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The U.S. Department of Health and Human Services’ Office of Inspector General (OIG) recently issued a favorable Advisory Opinion on a hospital arrangement in which the hospital was using its employed nurse practitioners to perform services that were traditionally performed by patients’ attending physicians. Specifically, if the attending physician elected to participate in the hospital’s program, the hospital’s NPs would be used to provide services to the physician’s patients who were admitted to the inpatient or observation units of the hospital.

The NPs’ services included initiating plans of care, implementing care protocols, making rounds in the assigned units, responding to laboratory or imaging results, addressing rapid changes in patients’ conditions, educating and supporting patients and their families, educating and supporting other nurses in the unit, supporting quality improvement initiatives, and discharge planning for the patients.

The physicians participating in the program were mostly primary care physicians and the program applied only to two general care units of the hospital. Most of the patients in these units were under active evaluation to determine the cause and/or extent of their illness and they greatly benefited from having a nurse practitioner readily available to assess changes in the patients’ condition more quickly and efficiently. The NPs performed all of the services in collaboration with the attending physicians, who continued to perform daily rounds for their patients and remained accountable for their patients’ care.

OIG acknowledged that the program could be suspect for potential fraud and abuse because it provided a benefit to the physicians (i.e., the free services of the NPs, which saves the physicians time and resources by not having to perform those services themselves), and such benefit could induce patient referrals from the physicians to the hospital. However, OIG ultimately concluded that the program presented a low risk of fraud and abuse and, therefore, would not be subject to sanctions under the federal Anti-Kickback Statute for three main reasons:

1)         The program was limited to the two non-surgical and non-specialty units of the hospital. The relevant distinction is that surgical or specialty units would be likely to generate more lucrative referrals for the hospital. Also, the program was open to all primary care physicians and was not targeted to any particular physicians based on their referrals or ability to make more lucrative referrals to the hospital. OIG also noted that the program did not involve any compensation paid to the physicians, and the hospital certified that any compensation it may pay to the physicians outside of the program under separate arrangements did not take into account the services performed by the NPs under the program.

2)         The arrangement contained many safeguards to reduce the risk of fraud and abuse, including the collaborative relationships between the nurse practitioners and physicians and continuing obligations on the part of the physicians to perform their daily rounds and maintain accountability for the patients’ care. Another important fact was that no payments were exchanged between the hospital and physicians under the program and the physicians and hospital continued to bill separately for their respective services. The physicians continued to be obligated to perform their own patient assessments and generate their own documentation in order to bill for their services, without relying on the services or documentation performed by the NPs (or, in other words, the physicians were not allowed to bill for the services rendered by the NPs). The hospital covered the costs of the NPs’ services and it certified that it did not separately bill payors for such services.

3)         Finally, the program was unlikely to increase costs to federal healthcare programs since the hospital did not bill payors for the services of the NPs (even though the NPs’ services could have been separately reimbursable by payors). The program also served an important role in promoting overall patient care and improving patients’ conditions at the hospital.

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