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It's hard to say if the average caller realized that the Lawyer Connection was more of an advertising vehicle than a referral service, or that the doctors being recommended to callers may have paid for the call to begin with. But Ramos knew about the arrangement. What puzzled him was the 20 percent. What 20 percent?
And that, Ramos says, was when the office manager told him about the deal within the Deal. In addition to the ten grand a month for marketing costs, Spine and Injury Centers was paying the Lawyer Connection up to 20 percent of the fees it collected from patients who'd been referred to them by Mintz's firm — a continuation of an arrangement that Walford had with the Lawyer Connection before Ramos entered the picture. Medical associations have varying opinions on the ethics of referral fees, but Ramos says he was alarmed to discover that his company was paying a fee based on income generated by the patient. "This was a very eye-opening afternoon for me," he remembers.
Ramos insists that his problems with David Mintz started soon after he found out about the referral fees and refused to pay them any more. "Up to that point, we were great doctors," he says. "The minute we cut off his kickback and he started fighting with my partner about what he was owed, he started settling cases and keeping the money. This went on and on."
Mintz's side has been careful to characterize the wrangle as one over advertising debts owed to the Lawyer Connection, not referral fees payable to Mintz or his law firm. The distinction is crucial. The Colorado Rules of Professional Conduct prohibit attorneys from paying or accepting referral fees; there are only a few exceptions, such as paying fees to a not-for-profit lawyer referral service. The notion of a lawyer collecting a fee for referring a client to a particular doctor "is fraught with conflict-of-interest issues," says John Gleason, who heads the Colorado Supreme Court's Office of Attorney Regulation Counsel. "Lawyers have routinely been disciplined around the country for engaging in that kind of practice."
Referral fees collected by a company in which an attorney has a financial interest could also be problematic, particularly if the underlying financial relationships aren't disclosed to the client. "I'm not sure you can do through the back door what you can't do through the front door," Gleason says.
But there was nothing improper about the Lawyer Connection's fees from doctors, Mintz says; he and his law firm received no payments from the deal. "The Lawyer Connection has never been about making money," he insists. "It's been about covering the costs of running the advertising. I have no financial interest in it. My wife's income has been minimal, if anything."
He acknowledges that the Lawyer Connection charged the doctors for advertising it did on their behalf and for overhead, as well as referral fees. "To the extent that they [paid for] overhead for the Lawyer Connection so it was available to answer calls for the Mintz Law Firm, that might have been sort of a side benefit," he says. "But we never took any of their money [to pay for] our ads."
And whatever outrage Ramos might have expressed about the fees, it didn't stop him from continuing to do business with Mintz and the Lawyer Connection. In the fall of 2003, Mintz, Ramos, Walford and two other doctors formed a partnership and purchased, for just under $1.5 million, the Lakewood office building that now houses Mintz's law firm. A few months later, as his partnership with Walford was dissolving, Ramos agreed to let the Lawyer Connection keep certain funds that Spine and Injury Centers had been demanding from the client settlement funds. "These payments will be retained as additional payments...for advertising and for amounts owed on patients referred to Spine and Injury and its affiliates by The Lawyer Connection," Ramos wrote in a letter to Mintz. "I acknowledge that these are valid debts."
Yet the arrangement did have nuances beyond the typical ad-agency deal. One proposed settlement agreement, signed by the Mintzes but not Ramos and Walford, indicates that Spine and Injury Centers owed money not just for patients referred through the Lawyer Connection, but also those referred to the doctors by "David J. Mintz and associates." Stranger still, the agreement proposes that in the future, the law firm and Spine and Injury Centers should alternate in choosing lawyers for those who call 1-800-4-INJURY when the case involves something other than personal injury; for example, Mintz would pick one workers' comp lawyer to refer a caller to, and the doctors would get to pick the next one.
Mintz says that the "kickback" claims are designed to distract from the real nature of his dispute with Spine and Injury Centers, which had to do with the company's treatment and billing procedures. Like many attorneys, Mintz routinely negotiates discounts on medical bills for his clients — "I know just because they put a number on the page doesn't mean that's the fair value," he says — but the billing issues with Ramos and Walford were on an entirely different plane.