The Latest in Co‑Management Best Practices

Alan Reider provides an expert analysis on co‑management for ophthalmologists. Throughout ophthalmology, there is increasing awareness of allegations of non-compliance with the federal Anti-Kickback Statute when surgical practices co‑manage patients of premium IOL, LASIK, RLE, and other procedures with optometry practices. Challenges extend to the handling and collection of co‑management fees for premium services. In this 20-minute video, Alan Reider speaks with Tal Raviv, M.D., to discuss:

Co-Management Best Practices video
  • Updates on high-profile issues in co-management
  • Co-management best practices for ophthalmology practices
  • The importance of “payment separation” with respect to how co-management fees for premium services are handled

The two are joined by Sean Hanlon, who introduces CoFi as a compliant, multi-party payments solution that is already in use across 350+ eye care practices.


  • Tal Raviv, M.D., Eye Center of New York, Moderator
  • Alan Reider, Principal, LSR Consulting
  • Sean Hanlon, CEO, CoFi

Video transcript

Tal Raviv: Welcome to "What's New in Compliance and Co-Management?" I'm so happy to have Sean Hanlon and Alan Reider here. And co-management is something that's been around for probably four decades or so. And it's been changing. We had it first with Medicare, and then LASIK was around. But now in the era of premium cataract surgery, which is exploding and booming, co-management has become a little more complicated. I'd like to ask Alan, please tell us a little bit, what's going on with the current regulatory environment around co-management?

Alan Reider: Oh, thank you, Tal. You know, it's interesting. As you said, co-management has been around for a long time. And there has been a fair amount of controversy within the profession. There have been some guidance documents issued by the government, particularly the inspector general's office as well as CMS. And the bottom line is co-management is a legitimate, appropriate methodology for a patient to return to his or her optometrist or case maybe ophthalmologist for post-op care after cataract surgery. And we've seen the whole issue come in waves, and during...initially when co-management began in the mid-1980s, there was a great deal of concern. But as I said, both the CMS and the OIG pretty much acknowledged that co-management when done appropriately, is perfectly legitimate. But as you note, there have been additional issues that have arisen, and they've really arisen principally within the context of the premium lens implants, and the additional services that are generally provided in connection with that.

In terms of the current environment, things have gotten very concerning for practitioners because of a number of high profile investigations and litigation. And one in particular has caused a great deal of anxiety. And that's one in federal district court in Eastern Tennessee. That's known as the SouthEast Eye Specialists case. And in that case, whistleblowers filed a complaint alleging that the ophthalmology practice engaged in kickback relationships with optometrists through its co-management program, as well as other collateral programs, such as continuing education, providing benefits, gifts, etc., to their referral sources. And this particular case has received a great deal of attention and has created a great deal of anxiety.

If you'd like, I can go into a little bit more detail and talk about some of the allegations in that case, which is why, as I say, everybody seems to be so focused on co-management right now. Would that'd be helpful?

Tal Raviv: Yes. Why don't we briefly...I know it's difficult, but maybe what are the some of the overarching, you know, topics that had come up in that case, and how maybe others can avoid them?

Alan Reider: Sure. Well, again, we have to understand that right now, it's a litigation. There have been no final judgment. No final decision as to what has happened or whether the conduct in that case violated the law. But just to focus on what is going on, as I said, it's been clearly characterized as a co-management case, but in fact, it's a broader case than just co-management. It's a case about the relationship between ophthalmology and optometry, where there are referrals back and forth between the practices.

However, co-management is definitely a key focus. And within the context of co-management. The allegations are, essentially, that while the practice, the ophthalmology practice, was obtaining patient consent for co-management, the allegation is that consent was really not, in fact, given by the patients. It was given and without understanding what was going on. The ophthalmology practice was accused of performing what they called routine co-management, having agreements with these optometry practices to assure them that their patients would be referred back to them. And there's been anecdotal evidence that has been alleged that suggested that the ophthalmologists were assuring the optometrists that they would refer back, that they wouldn't keep their patients, that these patients are a way for them to make money.

So, the issue of patient decision-making and patient choice is a critical one. That's really the foundation there. But the allegations go beyond that. And they go to the typical issues that we've been seeing in co-management for years. One deals with the fact...well, one allegation is simply which, you know, I don't find particularly persuasive, but it's an allegation that says this practice co-managed almost all the time. They looked at numbers. They said that the practice co-managed between 75% and 90% of all its patients. Whereas if you look at the entire ophthalmology profession, perhaps according to this allegation, it's done only 10% or 11%. And in Tennessee, it's done only 23%. Now, I don't think personally that the amount of co-management is indicative of whether it's appropriate or not. But this is one of the allegations that is being made. Just the...simply, the high volume of co-management seems to be a concern, or at least it's an allegation.

Another one focuses on the fact that ophthalmologists receive additional payment in connection with implanting premium IOLs, and the optometrists receive additional payment for the additional services they perform in those cases. Well, you know, again, we're very early in the case right now, there has been no final decision. And in fact, in one of the earlier decisions where the judge dismissed the motion to dismiss or rejected a motion to dismiss, the judge made a specific statement saying, "I'm not in a position at this time to consider whether or not the service's rendered by the optometrist, and the amount pay to the optometrist reflects fair market value." So that's gonna be a critical question.

Whistleblowers also made a point that the payment is made for a global fee to the ophthalmology practice. And then the ophthalmology practice makes payment to the optometrists. And simply the conduct of making that payment, according to the whistleblowers, that raises concerns about propriety, and whether or not that conduct reflects a violation of the Kickback Statute. So, again, what the whistleblowers are saying here is, "These guys do it all the time, the numbers prove that they do it all the time. The fact is, optometry is getting paid for additional services, and that payment is being made by the ophthalmologist." That in a nutshell is what the allegations are surrounding co-management.

Tal Raviv: Thank you, Alan. You know, I think what's happening in ophthalmology, what I'm seeing is that there are more and more cataract surgeries being done every year. A lot of them...a lot of the patients are choosing to get premium technology for their eyes. And due to decreasing reimbursements, a lot of surgeons are also dropping out of surgery. So more surgeries done by fewer surgeons. And I see in my practice that as a cataract surgery primary practice, I'm referring pretty much everyone eventually out to their primary care provider. And so co-management is part of my practice because I just see that's how it's going. With that in mind, if you were advising a practice, what would be the three or four foundational pillars of a compliant co-management practice?

Alan Reider: Well, first and foremost, it's something that I've been talking about for many, many years, is make sure that the decision for co-management is made by the patient. It has to be the patient's choice. And avoid any suggestion of any kind of an agreement. Certainly nothing in writing, and certainly nothing orally either, because this particular case is focused largely on statements that were made by the ophthalmologists to the optometrists during meetings, giving them these assurances that they were going to get the patients back. Those are real red flags. You should not be doing that. So again, patient choice is number one.

Number two is in the case of the performance of cataract surgery with a premium lens implant, where the optometrist is going to be performing additional services, make sure that first those additional services are legitimate. I mean, that's a clinical issue, not a legal issue. But make sure they're legitimate. And then, to the extent that the optometrist is being paid for those services, which is perfectly appropriate, make sure that the payment reflects the fair market value of those services. That's going to be a critical element in any analysis.

And finally, the last point I would make is that while there's nothing inherently wrong with the ophthalmologist collecting the fee on behalf of the optometrist, doing it as a courtesy, if you will, to the patient, make absolutely certain that the patient understands exactly how much money of that global fee is going to the optometrist for the additional services that the optometrist is providing. And obviously one way to assure that, the easiest way, is to have the optometrist collect independently. However, if you are going to collect globally, as in the case here, you've got to be sure that the patient understands there should be a delineation, maybe two separate payments. But at a minimum, a delineation of the amount that is going to the ophthalmologist and the amount that is going to the optometrist, so the patient understands exactly what the patient's paying for.

Tal Raviv: So I'm hearing four things, there's the patient choice, there is a fair market value for services rendered, price transparency, and in an ideal setting, payment separation. That brings me to, you know, the complexity sometimes of just collecting payments for these premium procedures. The patient is at the office, they're ready to invest in their eyes. They're told a total global price. They're ready to pay it. But the details and nuances of that payment are important. Which brings me to Sean. Tell me a little bit about, you know, what is CoFi? How can it help in this situation?

Sean Hanlon: Thanks, Tal, and thanks, Alan. So, CoFi is a software tool for ophthalmology practices to enable them to make all of this very simple, and to facilitate payment separation in a really easy manner. So with CoFi, the patient has one convenient payment event, you know, at the surgeon's office. But what happens on the backend is each party involved in the procedure, with the ophthalmology practice, the optometrist, and the facility are all collecting directly from the patient. The patient is actually paying each party directly in distinct transactions. And so, CoFi is really helping a lot of practices implement a convenient and compliant payment solution that, you know, makes it very simple for the patients and administratively easy for all the parties involved.

And the idea behind this is exactly what Alan is talking about here, which is payment separation, have the patient pay each party separately. And that can be a challenge to implement when you consider, you know, a Medicare age patient getting cataract surgery, who is hearing about this global fee, the global cost, and is being told that, "You're gonna pay us now and then the facility is gonna call you probably the day before or you're gonna pay them when you get there. And then when you start your postoperative care, the optometrist will also collect for you." And that could be confusing for patients. It can be off-putting, and it could be a difficult collections moment for the optometrist.

And so, with CoFi, the patient is paying each party upfront, at one time, I should say. And the analogy I like to give is it's like the ophthalmology practice is putting the credit card reader and check deposit apps for all of their partners right in their office, so the patient can pay each party separately in a very convenient manner, except we do that through software.

Tal Raviv: Thank you, Sean. If you could just take us through a simple scenario of, you know, the patient's in the surgical counselor's office, they're about to make this...they know the total price is, let's say, $3,000, but it has 3 components to it. What does the surgical coordinator do to help create this invoice which shows them all the parts of that price?

Sean Hanlon: So with CoFi, when they're creating this, what we call multiparty invoice, it's really simple, with preloaded into their CoFi account or each party's fees. And CoFi facilitates setting up fees however the practice thinks about co-management. If there's a flat fee per procedure that's fair market value throughout the market, that's reflected in CoFi. If the optometrists are setting their own fees for their work, what they view to be fair market value, that can be reflected in CoFi. And so, the surgical coordinator or whoever is the one, you know, creating these invoices and going over the cost of the patient, in 30 seconds, 45 seconds is creating an invoice that includes each party's fees for that procedure. And it lays it right out for the patient, exactly the way it's described today, which is, you know, "You're gonna pay us here and facility then, and the optometrist." It just lays it out in one easy-to-follow, you know, sheet of paper, and it just makes a lot of sense to the patients. We get zero customer service calls saying the patient's confused by what's happening."

Tal Raviv: Just to recap, you know, the patient is essentially receiving an invoice that shows him the exact prices for all the components, all the providers, they're paying that in one transaction event, but in reality, they're paying each provider directly. And on their credit card statement, they see, you know, two or three individual charges, is that correct? And does their ability to make changes, let's say the lens, you know, doesn't happen, or let's say that patient changes their mind, how does CoFi in those rare, know, those do occur?

Sean Hanlon: That's a great point you're making. Because the patient is actually making two or three distinct, different payments to different entities, they see those distinct and separate charges on their credit card or bank statement, depending on whether they, you know, pay by credit card or debit card or check. So they'll see a payment to, you know, in your case, Eye Center of New York, and the optometrist, and if it's relevant to the facility, they'll see those three separate charges. It's just like they walked around each place and paid them separately.

So let's say something changes, let's say, for example, the know, you collect two weeks in advance and the surgery gets cancelled, we have what we call a magic button where we can do a multiparty refund as well. One click initiates a refund for all parties and each party gets notified that the refund is occurring and why, and it's almost always, you know, because it was cancelled. Or if the patient opts to not be...changed their mind about co-management and opts to stay with the surgical practice for postoperative care, there's another sort of magic button that kind of undoes one of the payments and initiates another one to the surgeon. So, we have thought through kind of all of niche-y nuanced use cases in ophthalmology. It's a very ophthalmology-specific tool.

Tal Raviv: Just to wrap up, you know, I see co-management as collaborative work. We're working with different kinds of providers to provide different levels of care to the patient, so they get a well-rounded surgical experience and journey. Part of that is communication between the team members. How does CoFi help that aspect?

Sean Hanlon: That's also a great question. I think CoFi does really three things. We're solving for three different things here. One is patient convenience, which is definitely part of the patient experience that you're talking about. These are patients that are spending a lot of money, right, on upgraded premium services, whether it's LASIK, or whether it's a premium IOL, you know, cataract procedure. And the one...I think one part of that patient experience that hadn't been addressed until now is the payment experience when there's multiple parties involved. So we're solving for that.

We're also helping to de-risk a lot of practices from a compliance perspective. As Alan was talking about earlier, you know, there are many practices that are collecting globally and then paying their partners, writing checks to the optometrists. And I think part of the reason that persists is because it's frankly difficult to implement payment separation in a way that's convenient for the patient and their partners, and that's what CoFi helps solve for.

And then third, to answer your question, you know, we're reducing the administrative burden for really everybody. Right? So the partners, you know, this is a collaborative care situation here. And you want to make it as easy on your practices as your partners, like, your co-managing optometrists. And so, CoFi makes the collection of co-management fees administratively simple. And, you know, there's the second ophthalmology practice sets up an invoice in CoFi, the optometry practice can see, "Oh, great. I referred patient X over, you know, to Dr. Raviv a few weeks ago, and now I can see that she's scheduled for her surgery later in December. And she's, you know, having this particular procedure done." They've never had that information before. It's always been sort of a gray hole, what's going on with that patient, you know, where does the co-management fee stand, and so forth. CoFi creates a lot of connectivity between the parties, with notifications, and in tracking, which they really appreciate.

Tal Raviv: Well, we've talked about the ophthalmology side and the facility a little bit. Does the optometrist have any compliance risk with co-management payments, Alan?

Alan Reider: Oh, absolutely. Again, the Kickback Statute. You know, the old adage, it takes two to tango. Well, it takes two to kick back. And for the most part, all of our focus has been on the ophthalmologist and probably because the ophthalmologist is generally considered to be the bigger target, but the reality is, if there are investigations, the optometrist can easily be brought into these cases as well. And they share liability. They certainly share the potential for liability, just as the ophthalmologist does. So yeah, optometry is not has no risk here, optometry definitely has risk in all of these cases.

Tal Raviv: Thank you. And finally, Alan, what do you see as the impact of the current regulatory environment on co-management in general for ophthalmology practices?

Alan Reider: Well, I think a lot of it's gonna depend on what happens with this case. It's getting a lot of attention. And the problem with these cases is that it takes a long, long time for a result to happen. There are really three options. One is, it goes to litigation, and the ophthalmologists are successful in showing that their conduct was appropriate. If that happens, then obviously there'll be a great sigh of relief. And I think for the most part, people will be, you know, sensitive to the fact that their conduct can be challenged, but they'll be more comfortable than not.

Second possibility is, they are not successful. And the whistleblowers prevail in this case. I think that result will trigger a great deal will give us some information as to what...perhaps what is appropriate and what is not appropriate. It's gonna be hard to understand exactly what one or two or three criteria may have been the cause of the finding. And that's one of the challenges that we have. That's why we look at all the allegations and try to understand what could it be that could trigger a verdict that went against the ophthalmologist.

The third possibility is the settlement. And settlements happen in these cases at very, very high rate simply because the potential loss is extraordinary. If there is a settlement that usually generates some kind of a document where the government will articulate what it considered to be inappropriate conduct. And usually that helps give us guidance. The problem with this case is that government is not directly involved. This is being pursued by the whistleblowers. So it's an almost unprecedented situation here. We may not have that traditional guidance that we get. We just don't know.

So, I would say to you that those are all long-term results. I think the short-term result is what's going on right now, the fact that we're having this discussion. People are asking the same questions that you're asking, "What are the potential problems here? What are the allegations? What can I do to reduce my risk?" And I think those are the things that are going to most significantly impact co-management today. It's clear the government has made it very clear. Co-management, when done properly, is perfectly legitimate. So it's incumbent on ophthalmology practices and optometry practices, to be sure to look at what they're doing and make sure that their conduct is compliant.

Tal Raviv: That's perfect. Thank you so much, everybody.