PAs and NPs: 4 Legal Considerations for Practices

October 1, 2014

Demand for nonphysician providers has grown exponentially, but not all medical practices are taking the proper precautions and considerations.

Across the country, demand for nonphysician providers has grown exponentially.  According to the 2013 Horne Medical Office Staff Salary Survey, there has been a 68 percent jump in the number of nonphysician providers added to hospitals and practices between 2009 and 2013.  Although there are multiple reasons for this increase, the need to see more patients efficiently, while still providing a high level of care, is largely the force behind this increase.

When physician practices look to retain physician assistants, nurse practitioners, and other nonphysician providers, they often focus on finding a provider with good experience, who agrees to the schedule and financial terms being offered.  Often, practices do not take the time to evaluate any state or federal laws that might apply to the nonphysician provider or the supervision and billing rules that might be applicable. 

Here are some legal issues to consider when hiring a nonphysician provider:

1. The level of supervision required for nonphysician providers may depend on their licensure and the laws of the state in which their practice is located.  In some states, nonphysician providers have more independence than others. However, the type of provider they are, also dictates the amount of independence. Failure to provide required supervision and oversight can create a risk for the practice, both for noncompliance with state laws and from a malpractice perspective.  In many states these laws are in flux, so a practice should regularly check for any changes that could impact the approach being taken with regard to the type of nonphysician providers they employ. 

2. The rules regarding how a particular type of nonphysician provider can be billed varies by payer.  Every practice must check with its payers regarding whether particular nonphysician providers must be separately credentialed, or whether they may be billed incident-to a physician.  At the same time, it’s also important that a practice not overuse incident-to billing (or an equivalent payer approach) without researching whether it is appropriate.  For example, regularly using incident-to billing for a PA seeing a homebound patient, when the supervising physician is not onsite to supervise, is a common issue that arises and should be discussed with counsel to make sure it is appropriate. A full investigation of proper billing for nonphysician providers, based on your practice’s unique operations, is essential.

3. Many states require a written agreement with nonphysician providers.  This may be called a “collaboration agreement” or something else, but typically is required to be in writing and spells out the scope of practice of the nonphysician provider as well as the obligations of a designated supervising physician. Many states require that a copy be provided to the state.  Practices must check the state requirements for each type of nonphysician provider they employ, since the rules may differ. Additionally, if prescription authority is being granted to a nonphysician provider, the practice should assure that necessary forms are completed and filed with the state (if required), and that any mandated oversight or review of prescriptions is satisfied.

4. In drafting an employment agreement with a nonphysician provider, be sure to talk with counsel about the role of such individuals in your practice.  Many nonphysician providers develop a following with patients and can easily leave a practice and take a patient base with them.  Including noncompete, nonsolicitation, nondisparagement and similar provisions (where allowed by law) in the practice’s written agreement with such providers may be advisable.

Undoubtedly, there is an important role for nonphysician providers in many physician practices.  Before adding one to your practice, make sure you are familiar with the legal and billing requirements applicable to those relationships. Examining the full impact of any new provider on a practice can make all the difference in a successful outcome.