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Summary of OIG Advisory Opinion 11-14 

Issued September 30, 2011, and posted October 7, 2011
Written by Joe Kahn, reviewed by Catherine Martin*

On September 30, 2011, the U.S. Department of Health and Human Services, Office of Inspector General (OIG) issued favorable Advisory Opinion 11-14, relating to a proposal for ophthalmologists to co-manage cataract surgery patients with independent optometrists who would separately charge the patients, including Medicare beneficiaries, an additional fee for non-covered and post-operative services (Proposed Arrangement). OIG concluded that the Proposed Arrangement would not generate prohibited remuneration and, therefore, it would not impose administrative sanctions in connection with the Anti-Kickback Statute with respect to the Proposed Arrangement.

The Requestor is a group practice specializing in ophthalmic care, including cataract surgery. Medicare covers conventional cataract surgery (Conventional IOL), but only covers a portion of more expensive, premium cataract surgery (Premium IOL). Whereas patients receiving Conventional IOL often still require glasses or contact lenses post-surgery, many patients receiving Premium IOL do not. Medicare payment for Conventional IOL is paid in a global, bundled payment. For Premium IOLs, Medicare pays only a portion of the cost, and the beneficiary is responsible for the additional fees.

It is not uncommon for surgeons to transfer patients back to an optometrist for post-operative care following cataract surgery. In these situations--commonly referred to as "co-management" arrangements--the providers bill Medicare for their portion of the care using separate modifiers for Conventional IOLs and for covered portions of the Premium IOLs.

The Requestor has historically co-managed patients with optometrists in their area on an informal basis--there are no contracts between the parties related to these arrangements, nor is any remuneration exchanged between the providers as part of the co-management arrangement. Recently, a number of optometrists have notified Requestor that they intend to begin charging patients, including Medicare beneficiaries, a fee related to non-covered, post-operative care following Premium IOLs. Requestor asked OIG whether the opportunity for the optometrists to earn a fee for such non-covered services, as part of the co-management of the patients, would constitute prohibited remuneration under the Proposed Arrangement. After noting the narrow scope of the question and distinguishing the Proposed Arrangement from potentially problematic referral arrangements between optometrists and ophthalmologists who split a global fee through co-management, OIG concluded that the Proposed Arrangement would not constitute prohibited remuneration for the following reasons:

  1. Requestor would have no written or unwritten agreements to
    co-manage patients with any optometrist--instead leaving the choice with the patient;

  2. Requestor would inform patients receiving Premium IOLs that, if they returned to see an optometrist for post-operative care, the optometrist might charge them an additional fee;

  3. The increased costs associated with the Premium IOLs are not covered by Medicare, and therefore the proposal would not increase the cost to the Medicare program; and

  4. Requestor would only transfer the patient back to his/her optometrist upon the patient's request.

*The Fraud and Abuse Practice Group Leadership would like to thank Advisory Opinions Task Force members Joe Kahn, Esquire (Nexsen Pruet PLLC, Raleigh, NC) and Catherine A. Martin, Esquire (Adelman Sheff & Smith LLC, Annapolis, MD) for respectively writing and reviewing this summary.

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