Wednesday, February 16, 2011

what is professional courtesy - what are the rules on that - Is it illegal

Obey Stark Rules if You Extend Professional Courtesy

Professional courtesy—that is, offering free or discounted service to colleagues and their family members—
was once standard practice in physician offices. It has fallen by the wayside in recent years, largely
because the OIG has voiced concern that it could be a violation of the antikickback and Stark laws. Private
insurers also have voiced concern that waiving copayment for colleagues under the guise of professional
courtesy, then billing the insurer without disclosing the waiver, is fraud.

But in Stark’s recent Phase II regulations, CMS published an exception for professional courtesy. So now, many practices may decide to begin offering professional courtesy again. If you’re one of those practices, we’ll explain why you should proceed cautiously. We’ll tell you what you need to do to make sure that your professional courtesy policy satisfies Stark—and explain how following Stark to the letter will minimize the risks that you’re violating other laws. And we’ll give you a Stark-compliant Model Policy on p. 7 that you can adapt and use in your practice, as well as a Model Letter on p. 8 that you can send to insurers if you want to waive a colleague’s copayment.

Professional Courtesy OK if Not Abused

Many practices stopped offering professional courtesy because they thought it violated:

■ The antikickback law, which bars the payment of any consideration in return for referral of services reimbursable under one of the federal health insurance programs; and/or
■ The Stark law, which bars physicians from making referrals of federally reimbursed items or services to an
entity in which the physician or a family member has a financial interest.

But that was never really true, says New York health care attorney Jay S. Silverman, because there’s no
legal prohibition against offering a colleague discounted or free services simply because she’s a colleague.

The trouble is that many practices would discount the amount they charged the colleague by, for example,
reducing or waiving the copayment— but still bill the insurer the full amount for the service without
disclosing the copayment reduction.

Or practices would extend professional courtesy to only certain colleagues as a reward or inducement
for referrals, and not offer it to colleagues who weren’t in a position to make referrals. Courtesy policies
like these are legally questionable, Silverman says, because the physician expects a gain for extending
the professional courtesy. It’s this aspect of professional courtesy that insurers and the OIG find objectionable, he explains.

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