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Don't Flirt With Fraud When Delegating to Support Personnel

MANAGED CARE August 1996. © MediMedia USA
Legal Forum

Don't Flirt With Fraud When Delegating to Support Personnel

Neil Caesar, J.D.

Neil Caesar, J.D.

Physicians who want their practices to thrive in a managed care environment recognize that a key to success is effective delegation of responsibility. To increase revenues despite shrinking reimbursement, physicians need to increase the number of patients they serve. Until someone invents the 30-hour work day, that will require bringing in junior physicians or utilizing fully the skills of registered nurses, physician assistants, nurse practitioners and the like.

Many physicians make substantial use of physician assistants and nurse practitioners, both inside and outside the office. But some do not realize that their actions expose them to substantial legal risk under the Medicare and Medicaid programs. They may find themselves subject to large repayment obligations, and still larger fines and penalties, for potential violations of the False Claims Act and other federal laws.

'Incident to' services

On the surface, Medicare and Medicaid rules are fairly clear. When a support professional provides a service in a physician's office, it usually must be billed as if the physician had provided the service himself or herself. Such services are reimbursed at the physician's rate and are known as services rendered incident to the physician's professional services.

To qualify under the rules for these "incident to" services, the physician and support professional must satisfy a number of criteria. First, the physician must directly supervise the support professionals. Direct supervision in the office setting does not mean that the physician must be present in the same room. But the physician must be in the office suite and immediately available to provide assistance and direction throughout the time the aide is performing services. Thus, unless one of the limited exceptions applies (see below), Medicare and Medicaid should not pay for services rendered by a physician support professional outside the physician's office, or inside the office if the physician is not generally available in the office suite.

Many state laws permit certain support professionals to operate far more independently. And for a while some Medicare carriers tacitly condoned this looser supervision. It doesn't help that the Health Care Financing Administration is mute on many of the specifics about the proper role of nonphysicians treating Medicare patients. No federal guidelines, for example, specify how many PAs a physician may supervise simultaneously, or whether on-site accessibility by the physician could include accessibility in a different building physically connected to the physician's office building (as in many hospital campus medical office buildings, for example).

Medicare officials do acknowledge that Medicare could appropriately be billed for services provided by a PA when the physician did not see the patient. Medicare does pay specifically for services provided by a nonphysician during a minimal office visit with an established patient, even when a physician isn't present. However, officials in the Office of Coverage and Eligibility Policy have noted that the types of services thus covered by Medicare depend on the patient's history, the prior involvement of the physician and the level of services provided. None of this is spelled out in detail in the Medicare rules.

In many physician offices, support professionals assume much more responsibility for the treatment of patients. I have known of situations in which PAs do detailed history and exam procedures or second- and third-level office visits, and where support professionals have given injections at a physician's branch office, without any on-site physician.

Thus, it is not clear when, if ever, you may bill for a higher level of services provided by a support professional, unless the services qualify under the "incident to" rules or their exceptions. The prudent course of action is to ensure that the services of your support professionals qualify for the low-level examination CPT code, which specifically permits physician absence, or qualify for one of the few exceptions to the direct personal supervision requirement of the "incident to" rules.

No crackdown — yet

All of this confusion has invited misuse of the system. Many PAs have their own substantial patient loads. At times, patients are not even aware that they are being treated by a nonphysician. I have heard of situations where a single physician supervises more than a dozen PAs, each with his or her own patient load. PAs have provided inpatient care far beyond what is specifically permitted for inpatients by Medicare, with these services then being billed by the physicians as if they had personally provided them.

So far, I have not seen the government pursue these violations with the criminal and civil penalties available under the various anti-fraud-and-abuse laws. But the danger is there, and it is substantial. If you bill for the services of a PA under your provider number, you are claiming (explicitly or implicitly) that the service was provided either by you or by the PA as an "incident to" service. If you did not satisfy the "incident to" criteria, and submit Medicare/Medicaid claims stating an entitlement to payment for these services, you are in effect saying either that you provided a service you did not actually provide or that your support professional provided a service under conditions that were not actually present. The government certainly may argue that these are false claims.

Indeed, this situation also permits a disgruntled patient or former employee to pursue qui tam litigation as a surrogate for the government in pursing these violations. A successful qui tam litigation entitles the plaintiff (called a relator) to obtain a percentage of the restitution, interest and penalties ultimately paid to the government. The potentially huge court awards to follow are a clear incentive to whistle-blowing.

Exceptions to the rules

There are key exceptions to the "incident to" rules. One exception allows a qualified support professional to visit a patient's home without the physician's presence when the patient qualifies as homebound under Medicare's detailed definition. Perhaps more important, if the patient is in a specifically designated rural health professional shortage area (HPSA), physicians need only be accessible by telephone. Thus, physicians who provide services in rural areas may make significantly greater use of their support profes- sionals. In general, though, physicians must acknowledge that support professionals provide services to the physician's patients. Patients do not belong to, and are not under the care of, the support professional. A physician is not capable of supervising a large number of PAs at once. Finally, the Medicare rules stating that a physician must be present somewhere in the office suite mean just what they say. A physician who fails to appreciate the difference between state law and Medicare and Medicaid law on this point may be visited by the government's representatives.

Neil B. Caesar is president of The Health Law Center (Neil B. Caesar Law Associates, PA), a national health law/consulting practice in Greenville, S.C.

MANAGED CARE August 1996. ©1996 Stezzi Communications