Revenue-sharing agreement dispute

April 25, 2011

Learn more about sharing expenses and revenues with other physicians.

Q: I am a physician and have been working for another doctor as an independent contractor, seeing her patients for more than 10 years. My payment has been 50% of the collections. Is this the prevalent rate, and if not, is it reasonable and fair? The physician wants to reduce my share to 45% retroactive for all of last year. Is that legal? I now have my own patients in the practice, but we see each others' patients. I get an incentive check from the practice, of which I am only given 45%. I believe this practice is unfair. What is your opinion?

A: The type of an arrangement that you describe is rather common, but there is no real answer to what is fair and reasonable without knowing the type of practice that you have and what the revenues and expenses have been on a historical basis.

Certainly, the idea of doing something retroactively seems uncharacteristic of most business arrangements. However, it is not uncommon for doctors who are sharing expenses or working with the type of overhead contribution plan that you describe, to periodically check whether the arrangement mirrors actual costs.

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