said...

so why is it not legal for me to determine that the care of a specialist is required, "do some work to convince" the patient to go to a particular specialist, but then not be allowed to collect a fee from the specialist? Is it because the patient pays me anyway? Does the referring attorney not charge the client for the time spent making the referral?

You're probably right that part of it is this sort of fee-splitting happens with contigent fee (no money up front) cases, so the originating attorney isn't going to get anything directly from the client. That doesn't by itself justify a *big* fee-split in a big case.

My best guess is that attorneys got to write their own ethics rules, and either doctors wrote different rules for themselves or different rules were imposed on the doctors . . . .

 
At Sun Sep 07, 11:43:00 AM, Blogger ANATOTITAN said...

Well, the reason it is "legal," should be self evident. The laws are made by lawyers. DUH.

 

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