Distributor commission rates for 1099

[Anonymous]

What is the usual rate for a commission only 1099 position through a distributor? I have only worked for direct sales companies. I've heard as high as 50% but I think around 25% is the norm.

 

[Anonymous]

What is the usual rate for a commission only 1099 position through a distributor? I have only worked for direct sales companies. I've heard as high as 50% but I think around 25% is the norm.

Normal companies (those who sell stuff people actually will use) pay 12-20%. Companies that have 1 surgeon using their product because he is on the payroll or he developed the product will advertise 30-40% however there is a reason they are paying that. No one can sell it so they figure if you can flip a doc they would be willing to pay big bucks for that so they can now have 2 surgeons and 28 cases done annually.

Other reasons big commissions are offered is because the procedures would be going after have lost their CPT codes and the only people doing the procedures are the reps on cadavers in the lab.

Good luck and stay away from those pain creams. Those reps will end up needing that cream on their corn holes after they get sent to prison for fraud.

 

[Anonymous]

Why would you go to jail for selling pain creams. Stupid comment!!

 

[Anonymous]

depends on the foot print of the product is it new to market is it disposable, is the company trying to be sold. Many factors. I will not take on a line that will pay less than 10% . I have had lines as high as 40% and spiffs 50% if we can sell in first 90 days. Takes a special person to be successful as 1099 . There are 1099's everywhere, how many maintain lines and earn money ... not too many. But hey you don't know what you don't know

 

[Anonymous]

What is the usual rate for a commission only 1099 position through a distributor? I have only worked for direct sales companies. I've heard as high as 50% but I think around 25% is the norm.

25% - 35% is the norm. I pay a 35% recurring commission for disposables.

Why would you go to jail for selling pain creams. Stupid comment!!

It's not stupid. I can think of three reasons:

1. Paying the prescribing physician a portion of the commissions under the table (criminal and civil violation of the anti-kickback statute);
2. Paying the prescribing physician to enroll the patient in an "outcomes study" (criminal and civil violation of the anti-kickback statute); or,
3. The rep is getting paid commissions on a 1099 basis, and the patient being provided the pain cream is insured through a federally funded program, such as Tricare or Medicaid (criminal and civil violation of the anti-kickback statute; and, fee splitting between the pharmacy and the sales rep).

Reason #3 is probably the least understood and the most common. The 1099 rep is being paid a percentage of government dollars reimbursed the pharmacy, based solely upon the value and/or volume of services rendered.

 

[Anonymous]

25% - 35% is the norm. I pay a 35% recurring commission for disposables.



It's not stupid. I can think of three reasons:

1. Paying the prescribing physician a portion of the commissions under the table (criminal and civil violation of the anti-kickback statute);
2. Paying the prescribing physician to enroll the patient in an "outcomes study" (criminal and civil violation of the anti-kickback statute); or,
3. The rep is getting paid commissions on a 1099 basis, and the patient being provided the pain cream is insured through a federally funded program, such as Tricare or Medicaid (criminal and civil violation of the anti-kickback statute; and, fee splitting between the pharmacy and the sales rep).

Reason #3 is probably the least understood and the most common. The 1099 rep is being paid a percentage of government dollars reimbursed the pharmacy, based solely upon the value and/or volume of services rendered.

Ovecourse any sales rep paying dr.s selling any product would go to jail. So selling pain creams isn't going to put you in jail. You are wrong on #3. Every large Ortho company pays their distributors 1099. As long as your company meets all other safe harbors you are fine. Spend some $$ and consult a top healthcare attorney, I did.

 

[Anonymous]

You are wrong on #3. Every large Ortho company pays their distributors 1099. As long as your company meets all other safe harbors you are fine. Spend some $$ and consult a top healthcare attorney, I did.

I am not wrong on #3.

It is legally kosher for the ortho company to pay their distributor commissions on a 1099 basis. This is because the distributor is not billing a federally funded health insurance program. The distributor is selling their devices to the physician or hospital, and in turn, the physician or hospital is billing for the ortho device.

Now, compare and contrast that to the pharmacy that is billing a federally funded health insurance program, then splitting a portion of the amount reimbursed with the 1099 ISR sales rep.

Nevertheless, I agree with your suggestion: "Spend some $$ and consult a top healthcare attorney, I did."

You may want to read the following, from a well known attorney who specializes in healthcare law:
http://www.medtrade.com/news/genera...utm_term=8333315&utm_content=#sthash.trC0Usmx

Here is the take-away:


"The Medicare anti-kickback statute prohibits offering, paying, soliciting, or receiving any remuneration in exchange for referring (or arranging for the referral of) a patient to a person or entity for any Medicare-covered item or service or in exchange for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any Medicare-covered item or service."

Although this article is focused on DME suppliers who bill federally funded programs, substitute a DME supplier for a pain cream pharmacy that pays commissions on a 1099 basis to an ISR. The commissions paid the 1099 ISR are a portion of the amount reimbursed by a federally funded health insurance program.

the following text from the article should now be read in context, again, substituting "pain cream pharmacy" for a "DME supplier":

"And so while it is permissible for a DME supplier to pay commissions to a bona fide employee who generates business to the supplier (in which the payer is a government program), it is a violation of the kickback statute if the supplier pays commissions to a 1099 independent contractor who generates business to the supplier (in which the payer is a government program).

The anti-kickback statute cuts both ways: the payer of the money (the DME supplier) and the recipient of the money (the 1099 independent contractor) are both liable under the statute, which is a criminal statute.

"

The pain cream pharmacy that pays a 1099 ISR commissions, based upon a percentage of the amount reimbursed by a "government program," is as illegal as the day is long. Both the pharmacy and the 1099 ISR are vulnerable. Think about commissions being paid the 1099 ISR, for the referral of a Tricare or Medicaid insured patient to the pain cream pharmacy.

 

[Anonymous]

25% - 35% is the norm. I pay a 35% recurring commission for disposables.



It's not stupid. I can think of three reasons:

1. Paying the prescribing physician a portion of the commissions under the table (criminal and civil violation of the anti-kickback statute);
2. Paying the prescribing physician to enroll the patient in an "outcomes study" (criminal and civil violation of the anti-kickback statute); or,
3. The rep is getting paid commissions on a 1099 basis, and the patient being provided the pain cream is insured through a federally funded program, such as Tricare or Medicaid (criminal and civil violation of the anti-kickback statute; and, fee splitting between the pharmacy and the sales rep).

Reason #3 is probably the least understood and the most common. The 1099 rep is being paid a percentage of government dollars reimbursed the pharmacy, based solely upon the value and/or volume of services rendered.

If you can't flip a Dr without having to pay him, you shouldn't be in medical sales. If I do a case with a Dr and his patient has Medicare/medicaid, aren't I essentially being paid a percentage of government dollars when I submit my bill only to the hospital?

 

[Anonymous]

I am not wrong on #3.

It is legally kosher for the ortho company to pay their distributor commissions on a 1099 basis. This is because the distributor is not billing a federally funded health insurance program. The distributor is selling their devices to the physician or hospital, and in turn, the physician or hospital is billing for the ortho device.

Now, compare and contrast that to the pharmacy that is billing a federally funded health insurance program, then splitting a portion of the amount reimbursed with the 1099 ISR sales rep.

Nevertheless, I agree with your suggestion: "Spend some $$ and consult a top healthcare attorney, I did."

You may want to read the following, from a well known attorney who specializes in healthcare law:
http://www.medtrade.com/news/genera...utm_term=8333315&utm_content=#sthash.trC0Usmx

Here is the take-away:


"The Medicare anti-kickback statute prohibits offering, paying, soliciting, or receiving any remuneration in exchange for referring (or arranging for the referral of) a patient to a person or entity for any Medicare-covered item or service or in exchange for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any Medicare-covered item or service."

Although this article is focused on DME suppliers who bill federally funded programs, substitute a DME supplier for a pain cream pharmacy that pays commissions on a 1099 basis to an ISR. The commissions paid the 1099 ISR are a portion of the amount reimbursed by a federally funded health insurance program.

the following text from the article should now be read in context, again, substituting "pain cream pharmacy" for a "DME supplier":

"And so while it is permissible for a DME supplier to pay commissions to a bona fide employee who generates business to the supplier (in which the payer is a government program), it is a violation of the kickback statute if the supplier pays commissions to a 1099 independent contractor who generates business to the supplier (in which the payer is a government program).

The anti-kickback statute cuts both ways: the payer of the money (the DME supplier) and the recipient of the money (the 1099 independent contractor) are both liable under the statute, which is a criminal statute.

"

The pain cream pharmacy that pays a 1099 ISR commissions, based upon a percentage of the amount reimbursed by a "government program," is as illegal as the day is long. Both the pharmacy and the 1099 ISR are vulnerable. Think about commissions being paid the 1099 ISR, for the referral of a Tricare or Medicaid insured patient to the pain cream pharmacy.

Really, you linked to a paid advertisement by an attorney with his contact info so he can get business from his "expert" opinion. Dude, you are just plain wrong. One obscure attorney opinion in hillbilly Texas does not make it factual. As I said, as long as you meet all safe harbors you are fine. And I am basing this off the opinion of one of the top healthcare attorneys/practices in N.Y.C. and a 2nd opinion from a practice in Boston. Think I will trust my guys.

 

[Anonymous]

Really, you linked to a paid advertisement by an attorney with his contact info so he can get business from his "expert" opinion. Dude, you are just plain wrong. One obscure attorney opinion in hillbilly Texas does not make it factual. As I said, as long as you meet all safe harbors you are fine. And I am basing this off the opinion of one of the top healthcare attorneys/practices in N.Y.C. and a 2nd opinion from a practice in Boston. Think I will trust my guys.

Poster #8 you are a schmuck. Pain cream boy, you have your hand so far in the cookie jar you don't know where it starts or ends. Keep on with the good life son but don't say you were not warned. Pain creams are the new tens units. doc and dme make a killing, patient does not get any better. Look at the tens business today compared to 5-8 years ago. Same thing is going to happen to cream but much faster.

Go get em tiger and stop snorting your best friend pain management doc percs scripts he is giving you in return for his cut of the creams , your judgment is getting cloudy.

 

[Anonymous]

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