Excessive fees- discipline of physicians 

GAG 94-052 Attorney General 2-258 OPINION NO. 94-052 Syllabus: 1. Absent evidence that a person holding a certificate under R.C. Chapter 4731 has engaged in fraud or misrepresentation, and in the absence of a violation of a provision of a code of ethics of a national professional organization appropriate to the certificate holder's profession, R.C. 4731.22(B) does not authorize the State Medical Board to discipline that person solely on the basis of the amount charged for services by that person. 2. Whether or not there exists a prior agreement between the patient and a person who holds a certificate under R.C. Chapter 4731 as to the fee to be charged for the certificate holder's services in a particular situation, in order for the State Medical Board to fmd the certificate holder in violation of R.C. 4731.22(B)(8), the Board must fmd that the certificate holder has made fnmdulent misrepresentations in the course of practice in order to obtain or attempt to obtain such fee. To: Robert Heidt, President, State Medical Board of Ohio, Columbus, Ohio By: Lee Fisher, Attorney General, August 30,1994 Your predecessor requested an opinion of the Attorney General on the following questions: I. Can the State Meci;,::al Board, pursuant to [R.C. 4731.22], proceed to take disciplinary action against a licensee found to be charging excessive fees without prior agreement between the patient and physician as to those fees, and without other evidence of ffclad or misrepresentation? 2. If the State Medical Board otherwise has no authority to proceed with disciplinary action, can a continuing pattern.of excessive fees charged without prior agreement between patients and the 2-259 1994 Opinions OAG 94-052 physician as to those fees be deemed as legally sufficient to establish fraud or misrepresentation under division (B)(8) or other related provisions of [R.C. 473l.22]? 3. If the State Medical Board has authority to proceed in excessive fees cases pursuant to [R.C. 473l.22 (B)(18)], without other basis for disciplinary action, must it adopt administrative rules pursuant to [R.C. Chapter 119] to explicitly defme the meaning of excessive fees? 4. If the State Medical Board has autho-::'ity to proceed in cases of excessive fees without other basis for disciplinary action, pursuant to [R.C. 473 l.22] , are the Board, its agents, conSUltants, and representatives shielded from liability under existing antitrust provisions for so proceeding? Statutory Authority of State Medical Board Within R C. Chapter 4731, the General Assembly has set forth the responsibilities of the State Medical Board, which is the body authorized to oversee the practice of medicine and surgery, osteopathic medicine and surgery, and various limited branches of medicine or surgery. As a creature of statute, the State Medical Board may exercise only those powers and duties that have been granted to it by the General Assembly. State ex rei. Copeland v. State Medical Board, 107 Ohio St. 20, 140 N.B. 660 (1923). Disciplinary Actions by State Medical Board The opinion request sets forth the following background infonnation: Historically, it has been argued that the Board does not have authority to proceed on excessive fee cases absent other considerations su.::h as fraud or misrepresentation. [R.C. 473l.22] sets forth the bases upon which the State Medical Board can impose disciplinary action. Of particular note are divisions ... (B)(5), and (B)(8) of that section which provide explicit grounds for the Board to act in situations involving fraud or misrepresentation. On the other hand, [R.C. 473l.22(B)(18)] requires Board licensees to maintain compliance with applicable ethical provisions. In light of this infonnation, the State Medical Board request first asks whether RC. 473l.22 authorizes the Board to take disciplinary action against a "licensee found to be charging excessive fees without prior agreement between the patient and physician as to those fees, and without oUter evidence of fraud or misrepresentation." . The disciplinary authority of the State Medical Board is set forth in RC. 473l.22, which states in part: (B) The board, pursuant to an adjudicatory hearing under [R.C. Chapter 119] and by a vote of not fewer than six members, shall, to the extent pennitted by law, limit, revoke, or suspend a certificate, refuse to register or refuse to reinstate an applicant, or reprimand or place on probation the holder of a certificate for one or more of the following reasons: September 1994 OAG 94-052 Attorney General 2-260 (4) Willfully betraying a professional confidence or engaging in the division offees for referral of patients, or the receiving of a thing of value in return for a specific referral of a patient to utilize a particular service or business.... (17) Any division offees or chflrges, or an~1 agreement or arrangement to shflre fees or charges, made by any person licensed to practice medicine and surgery, osteopathic medicine and surgery, or podiatric medicine and surgery with any other person so licensed, or with any other person.... (Emphasis added.) RC. 4731.22(B) thus authorizes the State Medical Board, for any of the reasons set forth therein, to limit, revoke, or suspend a certificate, reprimand or place on probation the holder of a certificate, or refuse to either register or reinstate an applicant. The Board's first question asks about its authority to discipline "licensees." This opinion will assume that the term "licensee" refers to a person who holds a certificate to practice in accordance with R.C. Chapter 4731. Divisions (4) and (17) are the only portions of R.C. 4731.22(B) that address fees, and they address only the division or sharing of fees. RC. 4731.22(B)(4) specifically proscribes the division of fees for the referral of patients. R.C. 4731.22(B)(17) proscribes the actual division of fees or an agreement to share fees with other licensees or with any other person. Neither RC. 4731.22(B)(4) nor R.C. 4731.22(B)(17), however, authorizes the State Medical Board to take disciplinary action against a licensee based solely upon the amount the licensee charges a patient for services. The opinion request also asks, assuming no prior agreement between patient and physician as to the fee to be charged and assuming no fraud or misrepresentation on the part of the licensee, whether RC. 4731.22(B)(18) authorizes the Board to discipline a licensee for charging fees that the Board fmds to be excessive. R.C. 4731.22(B)(18)(a) establishes as a basis for disciplinary action, [t)he violation of any provision of a code of ethics or'the American medical association, the American osteopathic association, the American podiatric medical association, and any other national professional organizations as are determined by rule, by the state medical board.... . The practitioner whose certificate is being suspended or revoked shall not be found to have violated any provision of a code of ethics of an organization not appropriate to his profession. Pursuant to RC. 4731.22(B)(18)(a), the Board may take disciplinary action against a licensee who violates a provision of a code of ethics of a national professional organization appropriate to that licensee's profession. Enclosed with the Board's opinion request were a number of ethics provisions from various national professional organizations, as described in R.C. 4731.22(B)(l8)(a). Whether a particular set of circumstances involving a licensee's charging of a fee may constitute a violation of an appropriate ethical provision, however, is a question that cannot be addressed in an opinion of the Attorney General. Rather, interpretation of the ethical standards applicable to the professions regulated under RC. Chapter 4731 has been delegated to the expertise of the State Medical Board. The rationale for delegating the decision of such matters to the State 2-261 1994 Opinions OAG 94-052 Medical Board was discussed in Pons v. Ohio Slate Medical Board, 66 Ohio St. 3d 619, 621-22, 614 N.E.2d 748, 751 (1993), as follows: [W]hen reviewing a medical board's order, courts must accord due deference to the board's interpretation of the technical and ethical requirements of its profession. The policy reason for this was noted in Arlen v. Slate (1980), 61 Ohio St.2d 168, 173, 15 O.O.3d 190, 194, 399 N.E.2d 1251, 1254-55: "' ......"'The purpose of the General Assembly in providing for administrative hearings in particular fields was to facilitate such matters by placing the decision on facts with boards or commissions composed of [people] equipped with the necessary knowledge and experience pertaining to a particular field. ***'" (Quoting Famma v. Slate Med. Bd. [1949], 151 Ohio St. 222, 224, 390.0.41, 42, 85 N.E.2d 113, 114.) Thus it is clear that interpretation of the ethical standards applicalilo.; [0 the professions regulated under RC. Chapter 4731 has been delegated to the expertise of the State Medical Board. It would be inappropriate, therefore, for the Attorney General to opine on a matter left to the expertise and discretion of the members of the State Medical Board for determination. See 1985 Op. Att'y Gen. No. 85-007 (the Attorney General has no authority to exercise on behalf of a state official the discretion delegated to that official). While RC. 4731.22(B)(18)(a) does empower the State Medical Board to discipline a licensee for violation of a provision of a code of ethics of a national professional organization appropriate to the licensee's profession, whether a provision of such a code of ethics may prohibit the particular activity you describe is a matter to be determined by the State Medical Board within the discretion conferred upon it by statute. I In answer to the first question, in the absence of any evidence of fraud or misrepresentation on the part of a licensee, and in the absence of a violation of an ethical provision of a national professional organization appropriate to the licensee's profession, R.C. 4731.22(B) does not authorize the State Medical Board to discipline that licensee solely on the basis of the amount charged by the licensee for services rendered. Violation of R.C. 4731.22(B)(8) The second question of the Board's request asks whether a continuing pattern of excessive fees charged by a physician without prior agreement between the patient and the physician as to those fees constitutes fraud or misrepresentation for purposes of R C. 4731. 22(B)(8), which prohibits "[t]he obtaining of, or attempting to obtain, money or anything of value by fraudulent misrepresentations in the course of practice" (emphasis added). In order to fmd a licensee in violation of RC. 4731.22(B)(8), the Board must fmd that the licensee, in an attempt to obtain It does not appear that the ethics provisions you have submitted expressly regulate the amount a licensee may charge for his services. One provision within the American Podiatric Medical Association Code of Ethics states that fees must not "exploit patients or others who pay for the services." This particular provision, however, sets forth no standards, factual grounds, or specific bases for fmding that a particular fee might be exploitative, and thus its meaning is sufficiently vague to render its possible application to the situation you describe uncertain. Septemher 1994 I OAG 94-052 Attorney General 2-262 money or something of value, has made fraudulent misrepresentations in the course of practice. 2 A licensee's charging of a particular fee without a prior agreement between the licensee and patient as to that fee does not, in itself, indicate that fraudulent misrepresentations hav~ been made. Rather, in order for the State Medical Board to fmd a licensee in violation of R.C. 4731.22(B)(8), the Board must fmd that the licensee has made fraudulent misrepresentations in the course of practice in order to obtain or attempt to obtain such fee. Such a finding is necessary whether or not there exists a prior agreement between the patient and the licensee as to the fee to be charged forthe licensee's services in a particular situation.3 The third question reads as follows: "If the State Medical Board has authority to proceed in excessive f~ cases pursuant to [R.C.4731.22(B)(18)] without other basis for disciplinary action, must it adopt administrative rules pursuant to [R.C. Chapter 119] to explicitly defme the meaning of excessive fees?" The fmal question asks: "If the State Medical Board has authority to proceed in cases of excessive fees without other basis for disciplinary action, pursuant to [R.C. 4731.22], are the Board, its agents, consultants, and representatives shielded from liability under existing antitrust provisions for so proceeding?" In . light of the answer to the first question, it is not necessary to address these fmal two questions. Conclusion It is, therefore, my opinion, and you are hereby advised that: 1. Absent evidence that a person holding a certificate under R. C. Chapter 4731 has engaged in fraud or misrepresentation, and in the absence of a violation of a provision of a code of ethics of a 2 A number of other provisions within R. C. 4731.22(B) address fraud or misrepresentation on the part of a licensee. See, e.g., R.C. 4731.22(B)(5) ("[s]oliciting patients or publishing a false, fraudulent, deceptive, or misleading statement"); R.C. 4731.22(B)(7) ("[r]epresenting, with the purpose of obtaining compensation or other advantage for himself or for any other person, that an incurable disease or injury, or other incurable condition, can be permanently cured"). The Board's question is limited, however, to the possible application of R.C. 4731.22(B)(8) to the situation described in the request. 3 In Bu" v. Board ofCounry Commissioners, 23 Ohio St. 3d 69,491 N.E.2d 1101 (1986) (syllabus, paragraph two), however, the court set forth the legal elements of fraud, as follows: (a) a representation or, where there is a duty to disclose, concealment of a fact, (b) which is material to the transaction at hand, (c) made falsely, with knowledge of its falsity, or with such utter disregard and recklessness as to whether it is true or false that knowledge may be inferred, (d) with the intent of misleading another into relying upon it, (e) justifiable reliance upon the representation or concealment, and (t) a resulting injury proximately caused by the Mliance. (Emphasis added.) Unlike R.C. 4731.22(B)(8), one may be responsible for committing the tort of fraud not only by making a false representation but also, where there is a duty to disclose, by concealing a fact that is material to the transaction. 2-263 1994 Opinions OAG 94-053 national professional organization appropriate to the certificate holder's profession, R.C. 4731.22(B) does not authorize the State Medical Board to discipline that person solely on the basis of the amount charged for seIVices by that person. 2. Whether or not there exists a prior agreement between the patient and a person who holds a certificate under R.C. Chapter 4731 as to the fee to be charged for the certificate holder's selVices in a particular situation, in order for the State Medical Board to fInd the certifIcate holder in violation ofR.C. 4731.22(B)(8), the Board must fmd that the certificate holder has made fraudulent misrepresentations in the course of practice in order to obtain or attempt to obtain such fee. September 1994