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Thread: billing company charging % of income, is it legal?

  1. #1
    Join Date
    Apr 2007

    Default billing company charging % of income, is it legal?

    AAPC: Back to School

    I have my own small medical billing service. One of my clients forwarded a letter on a lawyers letterhead which is supposedly from Dept of Health for State of NY, stating that "compensation arrangement based on percentage of revenues constitutes illegal fee splitting". Any billing services I know charge a percentage of collections. Not sure if this is legit or a law firm is looking for clients. Anyone?

    Thanks, in advance, for any input.

  2. #2
    Join Date
    Apr 2007
    Merrillville, IN

    Talking I own small business too

    And charge % of collections. Jus' had an event with Secretary of State on separate issue. But this was pointed out, and was NOT a concern in our state. I do not reside in NY, and they could have other laws. I would call your Secretary of State Attorney General office, ... and say you are researching for future endeavor, is this legit or acceptable.

    Hope that helps,
    Sandra D.

  3. #3
    Join Date
    Apr 2007

    Default thanks

    thanks for your reply Sandra.


  4. #4


    I have done some research on this for consulting purposes and what I have read billing companies may not be able to charge a percentage for billing out Medicaid claims. In some states you may have to charge a flat fee for all the Medicaid claims you submit. Hope that helps

  5. #5

    Default Ny fee splitting

    It is illegal to charge a precentage in the state of NY. IN NY LAW IT STATES IT IS FEE SPLITING AND NOT ALLOWED. Most states will allow you to charge a precentage but NY is not one of them. For instance in NJ you have to be certified with the Banking and Insurance Dept but they allow you to charge a precentage.

    P.S. this became the rule over a year ago.

    Hope this helps!



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