Ask Our Experts: Can I put a practice rep's incentive in his contract?
Question: I am in the process of hiring a practice rep and I want to base his incentive on the total production of revenue that the practice makes. We see Medicare patients also. Can I put his incentive, which is 5% of the practice revenue, in his contract?
–N.M., Neurology
Answer: When utilizing a practice representative or liaison, we highly recommend a significant incentive connected directly to production.
As it involves Medicare patients, it is our general understanding that if your representative is calling on the staff and physician referrers and explaining why you are the best source for their patient's care, then incentivizing them is OK. Your employee does not directly control the care of the patient or advise the patients; they simple educate the referring offices.
What is generally understood you cannot do is incentivize any referring practice employee for referrals or your own practice employees for upselling procedures to patients once they are in your practice.
Note: This is not a legal opinion and you are advised to check this with your legal counsel.
Marketing expert Jonathan Vidal, Senior Director, Consulting Services, for Practice Builders, answered this question. Mr. Vidal is a former senior director of marketing for Endocare, Inc., a medical device company, and a former director of marketing for Circon-ACMI, the largest producer of medical endoscopes.