Licensure and scope of practice: Key aspects of state regulation

PA and NP licensure and scope of practice are regulated primarily at the state level, and states are anything but uniform in this regard. State boards of licensure (boards of nursing for NPs and either boards of medicine or boards of physician assistants for PAs) dictate limitations on such APPs’ scopes of practice and the extent to which they must be supervised, if at all, by physicians. Notably, a state’s rules may differ for PAs and NPs, although some states have made the regulatory regimes governing PAs and NPs fairly similar. Therefore, compliance professionals must be attuned to the differences between rules governing each type of APP.

Main categories of PA and NP regulation that compliance professionals should track based on their workforce and location include the following:

• Independent, transitional, or physician-supervised practice: A state may allow APPs to practice independently of physician supervision. Alternatively, a state may require that such APPs only practice under the supervision of or in collaboration with a physician. States may use either supervision or collaboration to refer to the involvement of a physician in overseeing the APP. Supervision generally relates to the oversight of an APP by a physician, whereas collaboration may refer to an agreement providing consultative services and general practice collaboration. The level of supervision or collaboration may also differ based on the practice setting. In some states, such APPs may transition from providing services under physician supervision to independent practice (after a defined period of supervised practice). In states where some type of physician relationship is required, the scope of practice of the APP generally may not exceed that of the supervising physician.

• Practice agreements: Many states where independent APP practice is not allowed require an agreement between an APP and the supervising or collaborating physician. These practice agreements document the terms of the relationship between the APP and the physician. They often must contain statutorily or regulatorily required elements, such as the frequency and mode of interaction between the APP and the physician, procedures for reviewing patient charts or outcomes, availability for consultation, backup supervision or collaboration procedures, and a list of drugs or devices that the APP is permitted to prescribe. Some states require these agreements to be filed with the state and/or reviewed and updated periodically. It is common for applicable rules to mandate that the agreements be kept on file at the primary location where either the APP or physician practices.

• Supervision/collaboration: For states where some form of supervision or collaboration is required, applicable rules often detail the permissible manner and mode of such interaction between APPs and physicians.

  • Location: Most states require physicians to be available for consultation via telecommunication in real-time. Other states permit broader supervision to occur remotely (e.g., monthly or quarterly check-ins). In contrast, some states impose periodic in-person meeting requirements or require the supervising physician to be within a certain distance from the APP. Most of these laws do not clearly address how supervision must be provided when care is delivered only virtually.

  • Ratios: Many states limit the number of APPs a physician can supervise at once based on either full-time equivalent hours or number of individuals. Some states impose one ratio requirement for both PAs and NPs, while other states apply one ratio for supervision of PAs and another for NPs.

• Chart reviews: States may require that the supervising or collaborating physician review a specific percentage of charts of patients seen by the APP or for which the APP has issued a prescription. States may prescribe that these reviews occur monthly, quarterly, or other frequencies and some states require that the APP and physician document the review in writing.

• Prescriptive practice: In most states, PAs and NPs have prescriptive authority by virtue of their license, irrespective of whether independent practice is allowed, but that authority is not unfettered. Where a physician relationship is required, APP prescriptive practice is generally limited to that of the supervising physician. States may impose a variety of additional requirements or restrictions on APPs’ prescribing authority.

  • Additional approvals: Some states require APPs to separately apply for prescriptive authority on top of their licenses. In other states, APPs may only apply for prescriptive authority after meeting specific education and mentoring requirements.

  • Formularies: Many states limit APPs’ prescriptive authority to non-dangerous or nonscheduled drugs or to lists of drugs or drug classes included in the APP’s agreement with a supervising physician.

  • Physician review: While few states require active physician involvement in APP prescribing (e.g., cosigning scripts or charts), some states require physicians to review a subset of prescriptions issued by the APP or need the APP to include particular identifying information of the supervising physician on the script.

As statutes and regulations evolve to address telehealth, provider organizations need to adjust their care delivery workforce structure and compliance functions to reflect new realities of PA and NP practice.

Billing requirements: Major aspects of federal regulation

Medicaid, Medicare, and other third-party payors generally pay bills directly submitted by an APP under such APP’s own national provider identifier (NPI). There are also several limited instances in which Medicare permits physicians to bill for services furnished by their contracted APPs and collect reimbursement at a higher rate as a result.

• Direct billing: Medicare permits PAs and NPs to bill directly for services they furnish. However, Medicare only pays 85% of the Medicare Physician Fee Schedule (MPFS) rate for services rendered by APPs.

• Incident-to billing: For individual services furnished in an outpatient setting in part by a physician and in part by either a PA or an NP, Medicare permits the physician to bill under their own NPI for the jointly performed service and collect 100% of the MPFS rate if specific incident-to requirements are satisfied. Services that may be performed by APPs on an incident-to basis include (i) services ordinarily rendered by a physician’s office staff person, and (ii) services that would typically be personally performed by the physician.^[2] A physician may only bill for the services of an APP on an incident-to basis when each of the following five requirements is met:

  1. The services must be of a type that is commonly furnished and considered medically appropriate to provide in a physician’s office setting.^[3]

  2. The APP performing the services must qualify as “auxiliary personnel” acting under the physician’s supervision and be an expense incurred by the physician or the legal entity billing and collecting for the incident-to services.^[4]

  3. There must be an initial physician’s service provided to the patient to which the services of the APP are considered an incidental part (i.e., an APP service furnished to a new patient or to an established patient with a new issue for which the physician has not seen the patient and initiated the course of treatment does not constitute an incident-to service).^[5]

  4. The physician must perform subsequent services at a frequency that reflects their active participation in and management of the course of treatment (but the physician need not actually render a service each time the APP sees the patient).^[6]

  5. The APP furnishing the service generally must do so under direct physician supervision (the physician does not need to be physically present in the same room but must be in the office suite and immediately available to provide assistance and direction).^[7] In group practices, the physician supervising the APP need not be the same physician treating the patient.^[8]

PA and NP billing rules under Medicare are typically of greatest concern to compliance professionals due to the complexity of complying with these requirements and the risk of civil monetary penalties and potential False Claims Act (FCA) liability resulting from submitting improper bills. Violations of the Civil Monetary Penalties Law^[9] or the FCA^[10] can result in substantial financial penalties and, in egregious cases, criminal liability under the FCA and exclusion from participation in federal healthcare programs under the exclusion statute.^[11]

COVID-19 waivers made APPs’ practice more flexible

Waivers of customary PA and NP requirements—while necessary for expanding access to care during the COVID-19 pandemic—created a compliance minefield that provider organizations continue to navigate.

During the pandemic, most states issued temporary waivers relaxing licensure and scope of practice requirements for healthcare professionals, including PAs and NPs. For example, some states allowed PAs and NPs to furnish services without practice agreements or formal supervisory relationships, waived APP-physician ratio limitations, suspended requirements regarding chart reviews and documented meetings between APPs and physicians, or allowed APPs to prescribe specific drugs without adhering to usual procedures. In addition, APPs were temporarily permitted to practice in many states where they were not licensed. This made it easier for telehealth delivered by APPs to proliferate.

The Centers for Medicare & Medicaid Services also issued temporary waivers of various federal healthcare program requirements. In Medicare, incident-to billing rules regarding a physician’s direct supervision of APPs were relaxed during the pandemic. Under the temporary change, physicians could bill incident-to services when providing supervision to PAs and NPs via real-time, interactive audio-visual technology; the physician no longer had to be physically present in the office suite but needed only to be immediately available via the required technology. Similarly, APPs furnishing services incident-to a physician’s service could provide such services via telehealth, assuming all other requirements were satisfied.

Most of the waivers have been rescinded in whole or part, and provider organizations that rely heavily on these waivers to deliver services need to ensure that they have properly implemented or reinstated proper protocols. If the 2023 MPFS proposed rule is finalized as currently drafted, Medicare incident-to billing rules are set to revert to requiring in-person direct supervision at the end of the calendar year in which the federal public health emergency is declared over (as of now, 2023). Provider organizations can expect that billing during and following the pandemic will continue to be put under the microscope—especially to the extent services are furnished or supervised via telehealth modalities.