Professional courtesy or kickback? OIG can't decide
Professional courtesy or kickback? OIG can't decide
A whisper of a rumor last November has turned into an uproar in March. It was November, American Medical Association (AMA) officials say, when federal officials began dropping hints that the OIG might soon begin regarding physicians’ traditional practice of extending "professional courtesy" to other physicians and their families as fraud under the anti-kickback statute. While OIG refuses to officially clarify its position until it can draft a report on the matter, sources in the IG’s office say unofficially that the AMA’s concerns might be justified, and a crackdown could be on the way.
That troubles physicians like Percy Wooten, MD, a clinical cardiologist in Richmond, VA, and immediate past president of the Chicago-based AMA. Wooten, who in the past has frequently provided medical services to other physicians under a professional courtesy arrangement, says the practice of extending courtesy is as old as the Hippocratic oath. And until very recently, any decision to offer such courtesy was left exclusively to the discretion of the physician and his or her patients. "The covenant between a physician and any patient is a matter of trust and honor," he says. "There should not be any consideration of a kickback."
But with federal investigators now scrutinizing physicians’ relationships with home health agencies and durable medical equipment suppliers, it seems likely that those same investigators will soon be scrutinizing physicians’ relationships with each other.
Problems arise when, instead of simply waiving the entire charge for a service, the physician accepts whatever the insurance plan allows as full payment and any co-payment is waived. Under Medicare, however, physicians receive 80% of the allowable amount for a service (defined as the lower of the payment schedule amount or the actual charge).
So if Medicare allows a payment of $100, the program pays the physician $80, and the co-payment amount is $20. According to a brief prepared by the AMA’s legal counsel, "A determination to only accept what insurance pays’ as payment in full could be seen as the physician having an actual charge of $80, and the resulting insurance payment should be $64."
Viewed that way, the treating physician’s professional courtesy toward a colleague ends up short-changing Medicare by 20%.
In practice, however, Medicare rarely is short-changed at all, Wooten says. He points out in his more than 30 years as a practicing physician, he’s never known a physician who used Medicare without also having MediGap insurance, which covers the 20% copayment.
Still, waiving copayments — at least under certain circumstances — has already gotten some physicians in trouble. Wooten cites the example of unscrupulous clinics who as way of advertising their services offer to write off copayments for all patients. "That’s fraudulent," he says, "because the law requires that physicians make every effort to collect the copayment."
But even if you skirt that issue by not accepting any payment from Medicare for the services you provide another physician, you could still be in hot water if the government decides the "free" service actually constitutes a kickback to another provider.
Be particularly wary, experts say, if you have any professional link to the other providers, especially one involving the referral of patients. Indeed, the Healthcare Insurance Portability and Accountability Act (HIPAA) includes an amendment to the anti-kickback statute that addresses this very issue.
According to HIPAA, a kickback now can include "waiver of coinsurance and deductible amounts (or any part thereof), and transfers of items or services for free or for other than fair market value." There are exceptions in cases of financial need, but most physicians don’t come close to meeting the financial need requirements.
The OIG reports that, so far, it has never prosecuted an anti-kickback case involving professional courtesy, but worries that the agency might be gearing up to do just that have already prompted some providers to begin drafting policies on the matter. For example, officials at Chilton Memorial Hospital in Pompton Plains, NJ, are in the process of drafting such a policy now, says spokeswoman Carla DeWitt.
Chilton’s policy will essentially stress that any physicians who come to the hospital for treatment will have to pay as though they were any other patient. DeWitt says the policy is meant more to protect the hospital itself than the physicians involved.
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