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or misleading information is guilty of a third degree felony, punishable by five years in prison and a fine of $5,000. Moreover, any violation of this statute would be reported to the Board of Medicine, which would take appropriate action against the provider's license.For all of the above reasons, a physician should carefully consider whether even a routine prescription should be renewed without a thorough examination on the part of the physician. Even if the physician decides to grant the renewal, however, he or she must carefully consider not only the appropriate charge, but how to code such a service. In no event should a physician charge a fee equivalent to that associated with an actual examination when the patient is not actually seen by the doctor. This article is presented for educational purposes only and should not be taken as a substitute for legal advice, which should be obtained from personal legal counsel. Nevertheless, the FMA hopes that the information provided here and in its other publications continues to assist physicians in answering many of their most common legal questions allowing them to treat patients, instead of addressing legal concerns. Last Update: October 2005 PRIVATE CONTRACTING AND MEDICARE People who choose to participate in Medicare receive not only coverage but also protection from paying excessive fees for physician services. Medicare enrollees have always been free to pay physicians for any service Medicare does not cover.When Medicare covers a service, Medicare pays the bill. When Medicare does not cover a service, Medicare enrollees can pay the bill out of their own pocket. When Medicare coverage is uncertain in a particular case, a physician can provide the service, submit the bill, and notify the enrollee in writing that if it is denied, the enrollee will pay the bill. Also the patient cannot bill Medicare.The Medicare Prescription Drug Improvement and Modernization Act of 2003 allows physicians to enter into "private contracts" with Medicare enrollees. The law allows physicians to contract with Medicare enrollees and set their own fees for services covered by Medicare. These private contracts must state explicitly that the patient must pay the entire fee charged by the physician for these services, the physician may not bill Medicare, and the contracts may not be signed in emergencies.Physicians who want to privately contract with Medicare enrollees for services covered by Medicare must declare that they will not bill Medicare for any services for two years. This ensures that all Medicare enrollees are treated equitably and are informed in advance whether a doctor accepts Medicare or will expect the patient to pay the entire bill. It also prevents private contracts from creating a new opportunity for fraud by unscrupulous physicians who could attempt to double bill both Medicare and the patient.MEDICARE ENROLLEES CAN STILL BUY SERVICES NOT COVERED BY MEDICARE.This does not change under the new law. Payment for anything not covered by Medicare, such as routine annual physicals or screening tests for prostate cancer, is a matter between patient and doctor. Physicians who bill Medicare for services Medicare does cover may continue to charge their usual fee-for-service amount to Medicare enrollees for services Medicare does not cover.THE NEW LAW AFFECTS ONLY SERVICES COVERED BY MEDICARE.All physicians may provide services not covered by Medicare to Medicare enrollees without private contracts. Physicians who provide Medicare enrollees with services not covered by Medicare can continue to charge Medicare enrollees for these services and can continue to participate in Medicare.THE NEW LAW AFFECTS ONLY PEOPLE WHO CHOOSE MEDICARE.Medicare coverage of physician services is a voluntary program with a monthly premium paid by eligible individuals who choose to enroll. For those who do not choose to enroll in Medicare, physicians may charge their usual fee for any service without any effect on the physicians' Medicare status.THE NEW LAW EXPANDS OPTIONS FOR PHYSICIANS.Under private contracts, physicians who opt out of Medicare can charge Medicare enrollees any amount for services covered by Medicare. Physicians must, however, treat all Medicare enrollees alike. If they establish private contracts with some, they cannot bill Medicare for others. Medicare enrollees, however, may privately contract with a physician for some services and still use Medicare for services from other physicians who do bill Medicare.PHYSICIANS CAN PROVIDE CARE WHEN COVERAGE IS UNCERTAIN.As always, if a physician who bills Medicare is uncertain whether a service will be covered by Medicare, the physician can provide the service without a private contract. The physician can simply provide the enrollee with an "advance beneficiary notice" stating that the service may not be covered by Medicare and that the enrollee will have to pay for the service in full if Medicare does not pay the bill.For answers to questions, call 1-800-MEDICARE or visit www.medicare.gov.This article is presented for educational purposes only and should not be taken as a substitute for legal advice, which should be obtained from personal legal counsel. Nevertheless, the FMA hopes that the information provided here and in its other publications continues to assist physicians in answering many of their most common legal questions allowing them to treat patients, instead of addressing legal concerns. Last update: October 2005 PROFESSIONAL COURTESY As members of the medical community, physicians are blessed to be part of a profession in which mutual respect and courtesy are the norm. One of the ways in which this collegiality often has been expressed has been through the extension of the professional courtesy by medical providers to others within the profession, as physicians frequently provide professional services without charge or for a greatly reduced fee to other medical professionals.With the passage of so-called "self-referral" and “anti-kickback” laws on both federal and state levels, however, many physicians have been forced to reevaluate their extension of professional courtesy. Until recently, however, it was unclear whether the extension of professional courtesy by a physician to another physician violated those same laws. Due to the release of the Guidance Statement by the OIG in September 2000 and the recent publication of the final Stark II regulations, much of the uncertainty surrounding professional courtesy is gone.The Health Insurance Portability and Accountability Act (also known as the “Kennedy-Kassebaum Law” or “HIPAA”) signed into law on August 21, 1996, and the Guidance Statement issued by the OIG in September 2000, resolved the question as to the “anti-kickback” law. The Kennedy-Kassebaum Law amended the federal anti-kickback act to specifically include free services within the definition of “remuneration.” As such, extending professional courtesy through providing free care to another physician could be viewed as a violation of the anti-kickback law, if there is any likelihood that the other member may refer (or already had referred) a patient to the physician.In October 2000, the OIG issued a Guidance Statement, which addressed whether professional courtesy arrangements may violate the fraud and abuse laws. In that Statement, the OIG stated that whether professional courtesy arrangements violate the law are determined by two factors:(1) how the recipients of the professional courtesy are selected; and (2) how the professional courtesy is extended. In an effort to clarify its policy on professional courtesy, the OIG set forth the following observations for physicians to consider:• A physician’s regular and consistent practice of extending professional courtesy by waiving the entire fee for the service rendered to a group of persons (including employees, physicians, and/or family members) may not violate any of the fraud and abuse laws as long as membership in the