MEDICINE ‑- PROFESSIONAL REGULATION ‑- OPTOMETRY
1. An agreement between an optometrist and an ophthalmologist whereby the optometrist refers a patient to the ophthalmologist for surgery with the understanding that the referring optometrist will provide post-operative care does not violate the anti-rebate provisions of chapter 19.68 RCW or RCW 18.130.180(21), so long as each party performs services he or she is licensed to perform and bills only for those services.
2. The Medical Disciplinary Board lacks authority to prohibit ophthalmologists from delegating post-operative management of eye surgery patients to optometrists, if the prohibition amounts to an effort to regulate the practice of optometry or to prevent optometrists from performing functions they are licensed to perform; however, the Medical Disciplinary Board does have authority to define the scope of post-operative care and define the extent of a medical doctor's responsibility for such post-operative care.
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November 14, 1988
Acting Executive Secretary for the Washington State Medical Disciplinary Board
Department of Licensing|
Olympia, WA 98504
Cite as: AGO 1988 No. 28
Dear Ms. Crerar:
By letter previously acknowledged, your predecessor requested our opinion on the following questions:
1. Does referral of a patient by an optometrist for surgery by an ophthalmologist, with the understanding that the referring optometrist will provide the post-operative care, violate chapter 19.68 RCW and RCW 18.130.180(21)?
[[Orig. Op. Page 2]]
2. Does the Medical Disciplinary Board have authority to prohibit ophthalmologists from delegating post-operative management of eye surgery patients to optometrists?
3. Would the Medical Disciplinary Board violate state or federal anti-trust laws should it determine to adopt a rule or rules resulting in the prohibition set out in question 2 above?
4. If the answer to question 3 is "yes," in whole or in part, would the Medical Disciplinary Board, and its members individually, have "state action immunity" if such rules result in the prohibition set out in question 2 above?
We answer the first question in the negative and the remainder of the questions as set forth below.
Does referral of a patient by an optometrist for surgery by an ophthalmologist, with the understanding that the referring optometrist will provide the post-operative care,1/
violate chapter 19.68 RCW and RCW 18.130.180(21)?
Chapter 18.130 RCW is designed to
strengthen and consolidate disciplinary procedures for the licensed health and health-related professions and businesses by providing a uniform disciplinary act with standardized procedures for the enforcement of laws the purpose of which is to assure the public of the adequacy of professional competence and conduct in the healing arts. [[Orig. Op. Page 3]] RCW 18.130.010. RCW 18.130.180 sets forth conduct, acts, or conditions that constitute unprofessional conduct for any license holder under the jurisdiction of chapter 18.130 RCW. One act that constitutes unprofessional conduct is a violation of chapter 19.68 RCW. RCW 19.68.020; RCW 18.130.180(21). Chapter 19.68 RCW prohibits the practice of rebating by persons licensed by the state to engage in certain health and health-related professions and businesses. Your first question requires an analysis of the interplay between these two chapters, focusing particularly on the rebate provisions of chapter 19.68 RCW.
A finding of unprofessional conduct under RCW 18.130.180 subjects the license holder or applicant to discipline set forth in RCW 18.130.160 as well as to any discipline authorized in the statutes governing a particular profession. RCW 18.130.040(3). The boards governing licenses of both optometrists and ophthalmologists are under the jurisdiction of chapter 18.130 RCW, causing both professions to fall under the guidelines of professional conduct set forth in RCW 18.130.180(21) and the prohibitions set forth in chapter 19.68 RCW. RCW 18.130.040(2)(b)(vii), (ix).
RCW 19.68.010 provides in part:
It shall be unlawful for any person, firm, corporation or association, whether organized as a cooperative, or for profit or nonprofit, to pay, or offer to pay or allow, directly or indirectly, to any person licensed by the state of Washington to engage in the practice of medicine and surgery, drugless treatment in any form, dentistry, or pharmacy and it shall be unlawful for such person to request, receive or allow, directly or indirectly, a rebate, refund, commission, unearned discount or profit by means of a credit or other valuable consideration in connection with the referral of patients to any person, firm, corporation or association, or in connection with the furnishings of medical, surgical or dental care, diagnosis, treatment or service, on the sale, rental, furnishing or supplying of clinical laboratory supplies or services of any kind, drugs, medication, or medical supplies, or any other goods, services or supplies prescribed for medical diagnosis, care or treatment . . . .
Although this statute is not an example of clarity, it can be reduced to three elements: (1) there must be a payment of a rebate, refund, commission, unearned discount, or profit by means of credit or other valuable consideration; (2) the payment must be in connection with the referral of patients or in connection with the furnishing of medical, surgical, or dental care, diagnosis, treatment or service; and (3) the recipient of the [[Orig. Op. Page 4]] payment must be a person licensed by the State of Washington to engage in the practice of medicine and surgery, drugless treatment in any form, dentistry, or pharmacy.
Since both the optometrist and the ophthalmologist presumably would be licensed by the State2/
and since your question is posed in the context of the referral of a patient, the last two elements seem to be met. Therefore, we need focus only on the first element. Our inquiry is whether the understanding between the referring optometrist and the operating ophthalmologist that the optometrist will provide the post-operative care is "directly or indirectly, a rebate, refund, commission, unearned discount or profit by means of credit or other valuable consideration."3/
The statute's declaration of intent and the pre‑enactment history lead us to conclude that this element is not fulfilled and that no violation of chapter 19.68 RCW has occurred.
RCW 19.68.040 provides in part:
It is the intent of this article [chapter], and this article [chapter] shall be so construed, that persons so licensed shall only be authorized by law to charge or receive compensation for professional services rendered if such services are actually rendered by the licensee and not otherwise. . . .
This language indicates that the statute was designed primarily to protect the public from hidden or inflated charges which might be incurred when doing business with persons licensed by the State to engage in health-related professions. To carry out this intention chapter 19.68 RCW was designed to prevent activities that result in charges for anything other than services actually rendered.
Washington appellate courts have construed chapter 19.68 RCW only once. In Day v. Inland Empire Optical, Inc., 76 Wn.2d 407, 456 P.2d 1011 (1969), the Supreme Court considered the business activities of five licensed ophthalmologists engaged in practice [[Orig. Op. Page 5]] in a medical partnership. These ophthalmologists were also the sole owners of a corporation which conducted an optical dispensing business located in the same building as their practice.4/
TheDay court held that accumulation of profits, stock appreciation, increase in net worth, possible tax advantages and right to a distribution of income from a corporate entity owned by referring physicians constituted "unearned discount or profit" in violation of chapter 19.68 RCW. Referring to the intent section of chapter 19.68 RCW, the court stated
the legislature made it clear that physicians are authorized to charge their patients, or receive compensation, for professional services only if the professional services are actually rendered by the physician to his patient.
76 Wn.2d at 419.
A case note onDay is instructive in that it provides the historical background for the passage of chapter 204, Laws of 1949, the predecessor to chapter 19.68 RCW. See Recent Development, 45 Wash. L. Rev. 838 (1970). Chapter 19.68 RCW was passed during the time when other states and the Federal Trade Commission were passing anti-kickback legislation and rules in response to a number of cases filed against doctors who were accused of receiving payments under rebate arrangements. 45 Wash. L. Rev. at 839;see also Lilly v. Commissioner of Internal Revenue, 188 F.2d 269, 271 (4th Cir. 1951). United States v. American Optical Co., 97 F. Supp. 66 (N.D. Ill. 1951). These statutes, including chapter 19.68 RCW, primarily were to guard against the receipt of secret profits through dealings with patients. 45 Wash. L. Rev. at 839.
In light of the intent statement in RCW 19.68.040 and the pre‑enactment history of the statute, we believe that one must look beyond the referral to determine if the patients are paying for anything other than services actually rendered by the referring health professional. InDay v. Inland Empire Optical, Inc., the ophthalmologists were receiving a profit from the [[Orig. Op. Page 6]] optical business each time they referred their patients for services to be performed by the unsupervised personnel of the optical business. TheDay court focused on the fact that the referring doctors were receiving profits when they were not actually performing or supervising the performance of the optical services rendered. 76 Wn.2d at 417-19.
In the circumstances posed by your question, neither the optometrist nor the ophthalmologist will be receiving a profit for services other than those services actually rendered by them. The ophthalmologist's services will be the surgery; the optometrist's services will be any post-operative care he or she is licensed to provide. The referral does not, by itself, result in any hidden or inflated charges, unnecessary surgery or care, or profits for services not rendered by the referring professional. The referral arrangement, alone, does not suggest any actual rebate agreement or unearned charges. Therefore, these circumstances do not come within the payment or receipt of valuable consideration intended to be prohibited by chapter 19.68 RCW and RCW 18.130.180(21).
Does the Medical Disciplinary Board have authority to prohibit ophthalmologists from delegating post-operative management of eye surgery patients to optometrists?
The Medical Disciplinary Board was established by chapter 18.72 RCW as an administrative agency to assist with the regulation of members of the medical profession licensed to practice medicine and surgery in the State of Washington. RCW 18.72.010, 18.72.040. The Board is a "disciplining authority" under the provisions of chapter 18.130 RCW. RCW 18.130.020(1).
The Board's authority is set forth in RCW 18.130.050. It may impose any sanction listed in RCW 18.130.160 against a licensed applicant or license holder in the event of a finding of unprofessional conduct by the applicant or license holder. RCW 18.130.050(13).
In light of our response to the first question, the Board is not authorized under RCW 18.130.180 to punish a physician for agreeing to delegate operative management of eye surgery patients to optometrists. The agreement, by itself, is not a violation of RCW 18.130.180(21) or chapter 19.68 RCW and is not defined explicitly as unprofessional conduct under any other provision of RCW 18.130.180. Therefore, we need to focus on whether the Board could adopt a regulation or adopt a standard of professional conduct or practice under chapter 18.30 [18.130] RCW that would prohibit such delegation or whether there is another statute under which the Board could prohibit such delegation.
[[Orig. Op. Page 7]]
RCW 18.130.050 authorizes the Board to adopt, amend and rescind rules deemed necessary to carry out chapter 18.130 RCW and to adopt standards of professional conduct or practice. RCW 18.130.050(1), (12). Any rule or standard adopted by the Board must be reasonably consistent with the statutory provisions adopted by the Legislature. Otherwise such regulations will be invalid attempts to amend chapter 18.130 RCW. See State v. Thompson, 95 Wn.2d 753, 630 P.2d 925 (1981).
Although the Board may adopt rules to carry out all of the provisions of chapter 18.130 RCW, most of the provisions only set forth the procedure under which the Board operates. RCW 18.13.180 [18.130.180], on the other hand, very broadly and comprehensively defines unprofessional conduct and we focus on it for the Board's authority to promulgate a rule that prohibits ophthalmologists from delegating post-operative management of eye surgery patients to optometrists.
RCW 18.130.180 sets forth 24 acts and conditions which constitute unprofessional conduct. Our reading of the statute reveals that at least 8 of those acts or conditions have some potential for providing the authority to prohibit the delegation in question. See RCW 18.130.180(1), (3), (4), (7), (10), (13), (14), (16). Your question, however, does not provide any facts surrounding the delegation of post-operative care. Absent speculation on our part as to the specific inappropriate conduct to be prohibited and the regulatory language proposed we cannot determine whether any of these statutory provisions provide adequate authority for a regulation. Therefore, we are unable to conclude whether or not RCW 18.130.180 provides the requisite authority for the regulatory prohibition. The statute could be interpreted only in specific fact situation.
In addition to analyzing chapter 18.130 RCW for requisite authority we have reviewed the state constitution and other statutes governing health care professionals. Article 20, section 2 of the Washington State Constitution states: "The legislature shall enact laws to regulate the practice of medicine and surgery, and the sale of drugs and medicine." In accordance with the constitution, a complex system has evolved governing health care professionals. As previously noted, chapter 18.72 RCW establishes the Medical Disciplinary Board; chapter 18.130 RCW sets forth the Board's authority in regulating health professionals under its jurisdiction; and chapter 18.120 RCW sets forth the criteria for the regulations of health professionals. In addition, chapter 18.71 RCW addresses the licensing of physicians in general.
We have reviewed this statutory scheme and have been unable to locate any statutory basis, other than RCW 18.130.180, for the prohibition suggested by your question. In addition, the [[Orig. Op. Page 8]] comprehensiveness of the statutory scheme covering ophthalmologists leads us to conclude that the Medical Disciplinary Board does not have the authority to regulate the practice of ophthalmologists beyond that expressly set forth or reasonably implied by statute.5/
In sum, the Medical Disciplinary Board's only potential source of authority to promulgate a regulation prohibiting the delegation of post-operative care by an ophthalmologist to an optometrist is found in RCW 18.130.180. Because you have not provided the factual setting for delegation or the proposed regulatory language we are unable to determine whether a prohibition is authorized by this statute.
Questions 3 and 4
Your third and fourth questions inquire into the antitrust implications of a prohibition adopted in accordance with our response to your first two questions. Because we are unable to determine whether such a prohibition is appropriate without additional information, these questions will not be addressed.
We trust the foregoing will be of assistance to you.
Very truly yours,
KENNETH O. EIKENBERRY
TERESE NEU RICHMOND
Assistant Attorney General
*** FOOTNOTES ***
1/Questions 1 and 2 both relate to post-operative care to be provided by an optometrist. Note that we do not attempt to define the scope of post-operative care covered by an agreement. This is a factual issue that would depend on the agreement itself as limited by the nature of the services each party is licensed to provide. Although we are aware of specific factual controversies, these cannot be resolved in this legal opinion.
2/We assume for purposes of your question that chapter 19.68 RCW covers the practice of optometry as that term is defined by RCW 18.53.010, as well as the practice of ophthalmology, but we do not address that issue here.
3/Your inquiry does not concern the enforceability of the agreement between the optometrist and ophthalmologist, or whether such agreement violates RCW 18.86.020-18.86.050, and we do not address those issues.
4/For a discussion of Day v. Inland Empire Optical, Inc., supra, see AGO 1975 No. 24 in which we opined that nothing contained in chapter 19.68 RCW prohibits a licensed physician from owning all or part of a nursing home in which he is responsible for any patient care, but that the physician cannot receive financial benefit from goods or services furnished to patients when he prescribes the goods or services or when he refers the patient to the institution.
5/In addition, any attempt by the Board to regulate optometrists directly would be inconsistent with RCW 18.130.040(2)(b)(vii), RCW 18.71.030(4), and RCW 18.72.020(2) and the independent regulation of optometrists under chapters 18.53 and 18.54 RCW.