Health care entities and providers should know that New York has a "group" exception to its statutory anti-kickback provisions.


New York’s Complex Prohibitions Against Fee-Splitting, Kickbacks, & Self-Referral


            New York law actually contains three different legal rules prohibiting fee-splitting, kickbacks, and self-referral. This article describes the one contained in Section 6509-a of the NYS Education Law.

            Within Title VIII, the general provisions of Article 130 are applicable to all the health care professions. (See NYS Health Care Provider Licensing Laws Spell Out Who Can Practice).

            Subarticle 1 deals with licensing; subarticle 2 with regulatory responsibilities of the Board of Regents, the Education Department, and state boards for the professions; subarticle 3 with Professional Misconduct; and subarticle 4 with unauthorized practice (including aiding and abetting) and penalties. Subarticle 3 (Section 6509 of NYS Education Law) contains a list of activities that constitute professional misconduct, including such conduct as:

·         Practicing the profession fraudulently, beyond its authorized scope, with gross incompetence, with gross negligence on a particular occasion or negligence or incompetence on more than one occasion.[1]

·         Permitting, aiding or abetting an unlicensed person to perform activities requiring a license.[2]

·         Committing unprofessional conduct, as defined by the Board of Regents in its rules.[3]

                       Within Subarticle 3, Section 6509-a of NYS Education Law contains the following additional definition of professional misconduct:

That any person subject to the above enumerated articles, has directly or indirectly requested, received or participated in the division, transference, assignment, rebate, splitting or refunding of a fee for, or has directly requested, received or profited by means of a credit or other valuable consideration as a commission, discount or gratuity in connection with the furnishing of professional care, or service, including x-ray examination and treatment, or for or in connection with the sale, rental, supplying or furnishing of clinical laboratory services or supplies, x-ray laboratory services or supplies, inhalation therapy service or equipment, ambulance service, hospital or medical supplies, physiotherapy or other therapeutic service or equipment, artificial limbs, teeth or eyes, orthopedic or surgical appliances or supplies, optical appliances, supplies or equipment, devices for aid of hearing, drugs, medication or medical supplies or any other goods, services or supplies prescribed for medical diagnosis, care or treatment under this chapter, except payment, not to exceed thirty-three and one-third per centum of any fee received for x-ray examination, diagnosis or treatment, to any hospital furnishing facilities for such examination, diagnosis or treatment. (bold added for emphasis)

             “Groups” Exception

The definition in Section 6509-a continues with an exception:

Nothing contained in this section shall prohibit such persons from practicing as partners, in groups or as a professional corporation or as a university faculty practice corporation nor from pooling fees and moneys received, either by the partnerships, professional corporations, university faculty practice corporations or groups by the individual members thereof, for professional services furnished by any individual professional member, or employee of such partnership, corporation or group, nor shall the professionals constituting the partnerships, corporations or groups be prohibited from sharing, dividing or apportioning the fees and moneys received by them or by the partnership, corporation or group in accordance with a partnership or other agreement; provided that no such practice as partners, corporations or in groups or pooling of fees or moneys received or shared, division or apportionment of fees shall be permitted with respect to care and treatment under the workers’ compensation law except as expressly authorized by the workers’ compensation law.[4] (bold added for emphasis)

            The additional definition of professional misconduct in Section 6509-a states that it applies to persons licensed under articles 132 (chiropractic), 133 (dentistry, dental hygiene, and certified dental assisting), 136 (physical therapy and physical therapy assistants), 137 (pharmacy), 139 (nursing), 140 (professional midwifery), 143 (optometry), 144 (ophthalmic dispensing), 156 (occupational therapy), 159 (speech-language pathologists and audiologists), and 164 (respiratory therapists).[5] 

Notably, certain professions are not on this list (for example, medicine and acupuncture), but there still could be fee-splitting provisions in the licensing laws governing these professions. 

            Further, the Rules of the Board of Regents would likely govern these prohibitions. 

[1] NYS Educ. L. Article 130, Subarticle 3, Section 6509.2.

[2] Section 6509.7. Note that section 6513 prohibits unauthorized use of a professional title, and aiding and abetting of the same.

[3] Id., section 6509.9.

[4] The exception continues: “Nothing contained in this chapter shall prohibit a medical or dental expense indemnity corporation pursuant to its contract with the subscriber from prorationing a medical or dental expense indemnity allowance among two or more professionals in proportion to the services rendered by each such professional at the request of the subscriber, provided that prior to payment thereof such professionals shall submit both to the medical or dental expense indemnity corporation and to the subscriber statements itemizing the services rendered by each such professional and the charges therefor.”

[5] Subsequent sections set forth the rules governing proceedings and penalties in cases of professional misconduct.

If you have legal questions concerning self-referral, kickbacks and fee-splitting or patient brokering in New York, California, Massachusetts, Washington DC, and other states, contact a lawyer who knows the referral rules.

Consult an experienced health care law attorney who knows complementary medicine and integrative medicine for legal advice pertaining to any project involving allied health or CAM professionals.




Our law office has attorneys with legal experience  in FDA matters, including guiding  clients involved in health care  delivery, group medical and private  medical practice, who are concerned  about issues at the interface of  federal and state law, concerned  about medical board discipline or  medical malpractice liability  issues.  We also review and draft informed  consent forms and guide  clients concerning a variety of health care law  issues.

If you  have legal questions concerning telemedicine and telehealth practices, HIPAA legal issues, health care reform questions, or other health law matters in New York, California, Massachusetts, Washington DC, and other states, contact a lawyer who knows the rules.

Consult an experienced  health care law attorney who knows complementary medicine and  integrative medicine for legal advice pertaining to any project involving allied health or CAM     professionals.


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