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group receiving the courtesy is determined in a manner that does not take into account directly or indirectly any group members ability to refer to, or otherwise generate federal health care program business for the physician.• A physician’s regular and consistent practice of extending professional courtesy by waiving otherwise applicable copayments for services rendered to a group of persons would not implicate the anti-kickback statute as long as the membership in the group is determined in a manner that does not take into account directly or indirectly any group member’s ability to refer to, or otherwise generate federal health care program business for the physician.• Any waiver of copayment practice, including that described in the preceding paragraph, does not violate the prohibition against inducements to beneficiaries (42 U.S.C. §1320a-7a(a)(5)) if the patient for whom the copayment is waived is a federal health care program beneficiary who is not financially needy.On March 26, 2004, the Center for Medicare and Medicaid Services (“CMS”) issued an interim final rule, which addressed the self-referral law and created regulatory exceptions to the self-referral law for financial relationships that CMS determines do not pose a risk of fraud or abuse.The rule became effective on July 26, 2004. One of the exceptions created by the rule deals with professional courtesy. CMS defined “professional courtesy” in 42 C.F.R. §411.351 to mean the “provision of free or discounted health care items or services to a physician or his or her immediate family members or office staff.” To qualify for the new exception, 42 C.F.R. §411.357(s) requires that the arrangement meet the following six conditions:• The professional courtesy is offered to all physicians on the entity's bona fide medical staff or in the entity's local community without regard to the volume or value of referrals or other business generated between the parties;• The health care items and services provided are of a type routinely provided by the entity;• The entity's professional courtesy policy is set out in writing and approved in advance by the governing body of the health care provider;• The professional courtesy is not offered to any physician (or immediate family member) who is a Federal health care program beneficiary, unless there has been a good faith showing of financial need;• The professional courtesy arrangement does not violate the anti-kickback statute or any Federal or state law or regulation governing billing or claims submission.Even though it is now much clearer as to when a physician may extend professional courtesy to another person, physicians must exercise caution before extending professional courtesy discounts to other members of the profession to ensure that the arrangement does not violate either the self-referral laws or the anti-kickback laws. Whether a particular professional courtesy arrangement violates either the self-referral laws or the ants will turn on the specific facts presented. It is indeed a sad reflection of our society when the provision of a courtesy may entitle a benefactor to no more than a series of legal entanglements. Of course, these pieces of legislation do allow professional courtesy discounts to be given to those colleagues who have not and will not ever refer patients to the discounting physician. Even in this case, however, the provider of services may not bill the patient's insurance company for the usual cost of such a visit if a professional courtesy is to be given, as such a practice would constitute a fraudulent insurance activity under state law. Moreover, if the extension of professional courtesy is a common practice within the office, the filing of any insurance may be troublesome, as the insurance company properly may argue that any fee requested is not the physician's "usual and customary" fee for a service provided to a physician.Extensive research has failed to reveal any instances where a physician has been prosecuted by either the OIG or the Department of Justice based on the extension of professional courtesy to another physician. The AMA has been previously advised informally by the OIG that the OIG is unlikely to initiate a fraud or abuse case investigation related to the traditional act of professional courtesy. However, the issuance by the OIG of its Guidance Statement concerning professional courtesy arrangements may indicate a change in the OIG’s position.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: February 2013 PROFESSIONAL LIABILITY INSURANCE REQUIREMENTS PART I - OPTIONS FOR MEETING FINANCIAL RESPONSIBILITY REQUIREMENTS Every Florida licensed physician is required to comply with the financial responsibility requirements of Section 458.320, Florida Statutes. This statute requires a physician to demonstrate to the Board of Medicine and the Department of Health that he or she is financially able to pay claims arising out of the rendering or failure to render medical care or services. The law provides the physician with the following options:Ø Obtain and maintain professional liability coverage in an amount not less than $100,000 per claim, with a minimum annual aggregate of not less than $300,000, from an authorized insurer, from a surplus lines insurer, from a risk retention group, from the Joint Underwriting Association, or through a plan of self-insurance as provided in s. 627.357 (Self-insurance is discussed in Part II). If the physician has hospital privileges the amounts are $250,000/$750,000 respectively.Ø Maintain an escrow account consisting of cash or assets eligible for deposit in accordance with s. 625.52 in the per claim amounts specified above.Ø Obtain and maintain an unexpired, irrevocable letter of credit in an amount not less than $100,000 per claim, with a minimum aggregate available of credit of not less than $300,000. The letter must be payable upon presentment of a final judgment awarding damages or upon presentment of a settlement agreement. The letter must be nonassignable and nontransferable and must be issued by a bank doing business in Florida. If the physician has hospital privileges the amounts are $250,000/$750,000 respectively.Ø Certain physicians are exempt from demonstrating one of the abovementioned methods of financial responsibility. Exemptions are discussed in Part III.It is important to note that none of the options listed above may be used for litigation costs or attorney’s fees for the defense of any medical malpractice claim.If a physician chooses to carry professional liability insurance, the statute requires the physician to notify the Department of the cancellation or nonrenewal of his or her insurance. The physician must demonstrate to the Department that he or she has chosen a new method of demonstrating financial responsibility. If the physician is unable to demonstrate this to the Department, the Department must suspend the physician’s license until he or she is able to do so.A physician is subject to the Board’s disciplinary process if he or she makes any deceptive, untrue or fraudulent representations with respect to any requirements relating to the financial responsibility requirements. All physicians must notify the Department of any change in how they meet the financial responsibility requirements.PART II - THE DECISION TO SELF-INSURE A physician in Florida may choose to meet the financial responsibility requirements set forth in Section 458.320, Florida Statutes by “self-insuring.” But it is important for the physician to know what this involves. A physician who self-insures must be in compliance with Section 627.357, Florida Statutes. A physician or group of physicians is authorized to self-insure upon
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