Recently in the news, two ASCs allegedly induced optometrists to steer patients to their facilities for cataract surgeries. The physicians were allegedly induced through financial remuneration, such as continuing education, meals, tickets to sporting events, and inappropriate prearranged co-management agreements with optometrists. Typically, the surgeon performing the surgery retains 80% of the Medicare reimbursement, while the remaining 20% is allocated for post-operative exams. In a co-management arrangement that 20% is sometimes paid directly to the referring optometrist. In other cases, the ophthalmologist receives the full amount but has to pay the optometrist an FMV service fee for their post-op services.
It’s good compliance practice to obtain a third-party FMV opinion for a co-management agreement with referring optometrists. What is the FMV of a co-management agreement for cataract surgery? The short and easy answer is 20% of the total allowable Medicare reimbursement. However, not all post-op exams go smoothly and routinely. Some patients require more work, exams and additional visits.
Although it is widely understood that Medicare reimbursements are low, many providers choose to accept their fees while others do not. The fact that there are many providers that accept Medicare’s low rate constitutes “market transactions” between willing participants. This serves as an “indication of market value”, which represents the market approach to value. However, in my opinion, this establishes the low end of the FMV range for post-op services. HVG’s specific studies/analysis from survey data reveals that a cost approach to valuing co-management services produces a higher value than the Medicare 20%.