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Frequently Asked Questions

Compensation for Change of Prescribing Practice

What are the ethical and legal issues in receiving compensation for moving patients from brand name drugs to generics?

American Medical Association (AMA) Policy H-125.984 recognizes that generic drugs can be less costly alternatives to brand name products.  H-125.984 also states that physicians should be free to use either the generic or brand name in prescribing drugs for their patients.  However, physicians should always consider what is best for the health and well-being of their patients ahead of cost concerns when making decisions about patient care.  Furthermore, financial benefits a physician may receive from an insurer for switching patients to generic drugs should not factor into a physician’s decision regarding patient prescriptions.  Any benefits a physician may receive from an insurer or drug manufacturer as a result of switching patients to generic medications should conform to not only pharmaceutical industry guidelines but also the medical profession’s ethical guidelines.

According to PhRMA’s Code on Interactions with Healthcare Professionals, “[t]he giving of any subsidy directly to a healthcare professional by a company may be viewed as an inappropriate cash gift.” PhRMA Code on Interactions with Healthcare Professionals, page 6, www.phrma.org/sites/default/files/108/phrma_marketing_code_2008.pdf. Furthermore, the Code warns against companies using benefits such as consultant arrangements as “inducements [or] awards for prescribing or recommending a particular medicine or course of treatment.” Id. at 8.  PhRMA’s Code further suggests that “[p]ayments in cash or cash equivalents should not be offered to healthcare professionals either directly or indirectly, except as compensation for bona fide services.” Id. at 12.  Finally, PhRMA’s Code cautions that no form of compensation or benefits “should be provided or offered to a health care professional in exchange for prescribing products or for a commitment to continue prescribing products…nothing should be offered or provided in a manner or on conditions that would interfere with independence of a healthcare professional’s prescribing practices.” Id. at 13.

According to the AMA Code of Medical Ethics, physicians should be aware that “monetary incentives may be judged in part on the basis of their size.” AMA Code of Medical Ethics, Opinion 8.054(2)(a).  The Code warns that “[l]arge incentives may create conflicts of interest that can in turn compromise clinical objectivity.” Id.  Furthermore, the Code suggests that the “proximity of large financial incentives to individual treatment decisions should be limited in order to prevent physicians’ personal financial concerns from creating a conflict with their role as individual patient advocates.” AMA Code of Medical Ethics, Opinion 8.054(2)(b).  Finally, “patients must be informed of financial incentives that could impact the level or type of care they receive.” AMA Code of Medical Ethics,  Opinion 8.054(4).  Therefore, physicians “must be prepared to discuss with patients any financial arrangements that could impact patient care.” Id.

Physicians should be aware that any gifts of compensation they receive is likely to implicate the federal anti-kickback statute.  According to the federal anti-kickback statute, physicians who knowingly and willfully receive any remuneration in return for recommending that a patient purchase, lease, or order “any good…or item for which payment may be made in whole or in part under a Federal health care program shall be guilty of a felony and upon conviction thereof, shall be fined not more than $25,000 or imprisoned for not more than 5 years, or both. 42 U.S.C. 1320a-7b(b)(2)(B). 

Given the potentially severe legal and ethical ramifications of compensation arrangements with insurers, physicians should strongly consider consulting with a legal advisor experienced in these types of agreements prior to entering into a compensation agreement.


What can I do if I think my patient is too old to drive?

Some states have mandatory reporting laws. You are advised to contact the state department of motor vehicles for specific requirements.

In addition to any state requirement, the physician can evaluate and counsel the patient who may be at risk for driving and document the assessment and recommendation.

Employment Contract

Can the AMA help me with my employment contract?

While the AMA cannot provide personal legal advice to physicians, the AMA does offer several free membership services that can enhance a physician's understanding and negotiating position as they navigate employment contracts and opportunities in various practice settings.  Physician Employment Agreements

Physician Employment Agreements

Good Samaritan Law

Am I covered under the "Good Samaritan" law if I provide medical care at a sporting event or community event?

Good Samaritan laws vary by state, so you should consult with your attorney or state medical society. However, generally, if a physician comes upon an emergency situation and provides assistance, that would generally be a "Good Samaritan" situation. If the physician is a team physician, then that may not necessarily be a "Good Samaritan" situation.

Interpreter for Deaf Patients

Am I required to provide an interpreter for a deaf patient in my office?

Under the Americans with Disabilities Act, a physician is required to make a reasonable accommodation to patients. However, if there is another means to communicate with a hearing impaired patient (family interpreters, lip reading, writing) and the patient agrees, then an interpreter may not be necessary. The situation calls for "reasonableness." If an interpreter is needed, the physician is responsible for payment for those services.

Leaving a Practice

I'm leaving the employment of a physician group practice, can I take my patients and patient records with me? Can I notify patients I am leaving?

The records belong to the practice. Unless your employment agreement provides otherwise, you may be able to notify patients that you are leaving the practice and notify them of your new address. However, you should be very clear about what you are allowed to do regarding notification of patients when leaving the practice. It is recommended that you discuss/negotiate the process by which you will exit the practice. Request the right to notify your patients of your new address of your departure and information on how to contact you at your new location.

Patients are not prohibited from requesting that their medical record be forwarded to another physician, however, a physician should be very careful to avoid breach of an employment agreement, breach of privacy or patient confidentiality in accessing, copying, or taking patient records.

Model Employment Agreement

Medical Record Retention

What are the legal requirements for medical record retention, release of information, storage, etc. for my medical practice?

State laws generally address medical record requirements, such as retention storage, so you may contact your personal attorney or the state medical society if are not familiar with the law in your state. There are federal laws that address privacy and release of health information, including psychiatric and alcohol treatment records (HIPAA) which are very specific.

HIPAA website

Parental Rights - Treatment of Minors

What should I do if a parent asks me to examine their minor child to determine illegal drug use, sexual activity or STD?

Generally, parents may authorize treatment for their minor children. However, tests like these are often requested for minors who are perhaps "mature minors" who object to the test. State laws vary regarding age of majority, disclosure of patient information to a parent as well as testing minors for STDs. Some state laws allow physicians to treat minors for some conditions without parental consent. However, you should contact your attorney to verify state law regarding this. A physician is not obligated to perform these tests or examinations.

Patient Relationship - Termination

How can I "terminate" a patient from my practice?

In order to terminate a patient/physician relationship, it is recommended that you notify the patient in writing of your decision and give the patient their recommendations for physicians who can be contacted. If the patient is currently being treated by the physician for an acute illness, it is recommended that the physician wait to discharge the patient until the patient has completed treatment and is stable.

Reporting Patient Abuse

Am I required to report abuse that I suspect has occurred to a patient?

State law may require a report of abuse — child, elder, or spousal. You should call your state medical society if you are unfamiliar with the law in your state.

Responsibility for Nursing Staff

Am I responsible for my office nurse if she is administering injections, vaccinations or other treatments?

This depends upon the law in your state regarding the practice of nursing. If a nurse is practicing within the scope of nursing, as defined by state law, the nurse is responsible for his/her actions. So, if the nurse is within the law by administering injections — and you have no reason or knowledge that he/she is not capable/competent to provide the services, then the nurse is responsible for his/her actions. However, you should consult your professional liability insurer or attorney if you have questions regarding the treatments your office nurse is performing.


Can I refer my patients to an ambulatory surgery center (or MRI or cancer treatment center, etc.) that I own?

The AMA cannot provide individual legal advice to physicians. You are strongly encouraged to seek legal counsel regarding business ventures. However, this law is complex and legal counsel is advised.

The Stark law prohibits a physician from ordering "designated health services" (DHS) for Medicare patients from entities with which the physician (or an immediate family member) has a financial relationship.

Designated Health Services

  • clinical laboratory services
  • physical therapy services
  • occupational therapy services
  • radiology, including MRI, computerized axial tomography scans, and ultrasound services
  • radiation therapy services
  • durable medical equipment and supplies
  • parenteral and enteral nutrients, equipment, and supplies
  • prosthetics, ortbotics, and prothetic devices
  • home health services and supplies
  • outpatient prescription drugs
  • inpatient and outpatient services

Stolen Prescription Pad

What should I do if someone has stolen my prescription pad and writes a prescription using my name and DEA number?

If you know the identity of the person, you can report it to local authorities. If you don't know the identity, then you may notify local pharmacies where you suspect the prescription may be filled, but you are not required to do this.