For the first time, the HHS Office of Inspector General has determined that a significant number of services billed by certain physicians are performed by unqualified nonphysicians.

In an innovative study that recovery audit contractors (RACs) may replicate, OIG found that, during the first quarter of 2007, when physicians billed for more than 24 hours of services in a day, 51% of the services were performed by nonphysicians. Unqualified nonphysicians performed 21% of those services, including invasive procedures (e.g., surgery, chemotherapy), according to the report, which was posted on the OIG Web site on Aug. 5. Medicare allows physicians to bill for more than 24 hours worth of services in a day to capture charges for legitimate work performed by nonphysicians (e.g., physician assistants) incident to the physician’s professional services, but focusing on this subset helped OIG quantify a compliance and quality risk stemming from unlicensed or untrained nonphysicians.

“This report should be a wake-up call,” says Jean Acevedo, a former practice manager and now a physician coding and billing consultant in Florida.

It wasn’t easy to identify this problem because CMS has no modifier to distinguish physician services from nonphysician services provided incident-to the physician. (Both appear on the claim under the physician’s national provider identifier.) For this report, OIG had to design a clever method for flagging incident-to services and then determine whether the nonphysicians who provided them were qualified. But now OIG has paved the way for RACs to follow suit, and given the findings, it’s a sure bet they will, Acevedo says.

What heightens the risk for physicians is the recent trend toward Medicare contractors adding qualifications to local coverage decisions (LCDs) for physicians and nonphysicians, she says. That makes it an overpayment or potential false claim to bill for a service subject to an LCD if it were provided by a physician or nonphysician who lacked credentials that the LCD required to perform the service. Nonphysicians include medical assistants and nurses as well as nonphysician practitioners (NPPs), such as physician assistants, who have advanced training.

Acevedo is baffled by CMS’s refusal to implement a modifier for incident-to services since Medicare pays 100% of the fee schedule for services whether they’re performed by the physician or incident to the physician as long as specific conditions are met (e.g., direct supervision). OIG advocates creation of a modifier because there is no way for CMS to look at a claim and distinguish between services personally performed by a physician and services performed by a nonphysician, she says. But CMS demurs, saying it would be “operationally difficult” for physicians to add a modifier for incident-to services because they are “often shared by physicians and staff.” CMS said that muddies the waters of what was personally performed by the physician versus the nonphysician. But Acevedo says that’s hooey. Since when, she says, has the hassle factor dissuaded CMS from pursuing its goals? And it’s not true that services are shared, Acevedo contends. The point of the incident-to designation is that qualified nonphysicians perform services independently as long as a physician is around to consult with or intervene if necessary. “There needs to be a modifier,” she says. “It makes the doctor stop and think whether the service was really performed by a competent staff member pursuant to the incident-to rules.”

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