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Professional courtesy
The policy cannot be limited to those who are likely referral sources.
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Quality Ophthalmology, PC (P.C.) extends professional courtesy discounts to ophthalmologists and optometrists who are in active practice within a 50-mile radius of P.C., as well the families of these providers. P.C.’s professional courtesy policy consists of waiving any coinsurance obligation that an ophthalmologist, optometrist or family member may be required to pay by Medicare or any private third-party payer (ie, “insurance-only” billing). Some, but not all, of the recipients of P.C.’s professional courtesy policy refer patients to P.C.
Does P.C.'s professional courtesy policy place the practice at risk?
Professional courtesy may raise fraud and abuse concerns, particularly where recipients of professional courtesy are selected in a manner that directly or indirectly takes into account their ability to affect referrals, or otherwise generate business for the physician offering the free or discounted service. Where Medicare services are involved, both the federal Anti-Kickback Statute and the Patient Inducement Prohibition may be implicated. If the professional courtesy extends to services paid for by commercial insurers, state anti-kickback and insurance fraud laws may be triggered.
In its Model Compliance Program for Individual and Small Group Physician Practices, the Office of the Inspector General set forth guidance regarding professional courtesy. According to the OIG, a physician’s risk of violating the federal Anti-Kickback Statute is reduced significantly when a physician has a regular and consistent policy of extending professional courtesy to both referral and non-referral sources and in a manner that does not take ability to refer into account.
In fact, the OIG stated that physicians who regularly waive the entire service fees or insurance copays to a group of persons might not implicate the fraud and abuse laws. These waivers are acceptable as long as membership in the group receiving the courtesy is not based on a person’s ability to refer patients to the physician either directly or indirectly. The legality of any professional courtesy arrangement, however, will depend on the specific facts presented, and with respect to allegations that a physician violated the Anti-Kickback Statute, on the specific intent of the parties involved.
Aside from the issue of whether the Anti-Kickback Statute is triggered, the OIG made it clear in the Model Program, and again in a 2001 Advisory Opinion, that except in circumstances of documented patient financial hardship, any waiver of a Medicare copayment is viewed as an improper patient inducement because it is likely to influence a beneficiary’s decision as to where to receive services.
P.C.’s professional courtesy policy raises some concern and should be modified. The government could allege that by extending professional courtesy only to those ophthalmologists and optometrists in active practice located within a 50-mile radius of P.C., the policy is designed to limit professional courtesy to those who are likely to be referral sources. The policy instead should eliminate any geographic restrictions, and should apply equally to all physicians and optometrists, regardless of whether they are in active practice or retired. Further, P.C’s policy of insurance-only billing runs the risk that it may run afoul of the Patient Inducement Prohibition. P.C. could eliminate this risk by implementing a policy to waive the entire fee rather than the just any requisite copayments. Insurance-only billing should be limited to financial, not courtesy, considerations.