Fee Splitting in Veterinary Teleradiology?

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In the latest edition of Veterinary Practice News there is an article titled  “Expert Opinion Just Digital Hookup Away.”  A link to the article can be found here

The most interesting section of the article is a side bar titled “Fee Splitting Issue.”  According to the article, “some telemedicine veterinarians say it [unethical fee splitting] means their consultation fee isn’t to be enhanced by the primary care veterinarian. That is, if they charge $50 for their service, the client’s bill shouldn’t be padded to give the primary care veterinarian a cut of the fee.” Unfortunately, the name or names of these teleradiologists claiming that the practice of marking up laboratory services, such as teleradiology, is unethical is not listed in the article.

Veterinarians must take note of this debate as it pertains directly to them. These teleradiologists (whomever they are) are essentially saying that marking up lab services (such as blood chemistries and cytology) and teleradiology reports is unethical. If this discussion is allowed to continue and the pet owners are made to think that this is an unethical practice, veterinarians, at the hands of teleradiologists, stand to lose yet another source of revenue for their practice.

 

What is fee splitting?
According to Wikipedia: "Fee splitting is the practice of sharing fees with professional colleagues, such as physicians or lawyers, in return for being sent referrals. This is essentially the payment of a commission to the referrer with the express intention of ensuring that the referring doctor directs referrals of patients to the payee. In most parts of the world, the practice is considered unethical and unacceptable, hence fee splitting is often covert. The reason it is believed not to be in the interests of patients is because it represents a conflict of interest which may adversely affect patient care and well-being, since patients will not necessarily be referred to the most appropriate doctor to provide their on-going care but will instead be referred to those doctors or hospitals with whom the referring doctor has a "fee splitting" or commission payment type of arrangement."

Does marking up lab services (such as blood chemistries and cytology) and teleradiology services amount to fee splitting?
At Animal Insides, we agree that if a pathology lab or teleradiology service gave a kickback or rebate to the veterinarian to encourage the vet to send cases to the teleradiology or lab service that would constitute unethical fee splitting.

Fortunately, that is not what is happening in veterinary medicine. With regard to marking up contracted services such a lab services and teleradiology, the veterinarian is simply marking up a service they contract out to an outside company to account for the costs involved with providing this service to their clients. Stated another way,  this markup is justified because significant effort and expense is incurred by the veterinarian in order to provide lab services and teleradiology services to their clients. These expenses include:

  1. Technician's time to send the study, fill out the paperwork, and collect and distribute the report to the veterinarian when the report is returned to the practice.
  2. Veterinarian time to discuss teleradiology findings with the radiologist and pet owner. It is not unrealistic to expect a veterinarian to, in some cases, spend 10-15 minutes talking about teleradiology reports with the radiologist and/or pet owner.
  3. Veterinarian time to integrate and assimilate the laboratory findings with the case1.
  4. The expense to install digital radiography, computer systems, and broadband Internet access. These costs must be recouped.
  5. The veterinarian assumes a risk any time they contract out lab services. If the pet owner does not pay for their services, the vet is left holding the bill. As such, the veterinarian acts as a banker in these transactions and must be compensated accordingly.

 

Marking up laboratory services does not influence where the vet sends the case
Fee splitting laws are designed to protect the public by taking the financial incentive out of referring to a particular vendor. Marking up a service does not influence the veterinarian’s choice of vendor because veterinarian will mark up the fee regardless of where they send the case.  As such, the choice to markup a service is essentially unrelated to which vendor the veterinarian uses.  Therefore, there is no financial incentive to choose one teleradiology or laboratory service over another as a result of marking up contracted services.

Bottom line: Veterinarians must monitor this debate because the ethics of  marking up lab services are now being discussed online. This discussion largely affects veterinarians more than the teleradiology services.  Although we are not the ethics police and this article should not be used as legal justification for what you do in your practice (consult your lawyer for that type of direction), we (Animal Insides) do not feel that marking up lab services or teleradiology services represents fee splitting nor is it unethical. Perhaps it is time for the AVMA to make a position statement on this subject.

Comments from Industry leaders about this topic.

Matt Wright DVM DACVR of Animal Insides, Sight Hound Radiology, Shadowsmiths, and DVMinsight (and the author of this article): We do not feel that marking up contracted services represents fee splitting nor is it unethical. Veterinarians must recoup their costs associated with providing these services to their clients. Moreover, splitting the fee for the service and the markup as a separate line item would not change the final cost to the pet owner but  it would create confusion for the pet owner.”

Mark Crootoff DVM, veterinary practice managment consultant with Crootof Veterinary Consulting: As a veterinarian who practiced for more than twenty years with small animals (and as a practice management consultant), this has nothing to do with FEE SPLITTING. This isn't about the hospital getting a cut of the specialist's fee, it is all about covering costs. You are describing a fee that all hospitals should be charging to cover their expenses related to the entire procedure. Too many hospitals either do not charge or do not charge enough to cover their "hidden" costs. Every hospital has to invest a large amount of time (and we all know time is money)- doctor on the case relaying the specialist's comments, often consulting with the specialist, technicians having to send the study and on and on. When a fee is not being charged, then that hospital is essentially bleeding money and will (sooner rather than later) need emergency care or will become weaker and weaker financially. Unfortunately, We see this mistake way too often.

Brian Poteet DVM DACVR, president Vitalrads: In my 15+ years in veterinary teleradiology, it is extremely common for referring veterinarians to charge a nominal fee over and above what they are charged for image interpretation.  This fee is designed to cover costs associated with electronic submission of the images and the request (such as technician time, computer costs, etc). This fee is by no means "price matching" as it has been "nominal" and fair - typically $5-$20 dollars.  Charging this small amount of extra money for each case submission is exactly the same as charging the client an extra amount when the referring veterinarian submits labwork or other types of consults (ECG, etc).

As a veterinary radiologist that has practiced teleradiology for years, I think charging a nominal extra fee is appropriate, fair and good business. I am confident that the veterinarians that decides to use teleradiology services and especially the veterinarians that send ALL cases to be read by a radiologist, will attest to the fact that their clients rarely complain about the total teleradiology fee (consult fee plus the extra charge for technician time) as this fee is money well spent and in probalby all cases, is much, much less than what they pay for the same service on the human medicine side.
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William R. Lee, DVM, DACVR, www.visionvetimaging.com, I always encourage referring veterinarians to charge a nominal additional fee for my services. I think it is ethically appropriate for the reasons stated above and is smart from a business perspective. I do not expect veterinarians to devote the time and energy required to submit images, process reports, and communicate with me and the pet owner without receiving compensation. They should charge for the input they provide in making teleradiology work because it would not work without them, and they will be happier with my services in the long run if they do.
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Gerald Snyder, VMD, Veterinary Productivity, Inc. The allegation that fee splitting is somehow wrong is outmoded. Of course fee splitting occurs in veterinary medicine as it does in every other business worldwide. When one lab tries to steal your business from a competing lab by offering a lesser fee, that provides additional profit to the veterinarian. Most practices ethical problems by passing the savings on to their clients by using the same markup on the lesser fee. Every business that offers a rebate is fee-splitting! All ethical problems here can be resolved by considering that the veterinarian has nothing to sell but his or her time. However, the public will not honor the $6-8 per minute fee that we would have to charge. This allows no other option but to sell ancillary items at a sometimes extraordinary markup. Of course, every manufacturer and distributor is splitting the fee with us Physicians don't fee-split of course. That would be unethical. They just invite their referring doctors to play free golf, join them on junkets to Las Vegas and receive freebies from the pharmaceutical companies. This is not seen in veterinary medicine, largely for economic reasons, but still it does not occur. We have a long way to go before we have to worry about allegations of misconduct!
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James Wilson VMD. JD Veterinary Business Advisors:"The position you have taken is the same one I took as a practice owner for 10 years and reflects the reality of doing business. No one is getting a kick back! All that is occurring is that the veterinary practice utilizing the types of consultations you have described, are simply enlarging their information data base to make sure their diagnoses and treatments are correct. "
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Ames Prentiss, CEO Intown Veterinary Group: "Charging for a veterinarians time and expertise is a concept often undervalued within the profession.  As the profession evolves and large retail & pharmaceutical companies look to the pet industry as a way to make money, veterinary professionals should embrace their training, knowledge and expertise as the primary differentiator and value they provide to their clients.  By extension, the opportunities that are becoming available for primary care veterinarians and specialists to work together on cases, through technologies such as teleradiology, should be embraced for their collaborative power to provide a unique combination of subject matter expertise with specific patient & client case knowledge in way that make the profession a leader, not a dinosaur.  Charging for a radiologists opinion and charging for a primary care veterinarians time to assimilate this opinion into the overall management of a case is not only justified, it is critical to conveying the value provided throughout this collaborative system."
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Thom Haig, Profit Profile Corporation, and co-editor for the VIN practice managment boards: "As Gerry said, we must mark-up all of our services to stay in business.  Marking up teleradiology fees is no different than laboratory, drugs, or other “products.”  As others have said, this is a normal business practice and not related to kick-back or fee splitting.  Many practices mark-up  visiting surgeon or ultrasound fees.  Again, normal business!"
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Don Schofield, Director & General Manager IDEXX Telemedicine Consultants: "In response to a similar claim made by another telemedicine company two years ago, VDIC (Now IDEXX Telemedicine Consultants) asked the Judicial Council of the AVMA if the practice of marking up professional services, specifically telemedicine, is equivalent to “fee splitting” as described in section IX (B) of the Principles of Veterinary Medical Ethics.  In response to this request, we were advised in writing by the AVMA that a veterinarian’s mark-up on products or services on a client’s bill is not the equivalent of fee-splitting and does not violate the PVME."

 

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1. The referring veterinarian is ultimately the person in charge of making treatment decisions based on a teleradiology or pathology reports. many vets do not realize that it is the veterinarian who is responsible if a misdiagnosis or bad recommendation is made in a teleradiology report because they are the ones who are ultimately responsible for patient care. As such, until, veterinarians are asked to blindly follow recommendations from teleradiology or pathology services, they must be paid for their time to integrate and consider the results and they pertain to the case.