The federal anti-kickback statute and surgical comanagement

Issue: March 2001

ByKathy J. Tayon, Esq.

For many years, ophthalmologists and optometrists have been comanaging the care delivered to eye surgery patients, now most commonly for cataract surgery and corrective laser vision procedures. The federal anti-kickback statute comes into play when a governmental payer is paying for that care. In addition to federal-level implications, ophthalmologists and optometrists who comanage must also address applicable state health care laws and clinical care concerns.

The federal anti-kickback statute prohibits a payment or other remuneration in return for or to induce the referral of a patient for services that may be paid for by Medicare, Medicaid or certain other governmental health care programs.

In November 1999, concerns that this statute may be violated when an ophthalmologist and optometrist comanage a Medicare patient were heightened when the Health Care Finance Administration (HCFA) issued final federal anti-kickback safe harbor regulations that provide a safe harbor for “referral agreements for specialty services.” This safe harbor requires, among other criteria, that there be no sharing or splitting of a global fee and that the referral back to the original provider must occur at a clinically appropriate time.

Policy statements

Attention to comanagement was also amplified in February 2000 when the American Academy of Ophthalmology (AAO) and the American Society of Cataract and Refractive Surgery (ASCRS) issued a joint policy statement. Theirs was followed by statements from the Society for Excellence in Eye Care (SEE) and the American Optometric Association in April 2000, the Outpatient Ophthalmic Surgery Society in June 2000, the American College of Eye Surgeons in July 2000 and the International Society of Refractive Surgery in October 2000.

The AAO/ASCRS policy statement referenced potential fraud and abuse and ethical concerns with comanagement and recommended very restrictive guidelines for entering into comanagement arrangements. The policy statement says that it is anticipated that comanagement would be “an exceptional, rather than a routine, occurrence, and that the comanagement must not be done as a matter of routine policy on all patients.”

SEE’s policy statement, although far less restrictive than the AAO/ASCRS policy statement, also states that “comanagement arrangements should not be driven by financial considerations and that ophthalmologists should not enter into agreements for the routine referral of patients.”

Typically, when an ophthalmologist and optometrist comanage the care of a cataract surgery patient, the ophthalmologist will provide — and bill Medicare for — the surgery, and the optometrist will provide — and bill Medicare for — the postoperative care. Such a scenario will not satisfy the newly issued federal anti-kickback safe harbor for “referral agreements for specialty services,” because a global fee is split between the ophthalmologist and optometrist. (Note that the federal anti-kickback statute is only implicated if Medicare, Medicaid or some other federal or state funds are the source of payment for the professional care.)

The fact that the “referral agreements for specialty services” safe harbor is not satisfied does not necessarily mean a comanagement relationship violates the federal anti-kickback statute. Rather, it means the arrangement will not be presumed to be legal and further analysis should be done to determine whether a federal anti-kickback violation exists.

Blanket referral arrangements

Clearly, “blanket” referral arrangements will violate the federal anti-kickback statute, as such arrangements arguably indicate that economic conditions — and not patient considerations — are influencing the ophthalmology practice’s referrals to the optometrist.

The ophthalmology practice implementing a meaningful “patient choice program,” however, arguably helps minimize concerns that the federal anti-kickback statue is violated. This program would give the patient the right to decide whether to participate in comanagement, subject to the operating surgeon’s determination that comanagement does not compromise the patient’s best medical interest.

Under the patient choice program, the patient is told that, if clinically appropriate, he or she has the option of having the postoperative portion of care delivered either by the referring optometrist or the ophthalmologist. He or she is also told the credentials of both. Even if the patient chooses comanagement, it is not employed if a complication arises following the surgery or if the medical condition requires treatment by the operating surgeon. To the extent that comanagement is employed, the ophthalmologist bills Medicare for the surgical portion of the care, and the optometrist bills Medicare for the postoperative portion of the care.

HCFA’s “referral agreements for specialty services” safe harbor still will not be satisfied even if a meaningful patient choice program is in place because the global fee is being split. The following facts, however, arguably indicate that the federal anti-kickback statute is not violated when a meaningful patient choice program is in place:

there is no “blanket” referral arrangement in place between the ophthalmology practice and optometrists;
to the extent that comanagement is employed, it is because the patient chooses it; and
even if the patient chooses comanagement, such care will only be employed if clinically appropriate.

Patient choice

Meaningful patient choice appears to be significant because it arguably negates any notion that the ophthalmologist referred the patient to the optometrist for the postoperative care in exchange for the optometrist referring the patient to the ophthalmologist for the surgery. Meaningful patient choice shows that the patient returned to the optometrist for the postoperative care because the patient desired to have his or her care comanaged after being informed of the alternatives.

Accordingly, to the extent a meaningful patient choice program is implemented, there is some comfort that a governmental agency would conclude that the federal anti-kickback statute is not violated when comanagement occurs. It is important that both the ophthalmologist and optometrist maintain documentation with respect to the policies and procedures of the patient choice program. Additionally, both practitioners should maintain documentation of the information presented to the patient and the choice the patient makes.

In addition to the federal anti-kickback statute, all applicable federal and state health care laws and patient care issues must be considered when comanagement occurs.

Comanagement and cataract surgery

Cataract surgeries are typically covered by Medicare. In cases of comanagement, the ophthalmologist with a meaningful patient choice program in place arguably helps minimize the risk — for both the ophthalmologist and optometrist — of violating the federal anti-kickback statute.

Comanagement and laser vision correction

Laser vision correction procedures/surgeries are not presently covered by any governmental payers. Accordingly, comanagement of these patients does not implicate the federal anti-kickback statute. However, applicable state health care laws still must be considered. Each state has its own unique set of health care laws, and practitioners should become familiar with these laws before undertaking comanagement.

Relevant laws include anti-kickback laws, fee-split laws, patient brokering laws, self-referral laws and corporate practice of medicine or optometry laws. Depending on the state where the comanagement relationship is occurring and the structure of the relationship, one or more of the state’s laws will typically apply to the comanagement relationship.

As a practical matter, comanagement that does not involve a federal payer may present more risks for the comanaging eye care providers. This is because there generally tends to be less guidance at the state level regarding the lawfulness of comanagement relationships as compared to the guidance that has been promulgated with respect to the federal anti-kickback statute, vis a vis cataract surgeries.

For example, if Medicare is paying for a cataract surgery, Medicare dictates what the operating ophthalmologist will receive for the procedure and what the comanaging optometrist will receive for the postoperative care. When no government payer is involved, it is not uncommon to see ophthalmologists and optometrists splitting the global fee in different percentages as compared to the methodology Medicare uses.

This does not necessarily mean the comanagement relationship is illegal; a variety of factors would need to be considered. One factor is whether a provider is treating patients of different payer classes disparately — this would indicate that unlawful behavior may be occurring.

Comanagement implicates a host of federal and state health care laws and clinical care concerns. Before participating, ophthalmologists and optometrists must analyze it from a legal perspective and feel comfortable that the relationship complies with applicable federal and state health care laws and adequately addresses clinical care issues.

For Your Information:

Kathy J. Tayon, Esq., is a partner in the health care department of McDermott, Will & Emery and is a Florida board-certified health care attorney. She can be reached at 201 South Biscayne Blvd., 22nd Floor, Miami, FL 33131-4336; (305) 347-6544; fax: (305) 347-6500.