Ophthalmology and Optometry Coding Alert

Hint: Internal audits can help you avoid kickback allegations.

Health care auditors are increasing their reviews of medical practices nationwide, but that hasn't stopped some eye care physicians from putting themselves at risk kickback accusations. Check out a recent case and then read on to see how you can avoid the same fate.

Inducements for Lenses?

A North Carolina ophthalmologist agreed to pay almost $3 million to settle allegations that medical supply companies gave him kickbacks in exchange for using their products, according to a Feb. 8, 2018 Department of Justice news release. Specifically, the physician "received various trips, including hunting and international fishing trips, which were used to induce, and attempt to induce, the physician to use products and services distributed by these companies," the DOJ noted.

In addition, one supply company paid the ophthalmologist consulting fees totaling over $100,000 annually, but the physician either didn't perform the services or the company didn't document the performance, so the government considered that to be "remuneration in excess of fair market value."   

The case was brought to the DOJ's attention via a whistleblower, who will receive 19.5 percent of settlement amount, which totals over half million dollars for the whistleblower.

Take A Look At Kickbacks

Kickbacks refer to any acceptance of reward, incentive, or payment for a referral from anyone, or in technical terms, "patient referrals or the generation of business involving any item or service payable by the Federal healthcare programs," the Anti-Kickback Statute (AKS) states. You run the risk of both civil and criminal charges under the AKS, which makes kickbacks more detrimental to the offender than referral fraud.

Consider this scenario:  If the owner of the lab you send your patients to offers you "incentives" for referring them, that is considered a kickback. In this kind of situation, cash rewards, gifts, vacations, and even discounted services or supplies are considered kickbacks.

Labs, suppliers, drug companies, hospitals, home health agencies, and more pursue physicians for their referrals - and offer big inducements for the kickback. However, it's important to note that some providers can avoid penalties if they have an arrangement in place under one of the OIG's safe harbors.

Fine breakdown: Monetary damages for engaging in kickback fraud vary depending on the level of severity, but "civil penalties for violating the AKS may include penalties of up to $50,000 per kickback plus three times the amount of kickback," according to the Medicare Learning Network fraud and abuse fact sheet. Criminal penalties may, however, include fines, incarceration, and exclusion from the Medicare, Medicaid, and state health programs.

The takeaway: In this case, the offending doctor would have easily been discovered if the practice had performed semiannual audits, so ensure that your practice is on an appropriate audit schedule to catch any such issues.

You can either perform a prospective audit (in which your practice examines new claims before you file them) or a retrospective audit (when your practice examines paid claims). A prospective audit helps you identify and correct problems before sending the claim, which could mean you'll discover incorrect coding or charges that would otherwise have been missed. However, this type of chart audit can potentially delay billing.

Retrospective chart audits do not delay billing, but cause your office to be reactive by refiling claims, rather than proactive in finding problems before you submit the claims.

Best bet: Your practice must determine for itself what types of audits your staff can reasonably complete and what effects on claim submission timing and cash flow the practice can handle.

Resource: To read the DOJ's news release on this case, visit https://www.justice.gov/usao-mn/pr/united-states-files-complaint-against-precision-lens-paul-ehlen-alleged-kickback-scheme.