Legal Pitfalls When Employing Nonphysician Providers

Nonphysician providers can help counteract the physician shortage, but be sure to consider these important legal requirements when employing them.

This country is facing a shortage of physicians and nurses in the very near future. This is especially true in rural areas, where even recruitment support and other initiatives are falling short of bringing in needed healthcare providers. 

There are many proposed solutions to the physician shortage problem, such as allowing more individuals into medical schools and increasing the number of residency training programs. I have also heard some proposals to loosen immigration laws to allow in more physicians trained outside the United States.  All of these suggestions bear consideration and are likely to be explored in the years to come.

One approach being used by many to address the current physician shortage is increased reliance on physician extenders or non-physician providers (NPPs). NPPs include nurse practitioners, physician assistants, nurse midwives, and a variety of other practitioners that work in medical practices and other medical facilities across the country. It’s anticipated that the demand for such practitioners will continue to rise in the future (and we may find a shortage of NPPs eventually as well).

I have routinely prepared contracts for NPPs over the years and can report that the number of such contracts has greatly increased as practices of every specialty continue to find places for such practitioners in their organizations. In addition, NPPs are being hired to work in medical spas and in other nontraditional roles, which make use of their training and experience. It’s clear that medical practices and hospitals view NPPs as not only a source of high-quality care that can help fill a physician gap, but there is also an appreciation for the cost, which is below that of physicians.

Some physicians believe that PAs and NPs serve a limited purpose and are being pushed into roles beyond that for which they are trained. This is potentially true, and physicians need to assure that NPPs brought into their practices are properly trained and provide only those services within their experience and training. For physicians who are wary of training or mentoring other practitioners, it is important to hire only experienced NPPs.

When looking to hire an NPP, make certain you are familiar with requirements that might apply:

1. NPPs cannot practice beyond the scope of their license and every state is different. Be clear on what your NPP can legally do for your practice and do not push them beyond their licensure. Be sure to also obtain appropriate malpractice insurance that matches the NPP’s job description. I have dealt with many practices that allowed NPPs to operate beyond their scope of license and suffered significant legal consequences as a result.

2. Every health plan has its own rules when it comes to billing for NPPs, even Medicare. Some allow NPPs to be separately credentialed, while others permit billing under the physician’s name and provider number. To find out how your payers will respond to an NPP, contact the payers and review your payer contracts. Reimbursement for NPPs varies among payers, although many plans pay for NPP services at 85 percent or more of the physician fee schedule. Remember, billing improperly or fraudulently for an NPP’s services can have a negative outcome for the practice.

3. Many states require a physician to have a written supervision agreement with an NPP which is filed with the state and outlines the relationship of the parties. This agreement may require a certain number of face-to-face meetings, training, or other oversight by the physician. Failure to file this agreement can be a legal violation for both the practice and the NPP, depending on the state.

4. If the NPP will have prescriptive authority, permission may need to be filed with the state and renewed from time to time. The prescriptive authority may come with a requirement that a physician oversee the prescribing done by the NPP ,and in some cases, he may need to countersign all prescriptions.

While searching for solutions to the impending physician shortage, consider what financial and other benefits might be created by bringing an NPP into your practice. As always, make sure you do your homework by becoming familiar with billing and legal requirements that an NPP presents.