Make the Most of Midlevels

July 15, 2005

More physicians are finding nonphysician providers - often called physician extenders or midlevels - truly do extend their ability to provide better care and patient access. Just be sure you're clear on how to bill for their services and manage risk.

The night began like most other on-call shifts for Sally Wentross, with a phone call at home from a certified nurse-midwife. The nurse-midwife's patient was showing early signs of needing a C-section. Wentross, the supervising obstetrician at Women's Healthcare Associates in Portland, Ore., listened, concurred with the treatment plan, and requested updates every three or four hours.

At 2 a.m., the call came for an emergency C-section. Wentross immediately drove the short distance to the hospital and received an update from the nurse-midwife, who assisted with a successful birth. Wentross patted the newborn on the butt, and went home to sleep.

What's unique about this, you ask? Not a thing. It is a textbook example of how physicians and nonphysician providers - such as nurse-midwives, nurse practitioners, and physician assistants - work together to provide superb patient care, while helping the practice thrive.

"The birth went exactly as it would have if I had been consulting with one of my [physician] colleagues," says Wentross, whose practice has six certified nurse-midwives and 34 physicians. "But we have some patients who really want a nurse-midwife's perspective at the bedside, so I think we actually retain more patients because of that relationship."

With physicians busier than ever, and often in short supply, more doctors are relying on the help of nonphysician providers, variously called midlevels or extenders. Since 1990, the number of U.S. physicians has barely kept pace with the nation's growth, but the number of physician assistants in clinical practice has doubled, and nurse practitioners have tripled. If you don't have any nonphysician providers in your office yet, you'll probably add some soon. Given this, it is vital for you to successfully manage your relationship with nonphysician providers, a relationship that extends from the exam room to the back office and beyond.

"The philosophy you need to establish is that you're all part of a team," says Thomas Weida, a professor of family and community medicine at Pennsylvania State University and medical director of University Physician Group in Hershey, Pa. "If the team doesn't work well together, you can't provide good care for the patients."

Just as in sports, building a solid clinical team requires expert coaching and a clear understanding of each player's role. For nonphysician providers, issues to be addressed extend well beyond their responsibility in the exam room, including state-mandated supervision requirements, the intricacies of billing, and malpractice insurance, to name just three.

Scope of practice, billing

You need to know a nonphysician provider's scope of practice before you begin working with her, and certainly before you hire her. But first you should have a grasp of your payers' rules concerning midlevels - whatever services your nonphysician provider can legally perform won't matter if you can't get paid for them.

"There's a scope of practice and there's a scope of billing, and they're just not the same thing," says Nancy Trubee, director of specialty care practice management for University Primary & Specialty Care Practices, which provides management support for physicians and nonclinical staff affiliated with the University Hospitals Health System in Cleveland. "That's the dilemma for any physician thinking about putting an extender in his office."

Why is it a dilemma? Because under certain circumstances, nonphysician providers may legally provide services for which the nation's most influential payer - Medicare - will not cover. 

Medicare will pay for nonphysician providers' services under two sets of rules: when services are "incident-to" a physician's care and billed under the physician's Medicare provider number, and when services are provided "in collaboration" with a physician but billed under a nonphysician provider's own number. The difference is critical: Medicare pays more for incident-to services, which require greater direct physician supervision. Medicare's reimbursement rate in such cases is equivalent to 100 percent of a physician's fee, so incident-to billing results in greater payments. Medicare pays collaborating services, on the other hand, at 85 percent of the physician's rate - and just 65 percent for nurse-midwives, who may provide well-woman care and other services to Medicare beneficiaries.

Chances are you'd prefer not to give away 15 percent or more of your revenue, so most experts advise that you set up your billing systems to allow nonphysician providers to bill incident-to as often as is appropriate and legal. To do this under Medicare, four conditions must be met:

  • The nonphysician provider must be an employee, not a contractor.
  • The physician must initiate the care.
  • The physician must continue to actively participate in managing the course of treatment.
  • The services must be performed under a physician's direct supervision.

Just to be safe, most practice managers interpret this last point to mean the supervising physician must be in the office when nonphysician provider services are delivered.

This may sound simple enough, but there are a maddening number of exceptions to these Medicare rules. For example, nurse practitioners and other advanced practice nurses retain the traditional independence granted nurses, and thus may bill Medicare independently, but physician assistants must always work under the direct supervision of a physician, so their services must always be billed as incident-to.

Many private payers refuse to follow Medicare's lead by credentialing nurse practitioners. If this is the case, these providers must work under the supervision of a physician following the incident-to billing rules.


To further complicate matters, states have varying rules concerning the level of physician supervision required for nonphysician providers. Fifteen states require nurse practitioners to have supervising physicians; 20 mandate that nurse practitioners develop a consultative relationship with physicians; the others are mum on the issue. Similar disparities in state rules exist for other types of nonphysician providers. You must know the rules in your own state. Your state and local professional associations should be able to help.

Agreements help

How to cope with these ambiguities? Two approaches can simplify nonphysician provider billing and supervision. The most common is to tailor the practice's procedures to bill incident-to at every opportunity. The other is to abandon incident-to billing altogether.

Trubee falls into the pro-incident-to camp.

"You can't control the patients on the schedule according to who their insurer is," she says. "You can't assume that you're going to be able to have the extender see only patients with payers that will credential them and pay 100 percent [of the physician's fee]. So you have to tailor all of your internal operations to fit the highest standard of compliance, which is incident-to billing."

To meet Medicare's incident-to standards, Trubee recommends practices develop written collaborative agreements with their nonphysician provider employees that strictly limit their scope of services. Trubee recommends that the agreement bar nonphysician providers from seeing new patients or returning patients with new problems, and restrict their care to following treatment plans developed by one of the practice's physicians.

Examples of this kind of service include follow-up care, chronic disease education, and other routine care. Her agreement also prohibits nonphysician provider employees from rendering care in a hospital, where face-to-face physician supervision is rare.

She also conducts regular education sessions, especially with new staff, to ensure the practice adheres to these rules, and provides all nonphysician providers with an ink stamp for patient charts that reminds them to include the supervising physician's name in the record.

And Trubee's office audits its physicians annually to ensure they are billing incident-to in all appropriate cases. "Once a year is enough to remind people that they're doing it or not doing it," she says.

On the other end of the spectrum, some practice managers advise physicians to sidestep the incident-to requirements altogether.

"What we teach is [that] it's much easier to simply let the nonphysician provider bill under their own number because it takes away the worry that you haven't met all the requirements for supervision," says Judy Richardson, senior consultant for Hill & Associates, a national healthcare consulting group in Wilmington, N.C. "Yes, [services] are billed and reimbursed at 85 percent of a physician's fee schedule, but it should enable your physician to see more new patients and patients with bigger problems. So the revenue cycle should be the same or better."

Not surprisingly, few practices are willing to take that chance. "Most of them just want their 100 percent of the physician's fee schedule," says Richardson. "The problem is, they can't remember all of the rules, and so they place themselves in a liability bind if Medicare performs an audit and realizes the physician wasn't in the suite when the services were delivered."

Malpractice fears

Even more than the fear of a Medicare audit, worries about heightened malpractice exposure may be keeping some practices from hiring nonphysician providers. It would seem that your exposure to malpractice claims increases with the complexity of care your employees provide. Upon examination, though, this theory doesn't hold water.

Statistically, nonphysician providers as a group are many times less likely than physicians to be named as primary defendants in a malpractice case. And malpractice insurance premiums for nonphysician providers are a fraction of those for physicians.


"Hiring a nonphysician provider poses no more of a liability risk than hiring a nurse," says Melanie Balestra, a nurse practitioner-attorney in Irvine, Calif. who specializes in medical malpractice cases. Balestra contends that collaborating with a nonphysician provider is the liability equivalent of one physician consulting with another.

"If you believe the studies that show most malpractice cases arise because the patient didn't perceive that they were listened to, then nonphysician providers might pose lesser risk than physicians," adds Debi Croes, principal of the Croes-Oliva Group, a healthcare consulting firm in Burlington, Mass. Midlevels "tend to excel in those very arenas because they take more time with patients and do more education."

Still, it pays to establish procedures that reduce the chances of a malpractice claim. If there is one risk-management approach that everyone seems to agree upon, it's simple respect.

"The key to reducing the litigation situation is the same as developing a good working relationship - respect for and appreciation of the important role that [nonphysician providers] can provide," says Wentross.

Adds Weida: "Just follow the philosophy of treating your midlevels like you'd want to be treated. You're all part of the same team."

Todd Stein is a freelance health and business writer based in Portland, Ore. The former writer/producer of HIMSS Newsbreak, a weekly Internet broadcast on healthcare information technology, Stein also has written for the Los Angeles Times and San Francisco Magazine. He can be reached via editor@physicianspractice.com.

This article originally appeared in the July/August 2005 issue of Physicians Practice.