The Regulation of Mid-Level Provider Practice

As discussed in a previous issue of Health Capital Topics (see The Scope of Non-Physician Provider Practice – Volume 3, Issue 2, February 2010), while mid-level providers are authorized to provide certain services autonomously and in lieu of physicians, they are still considered primarily to be physician-extenders, in providing an array of services incident to physicians.

Mid-level providers face significant regulatory scrutiny as mandated by state and federal law, which govern the supervision and scope of mid-level providers and differ by state, specialty, practice setting, and the provider’s specific role in the provision of care.

However, services billed under Medicare incident-to rules include those services provided by a mid-level provider without direct supervision of a licensed physician, regardless of specialty or whether the non-physician provider (NPP) was the primary service provider.1 Further, Medicare allows physicians to bill for incident-to services provided by mid-level practitioners at 100 percent of the physician fee schedule. Incident-to services are defined as services provided by qualified non-physician professionals that are integral to and continuous with the services provided by the primary physician.2

Some midlevel providers, e.g., physician assistants, nurse practitioners, and clinical nurse specialists, are generally permitted to act as independent contractors and bill directly for their services at 85 percent of the physician fee schedule amount, when working more autonomously, in lieu, of a physician-collaborator.3

Also, certain mid-level providers are afforded the legal autonomy to form independent group practices, and provide certain services in lieu of primary care physicians.4 The autonomy afforded to these and other mid-level providers has even expanded to include supervision of other NPPs in lieu of physician supervision.5 Under the January 2010 update of the Hospital Outpatient Prospective Payment System, outpatient therapeutic services provided in a hospital setting must be directly supervised by either a physician or certain NPPs, i.e., clinical psychologists, physician assistants, nurse practitioners, clinical nurse specialists, and certified nurse midwives.6 These NPPs are permitted to provide direct supervision in lieu of physicians if they are authorizing to personally perform the services they are overseeing, as prescribed by the scope of practice rules derived by their state.7

Careful analysis and review by qualified legal counsel of the specific facts and circumstances regarding mid-level provider practice is an important step in maintaining corporate compliance and adherence to regulatory edicts.

1
“Incident to” Services, Centers for Medicare and Medicaid Services, MLN Matters, SE0441, 2004, http://www.cms.hhs.gov/mlnmattersarticles/downloads/se0441.pdf  (Accessed 02/01/2010).

2
“Incident to” Services, Centers for Medicare and Medicaid Services, MLN Matters, SE0441, 2004, http://www.cms.hhs.gov/mlnmattersarticles/downloads/se0441.pdf  (Accessed 02/01/2010).

3
“110 -  Physician Assistant Services Payment Methodology,” and “120 – Nurse Practitioner (NP) and Clinical Nurse Specialist (CNS) Services,” in “Chapter 12 – Physicians/Nonphysician Practitioners,” in “Medicare Claims Processing Manual,”  Centers for Medicare and Medicaid Services, December 18, 2009.

4
“110 - Physician Assistant Services Payment Methodology,” and “120 – Nurse Practitioner (NP) and Clinical Nurse Specialist (CNS) Services,” in “Chapter 12 – Physicians/Nonphysician Practitioners,” in “Medicare Claims Processing Manual,”  Centers for Medicare and Medicaid Services, December 18, 2009.

5
“20.5.1 – Coverage of Outpatient Therapeutic Services Incident to a Physician’s Service Furnished on or After Jaunary 1, 2010,” in “January 2010 Update of the Hospital Outpatient Prospective Payment System (OPPS),” Centers for Medicare and Medicaid Services, the Department of Health and Human Services, Transmittal 116, Pub. 100-02 Medicare Benefit Policy, December 11, 2009.

6
“20.5.1 – Coverage of Outpatient Therapeutic Services Incident to a Physician’s Service Furnished on or After Jaunary 1, 2010,” in “January 2010 Update of the Hospital Outpatient Prospective Payment System (OPPS),” by the Centers for Medicare and Medicaid Services, the Department of Health and Human Services, Transmittal 116, Pub. 100-02 Medicare Benefit Policy, December 11, 2009.

7
“20.5.1 – Coverage of Outpatient Therapeutic Services Incident to a Physician’s Service Furnished on or After Jaunary 1, 2010,” in “January 2010 Update of the Hospital Outpatient Prospective Payment System (OPPS),” by the Centers for Medicare and Medicaid Services, the Department of Health and Human Services, Transmittal 116, Pub. 100-02 Medicare Benefit Policy, December 11, 2009.

© Health Capital Consultants
Todd A. Zigrang

Todd A. Zigrang, MBA, MHA, CVA, ASA, FACHE, ABV, is the President of Health Capital Consultants (HCC), where he focuses on the areas of valuation and financial analysis for hospitals, physician practices, and other healthcare enterprises. Mr. Zigrang has over 28 years of experience providing valuation, financial, transaction and strategic advisory services nationwide in over 2,000 transactions and joint ventures. Mr. Zigrang is also considered an expert in the field of healthcare compensation for physicians, executives and other professionals.

Mr. Zigrang is the co-author of "The Adviser’s Guide to Healthcare – 2nd Edition" [2015 – AICPA], numerous chapters in legal treatises and anthologies, and peer-reviewed and industry articles such as: The Accountant’s Business Manual (AICPA); Valuing Professional Practices and Licenses (Aspen Publishers); Valuation Strategies; Business Appraisal Practice; and, NACVA QuickRead. In addition to his contributions as an author, Mr. Zigrang has served as faculty before professional and trade associations such as the American Society of Appraisers (ASA); the National Association of Certified Valuators and Analysts (NACVA); Physician Hospitals of America (PHA); the Institute of Business Appraisers (IBA); the Healthcare Financial Management Association (HFMA); and, the CPA Leadership Institute.

Mr. Zigrang holds a Master of Science in Health Administration (MHA) and a Master of Business Administration (MBA) from the University of Missouri at Columbia. He is a Fellow of the American College of Healthcare Executives (FACHE) and holds the Certified Valuation Analyst (CVA) designation from NACVA. Mr. Zigrang also holds the Accredited Senior Appraiser (ASA) designation from the American Society of Appraisers, where he has served as President of the St. Louis Chapter. He is also a member of the America Association of Provider Compensation Professionals (AAPCP), AHLA, AICPA, NACVA, NSCHBC, and, the Society of OMS Administrators (SOMSA).

Jessica L. Bailey-Wheaton

Jessica L. Bailey-Wheaton, Esq., is Senior Vice President and General Counsel of HCC. Her work focuses on the areas of Certificate of Need (CON) preparation and consulting, as well as project management and consulting services related to the impact of both federal and state regulations on healthcare transactions. In that role, Ms. Bailey-Wheaton provides research services necessary to support certified opinions of value related to the Fair Market Value and Commercial Reasonableness of transactions related to healthcare enterprises, assets, and services.

She serves on the editorial board of NACVA’s The Value Examiner and is the current Co-Chair of the American Bar Association (ABA) Health Law Section’s Membership Committee and the Young Lawyer Division (YLD) Liaison to the ABA Health Law Section Governing Council. She has previously presented before the ABA, American Health Law Association (AHLA). NACVA, the National Society of Certified Healthcare Business Consultants (NSCHBC), and the American College of Surgeons.

Ms. Bailey-Wheaton is a member of the Missouri and Illinois Bars and holds a J.D., with a concentration in Health Law, from Saint Louis University School of Law.

Janvi R. Shah

Janvi R. Shah, MBA, MSF, serves as Senior Financial Analyst of HCC. Mrs. Shah holds a M.S. in Finance from Washington University Saint Louis. She develops fair market value and commercial reasonableness opinions related to healthcare enterprises, assets, and services. In addition she prepares, reviews and analyzes forecasted and pro forma financial statements to determine the most probable future net economic benefit related to healthcare enterprises, assets, and services and applies utilization demand and reimbursement trends to project professional medical revenue streams and ancillary services and technical component (ASTC) revenue streams.

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