The split billing option for postoperative care opened the door to postoperative comanagement in eye care and threw ophthalmic practices into murky waters that continue to bedevil them. Here is our attempt to make those waters clear — and to keep ophthalmic surgeons out of trouble.

HOW WE GOT HERE

In 1992, the Centers for Medicare and Medicaid Services (CMS) identified global surgery packages for major surgeries, including ophthalmic ones. CMS classified ophthalmic surgery as a major surgery based on its designated number of postoperative days — in this case, 90 days total. Global surgeries include preoperative, intraoperative and postoperative services, which can be billed together or separately.

When splitting the global surgeries for billing purposes, postoperative services are valued at 20% of the total global cost, while preoperative and intraoperative services are valued at 80%. Providers indicate the split by using CPT code modifiers 54 (surgical care component) and 55 (postoperative care component). This split billing option has opened the door for postoperative comanagement in the eye-care industry. It was not until 1999, however, that the Office of the Inspector General (OIG) provided any guidance on comanagement, and 2011 when an OIG advisory opinion surfaced: OIG Advisory Opinion No. 11-14.¹

This past year, the eye-care industry further clarified the murky waters of comanagement, but comanagement arrangements still require careful navigation to avoid lurking anti-kickback statute (“AKS”) violations.

COMANAGEMENT GENERALLY

The American Academy of Ophthalmology (AAO) defines comanagement as “a relationship between an operating ophthalmologist and a nonoperating practitioner for shared responsibility in the [patient’s] postoperative care when the patient consents in writing to multiple providers, the services being performed are within the providers’ respective scope[s] of practice and there is [a] written agreement between the providers to share patient care.” The prevalence of comanagement relationships is increasing nationwide as numerous baby boomers age, thereby raising the demand for cataract surgeries.² But these relationships are fraught with risks under AKS, as the statute essentially prohibits offering, paying, soliciting or receiving anything of value to induce or reward referrals or general federal health-care program business (42 U.S.C. § 1320a-7b(b)).

FIND YOUR WAY TO SAFE HARBORS

AKS provides two potentially applicable safe harbors for comanagement arrangements: (1) personal services contracts, and; (2) referral arrangements for specialty services (42 CFR § 1001.952(d), (s)). Personal services contracts and referral arrangements are excluded from the definition of “remuneration” under AKS, so long as applicable standards are met.

To meet the requirements for a personal services contract, the agreement must comply with seven standards, as follows:

1. Be in writing and signed by both parties
2. Specify the services to be provided
3. Provide either for (i) full-time status or (ii) part-time status with a specified schedule
4. Be for one year or more
5. Provide compensation that is (i) set in advance, (ii) at fair market value, (iii) and does not take referrals into account
6. Be for services that do not violate the law
7. Be commercially reasonable.

The personal services contract safe harbor protects certain agency relationships. Under the safe harbor, compensation paid by a principal (i.e., the ophthalmologist) to an agent (i.e., the optometrist) for his/her services, pursuant to a personal services contract, is not considered remuneration; thus, this is not activity for which an individual might be liable under AKS. Accordingly, these types of contracts are suitable for optometrists who will provide services for compensation by an ophthalmologist as an independent contractor. This safe harbor, however, is not appropriate for outside comanagement arrangements.

For optometrists performing services outside of the ophthalmologist’s office or otherwise not performing services for the ophthalmologist for compensation, the elements of the referral arrangement safe harbor must be met to avoid liability under AKS. The referral arrangement safe harbor requires meeting these standards:

• Clinical appropriateness for the mutually agreed upon time or circumstance to refer a patient back to the originating provider;
• The service for which the referral is made is not within the medical expertise of the referring provider but is within the special expertise of the party receiving the referral;
• The parties receive no payment from each other and do not share or split a global fee from any federal health-care program for the services provided to the referred patient; and
• Unless both parties belong to the same practice, the only exchange of value between the parties is remuneration received from third-party payers or the patient individually.

So long as these standards are met, a referral arrangement does not constitute remuneration under AKS.

OIG GUIDANCE

In 2000, one year after OIG revised the referral arrangement safe harbor, OIG added to it the third standard as a strong stance against the seemingly routine agreements between ophthalmologists and optometrists to split global fees. OIG expressly acknowledged that the referral arrangement safe harbor does not protect referral arrangements whereby the parties bill Medicare using the 54/55 modifiers to indicate an 80/20 split of the global fee for cataract surgery.³ OIG did not declare such arrangements as illegal per se. Instead, OIG stated that these arrangements would be analyzed on a case-by-case basis. Such analysis would depend on elements such as medical necessity, clinical appropriateness of referral timing and whether the services performed commanded the commensurate global fee payment.

In Advisory Opinion No. 11-14, dated Oct. 7, 2011, the OIG expressly permitted a comanagement arrangement involving patients who received conventional and premium IOLs who chose to return to their referring optometrists for their postoperative care.¹ Specifically, OIG determined that the following arrangement did not constitute remuneration under AKS: An arrangement in which a Medicare beneficiary elects to receive a premium IOL (instead of a conventional one) for his/her cataract surgery, for which Medicare will pay for the surgery and the amount of the conventional IOL; but the beneficiary is responsible for the difference in cost between the conventional and premium IOL, the professional and facility fees related to the additional testing and other services related to the correction of refractive errors — as typically required for fitting and inserting premium IOLs.

This 2011 advisory opinion indicates that an arrangement in which an optometrist may earn a fee for services not covered by the Medicare program, in connection with comanagement of a patient, is permitted. OIG found several facts to be persuasive in its determination.

First, no written or unwritten agreements existed between the providers to comanage patients. Second, the ophthalmologist informed patients that if they returned to their optometrist for postoperative care, the optometrist might charge them for services not covered by Medicare that the optometrist deemed necessary. Third, the arrangement did not increase costs to the Medicare program. And finally, the ophthalmologist certified that he/she would transfer the patient back to his/her optometrist only upon the patient’s request.

EYE-CARE INDUSTRY GUIDANCE

From 1992 to 2015, the federal government released scant comanagement guidance. The eye-care industry attempted to captain the comanagement ship, but the industry’s guidance was inconsistent at best. In 2000, one year after OIG revised the referral arrangement, ASCRS published a joint paper titled “Ophthalmic Postoperative Care.”⁴ It declared that comanagement should be undertaken only as an exceptional occurrence. Both AAO and ASCRS advocated that providers only comanage patients’ postoperative care in which justifiable circumstances existed. Such circumstances included the surgeon’s unavailability or the patient’s inability to travel to the surgeon’s office.

That same year, The American Optometric Association (AOA) published a paper titled “Optometric Postoperative Care,” refuting AAO’s and ASCRS’s stance on comanagement.⁵ The paper claimed that AAO and ASCRS’s position on comanagement lacked support from ethics rules, federal laws or federal guidance. Instead, AOA suggested certain guidelines be followed to meet objectives related to the basic tenets of good patient care, ethics and laws. Five years later, AAO and ASCRS developed a more flexible and patient choice-centered approach to comanaging patient care in their joint position paper.⁶

The OIG’s 2011 advisory opinion and the conflicting industry guidance published between 2000 and 2015 hardly clarified OIG’s 1999 regulations and guidance. It was not until 2016 that AAO compiled its “Comprehensive Guidelines for Comanagement of Ophthalmic Postoperative Care.”⁷

Building on its joint position paper, AAO provided detailed circumstances for which comanagement may be appropriate. This time, approximately 70 industry-related associations backed the guidance, and the eye-care industry effectively demonstrated unity in its approach to comanagement. AOA and ASCRS are notably missing from the list of signing organizations. OM

ALIGNING FEDERAL LAW WITH OIG’S AND EYE-CARE INDUSTRY’S GUIDANCE

Now that industry comanagement guidance exists, aligning the safe harbor standards with such guidance is key to successfully establishing a comanagement relationship. Personal services contracts and documents governing any referral arrangement must be drafted carefully to meet the appropriate AKS safe harbor — depending on whether the arrangement would require a written agreement. Also, patient consents, transfer agreements, protocols, policies, and procedures should adequately reflect the AAO’s most recent guidelines. Ophthalmologists and optometrists wishing to engage in a comanagement arrangement should consult legal counsel to decrease exposure under AKS, align their arrangements with industry guidelines, and meet patient care standards. OM

REFERENCES

1. Department of Health and Human Services. Office of the Inspector General. OIG Advisory Opinion No. 11-14. https://oig.hhs.gov/fraud/docs/advisoryopinions/2011/advopn11-14.pdf
2. Gollogly HE, Hodge DO, St. Saauver JL, Eric JC. Increasing incidence of cataract surgery: Population-based study. J Catar Refrac Surg. 2013;39:1383–1389.
3. Department of Health and Human Services. Office of Inspector General. https://www.gpo.gov/fdsys/pkg/FR-1999-11-19/pdf/99-29989.pdf . Accessed Jan. 25, 2018.
4. American Society of Cataract and Refractive Surgery. Ophthalmic Postoperative Care. http://www.ascrs.org/sites/default/files/resources/Joint%20ASCRSAAO%20Comanagement%20Guidelines.pdf . Accessed Jan. 24, 2018.
5. American Optometric Association. Optometric Postoperative Care. https://www.aoa.org/Documents/about/06b_Other_AOA_Postoperative_Care_Position_Paper.pdf . Accessed Jan. 24, 2018.
6. ASCRS. Ophthalmic Postoperative Care: A Joint Position Paper of the American Academy of Ophthalmology and the American Society of Cataract and Refractive Surgery. http://www.ascrs.org/sites/default/files/resources/ComanagementJointPositionPaperSept2015.pdf . Accessed Jan. 24, 2018.
7. American Academy of Ophthalmology. Comprehensive Guidelines for the Comanagement of Ophthalmic Postoperative Care. Sept. 7, 2016. https://www.aao.org/ethics-detail/guidelines-comanagement-postoperative-care . Accessed Jan. 24, 2018.

About the Author

Anne M. Brendel, Esq., is an attorney at Buchalter’s Los Angeles office and is a member of the firm’s Health Care Practice Group. She focuses her practice on regulatory and transactional matters affecting a variety of health-care industry clients, including hospitals, physician groups, ambulatory surgery centers, telehealth companies, health plans and individual providers.