NY Court Rules Medical Billing Company’s Contract With Doctor Based on Percentage of Bills Collected Not Illegal

Poulos LoPiccolo successfully opposed a summary judgment motion filed by a Texas doctor in a breach of contract action Poulos LoPiccolo's client brought against the doctor for failing to pay outstanding balances related to a medical billing contract.

The doctor argued it was not required to pay the billing company because the contract it signed with the medical billing company was illegal in NY because pursuant to the contract the medical billing company was paid a percentage of fees collected.  The doctor argued that such an arrangement is illegal pursuant to NY Education Law 6509-a.  However, the Court agreed with Poulos LoPiccolo's interpretation of the law and held that the contract is not illegal, denying the doctor's summary judgment motion.

The Court explained, "the case at bar does not involve the sharing of fees contemplated by the statute and regulation.  This case does not involve, for example, a professional's payment of a commission on fees realized from patients procured by an unlicensed person.  None of the 'red flags' such as patient referrals, medical procedures and testing, rental arrangements and employer-employee relationships have been raised in this case."

This is not only a great result for our client, but also a great result for the medical billing industry as a whole.