Provided by: Jennifer Kirschenbaum, Esq.
July 23, 2024
Question:
Hi Jennifer,
Is it legal to have a “refer a friend” program that offers free services or discount rewards? I see a lot of practices doing this….
Thanks,
Dr. A
Answer:
Under NYS Licensing Law and other state laws it is illegal to pay a “kickback” – money for referrals. I understand your colleagues may be offering referral programs, and he/she may not ever have an issue, but this is a program that could land your colleagues in trouble. Especially where insurance is involved.
In NY, we rely on the simple language detailing professional misconduct - NYS Education Law s. 6530
§ 6530. Definitions of professional misconduct. Each of the following is professional misconduct, and any licensee found guilty of such misconduct under the procedures prescribed in section two hundred thirty of the public health law shall be subject to penalties as prescribed in section two hundred thirty-a of the public health law except that the charges may be dismissed in the interest of justice
Hi Jennifer,
Is it legal to have a “refer a friend” program that offers free services or discount rewards? I see a lot of practices doing this….
Thanks,
Dr. A
Answer:
Under NYS Licensing Law and other state laws it is illegal to pay a “kickback” – money for referrals. I understand your colleagues may be offering referral programs, and he/she may not ever have an issue, but this is a program that could land your colleagues in trouble. Especially where insurance is involved.
In NY, we rely on the simple language detailing professional misconduct - NYS Education Law s. 6530
§ 6530. Definitions of professional misconduct. Each of the following is professional misconduct, and any licensee found guilty of such misconduct under the procedures prescribed in section two hundred thirty of the public health law shall be subject to penalties as prescribed in section two hundred thirty-a of the public health law except that the charges may be dismissed in the interest of justice
- 18. Directly or indirectly offering, giving, soliciting, or receiving or agreeing to receive, any fee or other consideration to or from a third party for the referral of a patient or in connection with the performance of professional services;
Other laws to be concerned about are the federal anti-kickback statute which prohibits remuneration of any kind for referrals payable by federal funds. State equivalents also exist for Medicaid monies….
Point being, regardless of the payment source, a prohibition against incentivizing referrals likely applies…Always ask BEFORE doing. An ounce of prevention is worth a pound of cure!
