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Incentivizing for Cosmetic Service Referral

Provided by:  Jennifer Kirschenbaum, Esq.

May 31, 2018

 

Question:

Jennifer, 

Can I pay employees to refer for cosmetic services in my office if those services aren't covered by insurance? 

Thanks, 
Dr. P


Answer:

In New York and many other states there are laws specifying it is professional misconduct to pay an inducement for the referral of any services - generally, which I interpret to cover cosmetic/medical or otherwise.  See Education Law s. 6530.  Typical incentive compensation is limited to a percentage of services personally rendered by the employee, excluding designated health services (as defined by CMS).  The fact that the services may not be covered by insurance is irrelevant, except for the fact the likelihood of review (or agency potentially looking to review) is smaller.  


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