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Medical Practice Sales, Appraisal and Financing

Medical Practice Sales, Appraisal and Financing

A recent advisory opinion was released from the Department of Health and Human Services, Office of Inspector General (OIG), pertaining co-management. Co-management in vision care is the sharing of a patient's care between a surgeon and primary eye care professional. Advisory Opinion No. 11-14 pertains to a proposal from an ophthalmology group (the "Requestor") regarding co-management of cataract surgery patients with independent optometrists. Per the proposal, the independent optometrists would separately charge the beneficiaries for services related to premium refractive intraocular lenses that are not covered by the Medicare program. The group was inquiring whether the arrangement would violate section 1128(b)(7) of the Social Security Act (the "Act"), or the civil monetary penalty provision at section 1128A(a)(7) of the Act, as those sections relate to section 1128B(b) of the Act, the Federal anti-kickback statute.

The anti-kickback statute prohibits healthcare providers from "receiving any remuneration to induce or reward referrals of items or services reimbursable by a Federal health care program. This provision is meant to prevent unscrupulous providers from forming referral arrangements without concern for clinical appropriateness. For example, it is illegal for an optometrist to refer patients for to an ophthalmologist on the condition that the patient would then be transferred back and the global fee would be split. However, not all referral arrangements involving the division of global fees are considered violations of the statute.

The OIG determined that the group's specific request would not generate prohibited remuneration under the anti-kickback statute. As mentioned previously, the proposed arrangement involves optometrists independently charging a fee for services not covered by Medicare. Four conditions govern the legality of this arrangement: 1) The Requestor would have no agreements, written or unwritten, with optometrists for the co-management of patients. 2) The Requestor would inform patients that they may incur additional charges by returning to their optometrists for post-operative care, which would discourage them from doing so. 3) The services to be provided by either the ophthalmologist or the optometrist are not services covered by Medicare. 4) Patients would only be returned to their optometrists at their request. Based on the Requestor's promise of adherence to these four conditions, the OIG concluded that the proposed arrangement would not violate the anti-kickback statute.

This is an overview of an OIG Advisory Opinion and should not be construed as guidance on any issues including legal, regulatory, and compliance matters.

Written by Transition Consultants

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