To get patients for the new enterprise, Ramos and Walford had to invest heavily in marketing — and in building relationships with attorneys. Like PI lawyers, doctors who specialize in accident cases have had to adapt to the loss of PIP coverage. Walford and Ramos agreed to provide treatment without requiring payment up front in return for a lien against any possible settlement in the case. To make it work, they'd have to rely on personal-injury lawyers to refer their banged-up clients to the "lien doctors" in the first place.
"When the tort system changed," Ramos explains, "people couldn't get care unless a doctor agreed to get payment at the end. That, or trade chickens with them or something. That means your alliances are with attorneys, whether you like it or not. They can be very good to you or very bad to you. They control the checkbook."
Part of the Deal, Ramos says, was that Spine and Injury Centers shelled out thousands of dollars a month for marketing, directly and indirectly, including $10,000 a month to something called the Lawyer Connection. Owned by Julia Mintz, David's wife, the Lawyer Connection ran print and TV ads promoting the Mintz Law Firm; accident victims who called the ad's toll-free number in search of legal advice would be referred to the firm for a consultation. If those callers also needed medical care, they were urged to see one of several providers. Those providers had either paid for their own ads through the Lawyer Connection or were contributing to the operation's overhead, including paying for the phone dispatchers who screened the calls. According to Ramos, Walford and a few other chiropractors around town were subsidizing Mintz's marketing efforts in return for having Mintz clients referred to them for treatment.
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."