Avoid major regulatory and legal mistakes in operating practice

These top 10 missteps can result in serious consequences for the physician but can be easily avoided.

Alan E. Reider

This article, highlighting the top 10 legal and regulatory problems found in ophthalmology practices, is based on a presentation made at the Hawaiian Eye 2007 meeting and reflects conduct that, in some cases, resulted in serious consequences for the physician.

Problem 1: Failure to have the patient fill out and sign a patient history and activities of daily living form

There have been a number of recent prosecutions of physicians where questions have been raised about the integrity of the patient history and activities of daily living form. In some of those cases, patients denied making statements about family history of disease or difficulty in pursuing activities of daily living that were reflected in the patients� records. In one case, a physician accused of fraud was acquitted when the patients were presented with their signed statements and then admitted that their prior testimony was false.

A patient�s family history or complaints of pursuing daily living activities may justify the performance of certain diagnostic tests or procedures. As a result, the integrity of the record becomes a critical element in any analysis. Having the patient sign this document can serve to protect a physician should any questions arise and should be a relatively easy procedure to implement.

Problem 2: Altering medical records and failing to follow protocol

A patient�s medical record serves many purposes; not only is it critical for assuring appropriate patient care, but it also serves as a foundation to justify services performed by the physician and to be reimbursed by Medicare or third-party payors. The integrity of the medical record, therefore, is critical. It should be clear to all physicians that medical records should be altered only to assure the accuracy of those records, and when any alteration is made, physicians should follow standard protocol by crossing out the inaccurate language, inserting accurate language and being sure to initial and date these changes so anyone reviewing the record will be able to understand precisely what was done. Failure to follow this protocol raises serious questions about the integrity of the record and will be viewed by payors, as well as enforcers, as falsifying documentation to justify reimbursement.

Problem 3: Failing to know your Medicare carrier or insurer standards for medical necessity

Medicare carriers and other third-party insurers often develop internal guidelines to determine the medical necessity of procedures in order to justify reimbursement. To the frustration of many physicians, oftentimes these standards vary among the payors. Nevertheless, it is a physician�s obligation to understand the criteria that are applied and to follow those standards when submitting claims for reimbursement.

Many physicians believe that by following professional society guidelines, such as Preferred Practice Patterns, they are operating at no risk. While application of Preferred Practice Pattern standards are certainly appropriate from a medical perspective, they may not be appropriate from a reimbursement perspective. Physicians have an obligation to understand the criteria applicable to their carriers and insurers and to follow those criteria when submitting claims for payment.

Problem 4: Failure to follow the rules for non-Medicare payors to the same degree as for Medicare patients

For years, most practices have been vigilant when submitting claims for payment to the Medicare program, recognizing the risk in failing to follow appropriate protocol. Unfortunately, that vigilance was not always followed to the same degree when the payor was a private insurer. While historically the risk of enforcement action relating to claims submitted to private insurers was significantly less than for claims submitted to the Medicare program, that is no longer the case. Indeed, several recent prosecutions of ophthalmologists have been based on the 1996 statute that made health care fraud a federal crime and subject to the jurisdiction of the U.S. Attorney�s Offices and the Department of Justice. Physicians must follow applicable standards whenever submitting claims to private third-party payors, just as they do when submitting claims for Medicare reimbursement.

Problem 5: Accepting a consultant fee that does not conform to fair market value

Many ophthalmologists are engaged in a variety of consulting agreements with hospitals, surgery centers, pharmaceutical and medical device companies, and others for the purpose of providing bona fide needed services. Occasionally, however, these consulting agreements are nothing more than a mechanism to �reward� those physicians who are major referral sources to a facility or who prescribe a particular drug or device to their patients.

Federal prosecutors are becoming more aggressive in pursuing such inappropriate relationships, and any physician who has a consulting agreement should be certain not only that the services are necessary and are performed, but also that the payment for those services reflects fair market value.

Problem 6: Implementing an aggressive co-management arrangement

Co-management arrangements have been controversial for more than 20 years. Those who support co-management argue that patients have the right to choose their caregiver, as long as their caregiver is licensed to perform the relevant services and as long as certain guidelines are followed. Critics allege that co-management is nothing more than a disguised kickback arrangement.

While Medicare guidelines restrict the potential for abusive co-management arrangements, it appears that some physicians believe that, because refractive procedures are not covered by federal law, there are no guidelines and, consequently, no risk for any potential sanction. This belief is wrong. State laws impose similar limitations as the federal law. Further, where refractive surgery co-management partners also are responsible for referring patients covered by Medicare for other unrelated services, the federal law may be implicated.

There are several common pitfalls we see with co-management arrangements. They include:

• Failure to assure informed patient choice, ie, failing to be certain that patients understand and elect co-management arrangements;
• Payment of an unreasonably high co-management fee; and
• In the case of implanting a presbyopia-correcting IOL relating to a covered cataract surgery, payment of an additional co-management fee despite the fact that there were no additional services performed by the co-manager
• A co-manager who performs additional services relating to the implant of a presbyopia correcting-IOL is entitled to additional payment; a co-manager who performs no additional services is not.

Despite the limited enforcement action taken to date, co-management continues to be a serious controversy. We are aware of a growing list of enforcement cases at the federal, state and professional society levels. Physicians should be certain to follow appropriate guidelines.

Problem 7: Failure to treat off-label use appropriately

Off-label use is a recognized and accepted practice in the medical community; in some cases, the off-label use of drugs or devices has become more prevalent than the labeled indication. Nevertheless, physicians still should be sensitive to potential risks whenever using a drug or device on an off-label basis. For example, while there may be medical support for the propriety of a particular off-label use, failure to provide notice to the patient may increase the risk of malpractice for failing to obtain a patient�s informed consent. In fact, some insurers may require obtaining informed consent in such cases, and failure may result in a denial of coverage.

In addition, recently there have been a number of cases where physicians have been accused of making false claims when using a drug or device on an off-label basis. In these cases, the payor alleged that it would not recognize the propriety of the service on an off-label basis. It is critical, therefore, for physicians to understand the rules applied by payors in connection with off-label use.

Problem 8: Attempting to obtain informed consent from patients while their eyes are dilated

We have worked with a number of practices that have developed efficient and streamlined processes in connection with their surgical patients. Several practices combine the informed consent process with the overall examination, and as a result, patients may be asked to watch an informed consent video or review an informed consent document after their eyes have been dilated.

As anyone whose eyes have been dilated knows, the ability to see a video or, more significantly, read a document may be impaired, making it difficult to view a video or read a document. If the patient is a cataract surgery candidate, the difficulty in viewing or reading is even more pronounced. Physicians should take steps so that patients whose eyes have been dilated receive adequate assistance in order to reduce the risk that the patient will claim that he or she was not able to see adequately to provide proper informed consent.

Problem 9: Failure to respond to a request for records from Medicare or an insurer

As a condition of participation in virtually any third-party payor program, physicians agree to provide copies of patient records to document the services performed. We have seen several practices where requests for records have gone unanswered, apparently with the hope that they will simply go away. You can be certain that they will not.

At a minimum, failure to provide documentation in response to a request will result in a denial of the claim submitted. Once a denial has been made, a repayment will be demanded, and while there may be appeal rights, it will be more difficult to reverse a denial than it would have been to justify the payment in the first place. Further, if records are submitted after a denial has been issued, there will be the question as to whether the records existed at the time the request was made. This risks a potentially more serious allegation that the medical records were created after the fact, an allegation that carries with it far more serious sanctions.

The simple lesson is to respond promptly whenever a payor requests your records.

Problem 10: Talking to an investigator

We have written articles in prior issues of Ocular Surgery News relating to the rights of individuals when investigators visit and ask for information. We have always counseled that you should not speak with an investigator, as you may not understand the basis for the inquiry and serious ramifications may result if incorrect information is provided or, in the alternative, if you do not appreciate that your statements may support action taken against you.

We realize that there is a great temptation to speak with an official who appears to be requesting seemingly harmless information. Often the investigator will be friendly and non-threatening, and the natural inclination is to be helpful, presuming that the problem, if one exists, will go away.

However, investigators are trained to obtain information and will try to do so without the need for formal process. We are aware of at least one case where an employee of a medical practice decided to provide information to the investigators, confident that when providing this information, the problem would disappear. This employee was half right; based on the information provided, the investigators concluded that there was no problem with the physician, but decided to take action against the employee.

The lesson is simple: Do not speak with an investigator.

For more information:

• Alan E. Reider, JD, can be reached at Arent Fox LLP, 1050 Connecticut Ave. NW, Washington, DC 20036; 202-857-6462; fax: 202-857-6395; e-mail: reider.alan@arentfox.com.