Fee splitting
Fee splitting is the prohibited sharing of professional fees between a licensed clinician and someone who did not provide the care — the state-law doctrine that constrains how management companies, marketers, and platforms may be paid from clinical revenue.
- State-law bans on sharing professional fees with non-licensees
- Percentage-of-collections fees are the classic tripwire
- Strictness varies sharply — NY and CA among the toughest
- Reviewed alongside CPOM in every MSA analysis
What the doctrine prohibits
Many states bar physicians (and other licensees) from dividing professional fees with non-licensees, on the theory that revenue-sharing gives laypeople influence over clinical decisions. The classic tripwires: management fees calculated as a percentage of clinical collections in strict states, marketing arrangements paid per patient generated, and referral payments of any kind. New York and California are among the strictest; other states allow percentage arrangements with limits — the same MSA can be routine in one state and a violation next door.
Designing compensation that survives review
The safe pattern is fair-market-value fees for defined services — flat or formula-based management fees, per-service platform pricing, marketing paid at market rates rather than per conversion — documented and periodically revalidated. Fee-splitting analysis travels with corporate-practice-of-medicine review: the same MSA gets examined for both, state by state, and percentage-of-revenue terms are the first thing counsel flags.
Compliance handled, so you can build
Lithos runs the clinicians, pharmacies, and 50-state rules behind your care program — one API.
Frequently asked questions
Are percentage-based management fees illegal?
In strict states, percentage-of-clinical-revenue fees invite fee-splitting scrutiny; flat fair-market-value fees are the conservative structure. State-by-state counsel review is the only real answer.
Is paying for marketing fee splitting?
Marketing at fair market value is generally fine; paying per patient generated or per prescription starts looking like referral fees — the pattern the doctrine targets.
How does this relate to the anti-kickback statute?
Fee splitting is state law about sharing professional fees; the federal anti-kickback statute targets remuneration for referrals of federally funded business. Arrangements get reviewed against both.