Does Physician Billing for Hospital-Based Nurse Practitioner Visits Violate the Stark Law?

Carolyn Buppert, NP, JD


March 19, 2009

Our hospital employs many nurse practitioners to assist physicians and surgeons. If a nurse practitioner conducts a follow-up visit and the physician also sees the patient, can the physician bill for the follow-up visit? Does this violate the Stark Law?

Response from Carolyn Buppert, NP, JD
Attorney, Law Office of Carolyn Buppert, PC, Bethesda, Maryland

You should consult your hospital's attorney about Stark Law questions and compliance issues. That being said, if a physician group asks a hospital to hire a nurse practitioner to assist the group, the hospital does so, and the physician group bills for the services of the nurse practitioner, there are at least 3 legal problems with the arrangement:

1. There may be a compliance issue for the physician practice. If a patient has had surgery, the surgeon is reimbursed through a "global fee" for the surgery. The global fee includes preoperative visits, the surgery, and postoperative visits. If a surgeon is not going to perform the postoperative visit, the surgeon must formally transfer the patient's care to another clinician. If care is transferred, then the global fee for that patient is split; ie, the surgeon is paid for the intraoperative service and another clinician is paid for the postoperative care. A surgeon who accepts a global fee that includes payment for pre- and postoperative care that he or she did not supply has a compliance problem.

If a patient has not had surgery and, therefore, physician reimbursement is not covered by a global fee, a physician may bill for his or her own services to a hospitalized patient or for services rendered by a nurse practitioner under the "shared visit" rules. The rules on shared visits are found in the Medicare Claims Processing Manual, Chapter 12, Section 30.6.1. To bill a shared visit, the physician and nurse practitioner must be employed by the same group or have a contractual arrangement such that they are members of the same group practice. Also, the nurse practitioner must have reassigned his or her right to bill to the physician. The rules on shared visits apply to evaluation and management only, not to consultations. In the situation that you describe, the physician is not complying with the shared-visit rules, and therefore should not be billing for work conducted by the hospital-employed nurse practitioner.

Note that if 2 bills are submitted on the same day for a nurse practitioner visit and a same-specialty physician visit, one of the bills will be denied.

2. There may be a Stark issue for both the physicians and the hospital. The Stark Laws prohibit physicians from referring Medicare patients for certain designated health services (DHS) to an entity with which the physician or a member of the physician's immediate family has a financial relationship, unless an exception applies. The law also prohibits an entity from presenting or causing to be presented a bill or claim to anyone for a DHS furnished as a result of a prohibited referral. The government could interpret an arrangement whereby a hospital supplies nurse practitioners to assist physicians (by providing billable physician services) as a financial relationship, with the objective of inducing the physicians to refer patients to the hospital.

3. The arrangement may violate anti-kickback laws. Under those laws, there are criminal and/or civil penalties for individuals or entities that knowingly and willfully offer, pay, solicit, or receive remuneration (anything of value, in cash or in kind) in order to induce the referral of business reimbursable by a healthcare program. If a hospital supplies nurse practitioners to perform services for a private physician group, that could be considered provision of something of value to induce the physicians to refer business to the hospital.

I know of no cases in which physicians or hospitals have been prosecuted for having these arrangements. It is a gray area, in that hospitals have many reasons for hiring nurse practitioners, including decreasing the length of stay and improving the quality of care. I recommend that when hospitals analyze their arrangements with physicians to determine whether there are Stark Law or kickback implications, they include these arrangements as deserving of attention.


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