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Young Ophthalmologists
How Much Do You Know? Questions You May Encounter in Your Ophthalmology Practice

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How up-to-date are you with your knowledge of practical issues as well as the legal and regulatory issues that affect your practice? Take our quiz and see how up-to-date you are in your knowledge of some of these general questions affecting most ophthalmology practices. The answers follow the quiz.

1. Which federal statutes currently require annual training?

  1. OSHA
  2. Fraud and Abuse
  3. HIPAA Security
  4. HIPAA Privacy
  5. A and D
  6. C and D

2. Can you pay your site manager a salary rather than by the hour to reduce your overtime costs?

  1. Yes, if the site manager has the ability to hire and fire at least two people.
  2. Yes, if the site manager makes decisions critical to the business and meets minimum weekly pay amounts.
  3. Yes, if the site manager is a full-time employee and routinely works more than 40 hours.
  4. No

3. Dr. C. is a cornea specialist with whom you have a referring relationship. Dr. C. must vacate his current office because the building is being sold. Can you rent Dr. C. extra space in your office?

  1. Yes, because it is a business transaction, not a healthcare matter.
  2. No, because you have a referring relationship with him.?
  3. Yes, if the lease is for one year, is in writing and is based upon fair market value.
  4. No, because you co-manage patients with Dr. C. after they have cornea surgery.
  5. Yes, because you only refer a few cases per month to Dr. C.

4. You have a burgeoning LASIK surgery practice and would like to encourage optometrists and aesthetic practitioners to refer patients to you for this service. You propose giving the patients a gift certificate to the practice of the person who referred the patient to you.  Will you run afoul of any laws with this situation?

  1. Fraud and Abuse Laws
  2. Stark Laws
  3. HIPAA
  4. State Laws
  5. All of the above
  6. A, C and D
  7. None of the above, because LASIK surgery is an elective procedure not covered under any federal health care program.

5. You just hired a new ophthalmologist, Dr. N.  She starts on Aug. 15, but will not be fully credentialed until Oct. 15. Can you bill her services under your name until she is fully credentialed with the commercial health plans?

  1. Yes, because equivalent services were provided.
  2. No, because you did not provide the service, Dr. N. did.
  3. Yes, because you will only bill non-federal health care programs. Medicare allows you to bill retroactively once she is credentialed.
  4. No, because you do not want to go to jail.
  5. B, C and D
  6. B and D

6. You currently manage your ophthalmology practice as the managing partner. You have six physicians, three optometrists and three sites. Though all six physicians are owners, you end up doing all the management. Can you compensate yourself for you management time?

  1. No, because you are all owners.
  2. Yes, because you are providing a service nobody else is providing.
  3. Not yet, because it is not currently a part of your corporate agreements or compensation plan.
  4. Yes, because there is a fair market value for the service you are providing.

1. (e)
The federal programs that currently require annual training are OSHA and HIPAA Privacy. The government strongly recommends training for Fraud and Abuse, and will begin requiring training in some areas where an entity receives in excess of $5 million in Medicaid funds after January 2007. (HIPAA Security is generally focused on physical conformance.) Nevertheless, we recommend setting up a compliance-training plan, incorporating OSHA, HIPAA Privacy, Fraud and Abuse and basic Employment Law training modules.

2. (b)
The government recently changed the law regarding salaried employees. You may consider an employee exempt, allowing you to pay that person a salary that does not include overtime, if he or she qualifies under one of the exempt employee categories. One criterion is if the person makes decisions that are critical to the practice and earns at least $455 per week. The older standard, whether the employee could make decisions regarding hiring and firing, is no longer solely indicative of an exempt employee. Decisions that are critical to the practice could include duties such as hiring, firing, budgeting, management and development.

3. (c)
In this situation, both a referring relationship and a proposed financial relationship exist. As a result, the Fraud and Abuse laws may be implicated.

However, the Fraud and Abuse laws provide a safe harbor for lease situations if the following conditions are met: (1) the lease is in writing, executed and signed by both parties; (2) the lease covers all of the premises leased and specifically identifies the premises; (3) the term of the lease is at least one year; (4) if the lease is intended to provide access in limited and periodic intervals only, and specifies exactly the schedule of such intervals and the rent for such intervals; (5) the aggregate rental charge is set in advance, is consistent with fair market value and is not determined in a manner that takes into account the volume or value of any referrals; and (6) the aggregate space rented does not exceed what is reasonably necessary to accomplish the commercially reasonable business purpose of the rental.

4. (f)
The LASIK referral gift certificate program could potentially implicate a variety of statutes based simply on the remuneration exchanged. The Stark laws do not apply because this is not a self-referral situation, and LASIK surgery is not a "designated health service."

However, the Fraud and Abuse laws could apply if you are making a generous gift for the referral of LASIK patients and, for example, are receiving cataract patients or other patients for which payment may be made by the Medicare or Medicaid Program(s). The argument would be that the LASIK-gift certificate (which is bought from the referring practitioner) is a disguised payment for other referrals.

Additionally, under HIPAA, a person who offers or gives a Medicare beneficiary remuneration is likely to influence that beneficiary’s selection of a provider, practitioner or supplier of Medicare or Medicaid payable items or services—all of which could trigger the statute. Remuneration here includes waivers of deductibles and/or co-pays, free goods or services in excess of $10 per item, or $50 per year per beneficiary. So again, if it could be argued that beneficiaries are involved, and your gift certificate program is intended to influence their provider choice, such as for other insured services, the statute would apply. Of course, if you have a truly LASIK-only practice, you likely have few (if any) Medicare or Medicaid beneficiaries.

Also, some states have separate fee splitting and/or discount laws, which may be broader, apply to more situations and even include all payers (meaning self-pay). In some cases, these state statutes make any perceived payment for any referral illegal, and would therefore make your purchase of the gift certificate from the referring provider suspect.

Furthermore, if an insurance company supports LASIK, that insurance company may be regulated by certain laws, which make these types of arrangements unacceptable and illegal. As a general rule, this type of arrangement is not a good idea. However, if you want to explore this option, you should be prepared to review federal law, state law, insurance law and your payer contracts before implementing this type of program.

5. (f)
Billing a different provider’s services under your name is a concrete "no-no." While Medicare usually allows retroactive billing, you would have to hold the claims until she is fully credentialed. Under the False Claims Act, those who knowingly submit, or cause another person or entity to submit false claims for payment of government funds are liable for three times the government’s damages, plus civil penalties of $5,000 to $10,000 per false claim. See 31 U.S.C. §3729 et seq.

Submitting a claim under your name for services provided by another person constitutes submitting a false claim. Additionally, some individual states have False Claims Acts. For example, California, Delaware, the District of Columbia, Florida, Hawaii, Illinois, Louisiana, Massachusetts, Nevada, New Mexico, Tennessee, Texas and Virginia all have State False Claims Acts, in addition to the penalty under the federal act.

To avoid retroactive billing, the practice can include a provision in the contract stating that the new doctor cannot begin working until credentialed by all of the primary payers. In this question, that would mean that Dr. N. would not start work until Oct. 15. This saves the practice from paying out salary and benefits to a physician who cannot bill for her work. In some smaller practices, this savings may be significant, especially considering collections for Dr. N. will not begin rolling in for another two to three months, despite billing from the beginning.

6. (c)
Payment relationships in your practice are controlled by the owners of the practice and whatever structure they have devised. As a result, unless the managing partner has unilateral control over this issue, the decision to compensate the managing partner is a practice-owner decision. Depending on the dynamics of the practice, compensation may be entirely reasonable and appropriate. In fact, many practices do compensate the managing partners.

If you are seeking to be reimbursed for management duties, you must take this issue to the owners, shareholders, directors, partners, etc. of the practice. In this example, I would bring up my concerns at a board meeting and request a resolution from the board that would adopt a change to our compensation plan to achieve this goal.

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About the authors: Sandra McGraw, JD, is a CEO and a consultant, with more than 20 years experience advising physicians in their business and legal matters for The Health Care Group. Anne E. Jorgensen, Esq., is a consultant and associate attorney with HCG.

The above information is an excerpt from course #668 News You Can Use! Hot Topics in Ophthalmology Practice presented during the AAOE Program of the 2006 Joint Meeting.