The frequency with which ophthalmologists and optometrists refer patients to one another has often led to regulatory scrutiny of financial relationships between these professionals.

In recent years, this scrutiny has come from government enforcement officials such as the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services, the Department of Justice and United States Attorney Offices as well as from whistleblowers who believe some of the relationships between ophthalmologists and optometrists raise significant fraud and abuse concerns under the federal Anti-Kickback Statute (AKS). The AKS makes it a crime to knowingly offer, give, seek or receive something of value in return for or to induce referrals for items or services that are paid for by federal health-care programs.

With such serious consequences — the AKS carries criminal penalties — it is imperative clinicians understand what constitutes a kickback and the danger zones in their own specialty. Here is our attempt to provide some crucial clarity.

COMANAGEMENT AND EYE CARE

At the heart of many of the concerns lies comanagement, a well-tried patient care model utilized in many surgical specialties.

Comanagement is a form of shared patient care, under which a surgeon and a second qualified practitioner share the postoperative care of a single patient during the global period of a surgical procedure. In other specialties, such as cardiovascular surgery, comanagement often takes place within the surgical practice between surgeon and a physician assistant or nurse practitioner.

Comanagement in eye care differs in that the surgeon and the non-operating practitioner typically are not members of the same practice and the global fee for the surgical procedure (which includes compensation for preoperative evaluation, the surgical procedure and follow-up care during the defined postoperative period) is apportioned between the two providers to reflect the extent of care performed by each. This necessarily creates a financial relationship between the referral sources.

Under federal Medicare policy, regulators have made clear that comanagement should be considered based on clinical indications and never because of economic considerations such as inducement for surgical referrals or potential additional remuneration from the co-managing provider. Comanagement arrangements should be conducted pursuant to written informed patient consent, and a transfer of care should only be made when a patient’s clinical status suggests it may be done so safely.

Novitas, a Medicare Administrative Contractor, has identified where comanagement might be appropriate (https://tinyurl.com/2p88jm3c ).

THE COMPLICATIONS

Cataract surgery

Importantly, in the case of comanagement of cataract surgery, the surgeon and co-manager submit their own claims for payment from Medicare. The professional surgical fee is apportioned approximately 80% to the preoperative work-up and surgical procedure and 20% for postoperative care. Because there is no exchange of money between the parties, the risk of AKS concerns historically have been relatively low. Today, however, whistleblowers and the government alike are scrutinizing the motivations behind an optometrist’s referrals to particular surgeons to determine if referrals are based on whether a surgeon will co-manage, giving the optometrists the opportunity to earn a co-management fee, as opposed to being based on the clinical skill and patient outcomes of the surgeon.

Refractive procedures

Ophthalmologists and optometrists also comanage patients who undergo refractive surgery such as LASIK. Many practitioners mistakenly believe that, because refractive care is not covered by most federal health-care programs, comanagement of such services is not subject to any fraud and abuse implications.

However, ophthalmologists participating in comanagement arrangements for non-covered services (such as refractive services including LASIK and SMILE) should note that regulatory risks exist in these arrangements as well, particularly when the surgeon and co-manager also share the care of patients undergoing covered services, such as cataract surgery.

For refractive patients, inflated comanagement fees paid by surgeons to co-managers for postoperative care that do not reflect fair market value (FMV) for services furnished can be the basis for allegations that these fees represent “kickbacks” to optometrists — meant to induce not only refractive surgery referrals but also referrals for covered surgical procedures.

When it comes to premium IOLs

This AKS concern is even more complicated in the case of cataract procedures involving premium IOLs. As of a May 2005 CMS ruling, Medicare has permitted facilities and physicians to charge patients for the non-covered portion of service furnished in connection with the refractive aspect of premium IOLS.¹ That and another ruling² prohibit separately charging patients for any services already included as part of the global fee for covered cataract surgery. Importantly, neither of these rulings directly addresses comanagement of the additional care associated with premium IOL procedures.

Given the refractive nature of surgeries with premium IOLs and the out-of-pocket fees paid by patients, the process of surgeons transferring a portion of a patient’s refractive surgical payment to a co-manager utilized in LASIK was adopted in relation to “refractive cataract surgery;” the amounts vary considerably. This has led to high government concern and investigation as to what additional postoperative services these fees are meant to compensate and whether fees are commensurate with work performed.

This inquiry is complicated by the fact that surgeons often have simply transferred to co-managers the amount of money they would charge a patient for the additional postoperative work associated with premium IOLs; however, it is difficult for the surgeon to track what additional care a co-manager is providing.

There also is a tendency for many to assume, incorrectly, that these payments are from the surgeon when, in fact, the payments are from the patient. The co-manager is not an independent contractor of the surgical practice.

COLLECT YOUR OWN FEES

The best means to avoid these complications that can draw alarming scrutiny under the AKS, a law that carries criminal penalties for both the party perceived and alleged to have offered or paid a kickback and the recipient or requestor? Both parties should maintain an independent relationship with the patient and set their own fees for non-covered services (whether LASIK, SMILE or premium IOLs) consistent with fair market value for the services actually rendered.

While the administrative aspects of such a change may seem significant, having the co-manager set and collect his/her own fees is in the best interest of all — surgeon, co-manager and patient. Independent fees give patients transparency to their financial liability and for what services.

CONTINUING EDUCATION PROGRAMMING

A case study

A second area of focus from the government and whistleblowers regarding relationships between ophthalmologists and optometrists is the giving of items and services of value. The ophthalmologists’ offer of free continuing education (CE) programming for optometrists is receiving special attention.

In June 2022, OIG issued an Advisory Opinion 22-14 regarding a requestor’s proposed CE programs for local optometrists. It analyzed possible regulatory risk of four potential options to fund the programs (https://tinyurl.com/y6nd34nc ). The requestor was an ophthalmology practice that proposed to offer two education programs annually to local optometrists.

One program was anticipated to be a six-hour, in-person meeting, and the second program would be a two-hour evening program presented either virtually or in-person. During the all-day program, a modest breakfast and lunch would be provided; in-person attendees of the evening program would receive a modest dinner with no alcohol.

All local optometrists would be invited to attend regardless of whether they were referral sources for the sponsoring practice. Faculty for the program would include outside speakers from academic institutions and members of the sponsoring ophthalmology practice. Importantly, attendees would be eligible to receive CE credits for each of the two programs.

The requesting practice proposed four alternative arrangement options to cover the cost of the program:

1. The sponsoring practice would charge a FMV fee to each attendee, which would be anticipated to cover all expenses. In the event of a shortfall, the practice would cover any additional costs that were not covered by the registration fee.
2. The sponsoring practice would not charge a fee for any attendees, and the practice would cover all expenses relating to the program.
3. The sponsoring practice would not charge a fee for any attendees. Instead, the practice would receive outside funding from industry to cover the cost of the program. In the event of a shortfall, the practice would cover any additional costs not covered by industry sponsors, and, if any funds remained after payment of all costs, the overage would be donated to charity.
4. The sponsoring practice would charge a FMV fee to each attendee and would receive outside funding from industry. If any funds remained after payment of all costs, the overage would be donated to charity.

OIG’s red flags

The OIG first analyzed the legitimacy of the program itself, considering “red flags” the agency had previously outlined in its November 2020 Special Fraud Alert relating to speaker programs. According to that document, the following circumstances render a speaker program suspect as a potential sham designed to induce referrals, rather than offer legitimate educational content:

• Little or no substantive information presented
• Alcohol provided or a meal provided exceeding modest value
• Program held at a location not conducive to education
• Speaker selection based on past or expected referral generation
• Payment for speakers in excess of fair market value.

Because none of these red flags were present in the proposed program, the OIG turned to analysis of its proposed funding. Of the four options presented, OIG approved only option one (registration fee, no sponsorship support). The OIG reasoned that, under the other three funding options, the provision of educational content with independent value for which attendees would otherwise pay confers a benefit on the attendee. If the attendees did not have to pay a registration fee for the program, there would exist a risk that the free content would serve as an inducement to attendees to refer to the sponsoring practice.

Furthermore, OIG found that adding the proposed industry sponsorship created heightened risk that the sponsoring practice and/or program attendees might be induced to prescribe or order the sponsoring company’s products. Accordingly, in OIG’s view, funding options two, three and four presented more than a minimal risk of fraud and abuse.

Based on OIG’s analysis and findings in Advisory Opinion 22-14, we can conclude that ophthalmology practices considering whether to organize educational programming opportunities for local optometrists should ensure that their programs implement the following best practices:

• Ensure that the educational programming is legitimate with real content
• Do not limit invitees to referral sources
• Make the setting conducive to learning
• Do not offer alcohol or expensive meals
• Select speakers based on genuine qualifications without regard to potential referrals
• Charge each attendee a fair market value fee for attendance
• Seek legal guidance if considering industry sponsorship.

SUMMARY

It is crucial for clinicians to understand their compliance obligations before entering into complex relationships with referring providers, such as comanagement arrangements or continuing education offerings. Following the above recommendations should help to minimize risk of a kickback violation, but clinicians may be best served by having any proposed financial arrangements with referring providers reviewed by legal counsel. OM

REFERENCES

1. CMS Ruling 05-01. May 3, 2005. https://www.cms.gov/Regulations-and-Guidance/Guidance/Rulings/Downloads/CMSR0501.pdf . Accessed November 2, 2022.
2. MS-Ruling 1536-R. January 22, 2007. https://www.cms.gov/Regulations-and-Guidance/Guidance/Rulings/downloads/CMS1536R.pdf . Accessed November 2, 2022.

Allison Shuren, JD, co-chairs the Life Sciences and Healthcare Regulatory practice at Arnold & Porter in Washington, DC. She advises a wide range of health-care clients on regulatory, compliance, enforcement and legislative matters. She counsels on referral arrangements as well as sales and marketing programs, represents clients in government investigations and qui tam actions involving False Claims Act, Anti-Kickback Statute, Stark Law and health-care fraud allegations.

Loreli Wright, JD, MS, counsels clients at Arnold & Porter in Washington, DC, on a broad range of regulatory and transactional matters in the health-care industry, primarily on regulatory matters related to the expansion and acquisition of provider entities. She advises health-care organizations, health-care professionals and private equity firms on regulatory issues, including licensure and certification of health-care facilities, corporate practice restrictions, Medicare and Medicaid program participation requirements, telemedicine, and federal and state health-care fraud, abuse and self-referral laws.