Department of Health and Human Services 
OFFICE OF 
INSPECTOR GENERAL 
Medicare Coverage of Non-Physician 
Practitioner Services 
June 2001 
OEI-02-00-00290  OFFICE OF INSPECTOR GENERAL 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, is to 
protect the integrity of the Department of Health and Human Services programs as well as the 
health and welfare of beneficiaries served by them. This statutory mission is carried out through 
a nationwide program of audits, investigations, inspections, sanctions, and fraud alerts. The 
Inspector General informs the Secretary of program and management problems and recommends 
legislative, regulatory, and operational approaches to correct them. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) is one of several components of the Office of 
Inspector General. It conducts short-term management and program evaluations (called 
inspections) that focus on issues of concern to the Department, the Congress, and the public. 
The inspection reports provide findings and recommendations on the efficiency, vulnerability, 
and effectiveness of departmental programs. 
OEI's New York Regional Office prepared this report under the direction of John I. Molnar, 
Regional Inspector General and Renee C. Dunn, Deputy Regional Inspector General. Principal 
OEI staff included: 
REGION  HEADQUARTERS 
Nancy Harrison, Project Leader  Jennifer Antico, Program Specialist 
Natasha Besch  Tricia Davis, Program Specialist 
Vincent Greiber  Brian Ritchie, Technical Support Staff 
Christi Macrina 
To obtain copies of this report, please call the New York Regional Office at 212-264-2000. 
Reports are also available on the World Wide Web at our home pate address: 
http://www.hhs.gov/oig/oei  Department of Health and Human Services 
OFFICE OF 
INSPECTOR GENERAL 
Medicare Coverage of Non-Physician 
Practitioner Services 
June 2001 
OEI-02-00-00290  E X E C U T I V E  S U M M A R Y  
PURPOSE 
To describe the scope of services nurse practitioners, clinical nurse specialists, and 
physician assistants provide to Medicare beneficiaries, and to identify any potential 
vulnerabilities that may have emerged since the Balanced Budget Act of 1997. 
BACKGROUND 
Nurse practitioners, clinical nurse specialists, and physician assistants are health care 
providers who practice either in collaboration with or under the supervision of a 
physician. We refer to them as non-physician practitioners. States are responsible for 
licensing and for setting the scopes of practice for all three specialties. Services provided 
by them can be reimbursed by Medicare Part B. 
The Balanced Budget Act of 1997 (BBA97) modified the way the Medicare program 
pays for their services. Prior to January 1, 1998, their services were reimbursed by 
Medicare only in rural areas and certain health care settings. Payments are now allowed 
in all geographic areas and health care settings permitted under State licensing laws. 
Furthermore, nurse practitioners and clinical nurse specialists are now allowed to bill 
Medicare directly. The services of a physician assistant, however, must continue to be 
billed by an employer. 
Our study is based on: a review of the State scopes of practice; an analysis of Medicare 
billing data from the years 1997, 1998, and 1999; and information obtained from 
Medicare Part B carrier medical directors. 
Because this inspections intent is to be a first look at the effect of the new coverage rules 
under BBA97, the findings are descriptive in nature. The inspection presents what the 
billing data show. It also describes the State scopes of practice that are used to control 
billing. It is not the purpose of this inspection to evaluate the benefits or disadvantages 
of non-physician practitioner services. 
FINDINGS 
Non-Physician Practitioner Billings Are Rising Rapidly 
It appears that the Balanced Budget Act of 1997 is having a substantial effect on non-
physician practitioner billing. In 1999, Medicare paid for 5.2 million services, compared 
to 1.2 million services in 1997. Because some of these services had been billed as 
incident to prior to 1997, we were unable to determine how much of the increase in 
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Medicare Coverage of Non-Physician Practitioner Services  OEI-02-00-00290  billings was due to real growth in services and how much was due to simple changes in 
billing practices. The top services billed were for office or outpatient visits in office 
settings. 
State Scopes of Practice Provide Little Guidance to Carriers 
Our analysis found that the State scopes of practice are broad and as a result provide little 
guidance that carriers can use to process claims. Most scopes of practice contain only a 
general statement about the responsibilities, education requirements, and a non-specific 
list of allowed duties and do not explicitly identify services that are complex or beyond 
their scope. Carriers voice concerns over non-physician practitioners performing 
services such as surgery and endoscopies. Furthermore, when a service is not addressed 
in a scope, it cannot be assumed that a non-physician practitioner cannot provide that 
service. Scopes, as well as Medicare, call for collaboration with a physician. This may 
have the effect of either limiting or expanding the services that are allowed. If a nurse 
practitioner is directed by a cardiologist to make a complex diagnosis, there is nothing in 
the scopes preventing such a practice. In fact, States generally have a vague definition 
for acts such as diagnosis. 
Carrier Monitoring of Non-Physician Practitioner Claims is Limited 
Although all but one Medicare carrier acknowledges that non-physician practitioners are 
included in post-payment reviews, most carriers confirm that no pre-payment edits exist 
to monitor their claims. Several carriers state that monitoring is limited by the broad 
language in their scope of practice. Sixteen carriers do not verify that the non-physician 
practitioners are working within their scope, and at least 22 carriers do not check the 
collaborative or supervisory agreements. Most information given to carriers from HCFA 
include basic Balanced Budget Act language, and directives to treat non-physician 
practitioners as a physician when monitoring their claims. 
CONCLUSION 
The Balanced Budget Act successfully opened up the medical practice to non-physician 
practitioners, regardless of care settings. Non-physician practitioner billings are rising 
rapidly, but controls, which are based on scopes of practice, are limited. State scopes of 
practice are vague and broad. As such, carriers do not have sufficient guidance to 
distinguish which non-physician practitioner services should be reimbursed by the 
program and which should not. This creates potential vulnerabilities, both from payment 
and quality of care standpoints. Therefore it may be appropriate to consider other 
additional controls for Medicare payments to non-physician practitioners. We plan to 
monitor non-physician practitioner services for both overall trends and for complex 
services. 
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Medicare Coverage of Non-Physician Practitioner Services  OEI-02-00-00290  Agency Comments 
We received comments on the draft report from the Health Care Financing 
Administration. They concur with our conclusion regarding vulnerabilities when non-
physician practitioners bill Medicare. They are, however, sensitive to increasing the 
monitoring burden on contractors. The HCFA expressed a willingness to work with the 
OIG to monitor vulnerabilities in non-physician practitioner billings. We plan to do 
additional work to identify specific vulnerabilities by examining the billing practices of 
non-physician practitioners. 
The full text of HCFAs comments are contained in Appendix F. 
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Medicare Coverage of Non-Physician Practitioner Services  OEI-02-00-00290  T A B L E  O F  C O N T E N T S  
PAGE

EXECUTIVE SUMMARY  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  i

INTRODUCTION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1

FINDINGS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  6

Non-Physician Practitioner Billings Rising  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  6

Scopes of Practice Provide Little Guidance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  7

Carrier Monitoring is Limited  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11

CONCLUSION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14

APPENDICES

A. Services and Costs  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15

B. Most Frequent Settings and Services, 1999  . . . . . . . . . . . . . . . . . . . . . . . . . . .  16

C. States Recognition of Non-Physician Practitioners . . . . . . . . . . . . . . . . . . . . . .  19

D. Prescriptive Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20

E. Review Criteria for State Scope of Practice  ............................... 21

F. Agency Comments  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22

Medicare Coverage of Non-Physician Practitioner Services  OEI-02-00-00290  I N T R O D U C T I O N  
PURPOSE 
To describe the scope of services nurse practitioners, clinical nurse specialists, and 
physician assistants provide to Medicare beneficiaries, and to identify any potential 
vulnerabilities that may have emerged since the Balanced Budget Act of 1997. 
BACKGROUND 
Nurse practitioners, clinical nurse specialists, and physician assistants are health care 
providers who practice either in collaboration with or under the supervision of a 
physician. States are responsible for licensing and for setting the scopes of practice for 
all three specialties. Nurse practitioners and clinical nurse specialists are licensed 
advanced practice registered nurses who have specialty training in primary care or acute 
care of patients. Both of these nurse specialties must practice in collaboration with a 
physician. In contrast, a physician assistant is a licensed health care professional who 
practices under the supervision of an immediately available physician responsible for 
delegating medical services to the physician assistant. All States limit the number of 
physician assistants a physician is allowed to supervise. Although there are other types 
of non-physician practitioners, such as clinical nurse midwives and nurse anesthetists, for 
the purposes of this inspection we will refer to nurse practitioners, clinical nurse 
specialists, and physician assistants collectively as non-physician practitioners. 
Medicare Payment 
Medicare provides health insurance to people who are 65 years and older, people who are 
disabled, and, people with permanent kidney failure. Medicare consists of two primary 
parts: Hospital Insurance, also known as Part A, and Supplementary Medical Insurance, 
also known as Part B. Medicare Part A provides coverage of institutional care such as 
inpatient hospital care, skilled nursing facility care, home health services, and hospice 
care. Medicare Part B pays for the cost of non-institutional care such as physician 
services, outpatient hospital services, medical equipment and supplies, as well as services 
provided by non-physician practitioners. Medicare uses entities called contractors to 
process claims. Fiscal intermediaries process Part A claims and carriers process Part B 
claims. Each Medicare Part B carrier must employ a medical director whose duties 
include: assisting in the review of claims; providing clinical judgment in medical review 
of claims; directing carrier personnel on the correct application of policy during claim 
adjudication; and providing advice to the Health Care Financing Administration (HCFA) 
on national coverage and payment policy. 
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Medicare Coverage of Non-Physician Practitioner Services  OEI-02-00-00290  To be reimbursed by Medicare, the non-physician practitioner must practice in 
accordance with State law.  This law is embodied in the State nurse practice acts, which 
are also known as the State scopes of practice. The scope of practice typically defines 
the practitioners practice, qualifications, board representation, and fee/ renewal 
schedule. The scopes may also list specific examples of responsibilities such as taking 
histories, patient care, education and training. 
The Balanced Budget Act of 1997 
Allowed Expanded Billing. The Balanced Budget Act of 1997 modified the way the 
Medicare program pays for non-physician practitioner services. Prior to January 1, 1998, 
these services were reimbursed by Medicare Part B only in certain geographical areas 
and health care settings. Nurse practitioner and clinical nurse specialist services were 
covered when provided in collaboration with a physician in nursing facilities in urban 
areas and in all settings in rural areas. They could also bill Medicare directly for services 
provided in rural areas. Physician assistant services were covered when provided under 
the supervision of a physician in hospitals and nursing facilities, as an assistant to 
surgery, in physician offices and patient homes in rural areas, and in a rural area 
designated as a health professional shortage area. 
The Act also removed the restrictions on settings. Effective January 1998, payment is 
now allowed for non-physician practitioner services in all geographic areas and health 
care settings permitted under State licensing laws, but only if no facility or other provider 
charges are paid in connection with the service. Nurse practitioners and clinical nurse 
specialists are now allowed to bill directly in all settings in both rural and urban areas. 
The services of a physician assistant, however, must continue to be billed through an 
employer. 
Clarified Education/Certification. The 1997 legislation clarifies the educational and/or 
certification requirements for certain non-physician practitioners to receive Medicare 
reimbursement. The regulations spell out the requirements as follows: 
Nurse practitioners must: 
  be a registered professional nurse; 
  be authorized to perform services in the State where they practice; 
	 be certified by the American Nurses Credentialing Center (ANCC) or 
comparable certifying agency; and 
  hold a Masters degree in Nursing, as of January 1, 2003. 
Clinical nurse specialists must: 
  be a registered nurse; 
  be licensed in the State where they practice; 
  be certified by the ANCC; and 
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Medicare Coverage of Non-Physician Practitioner Services  OEI-02-00-00290  	 hold a Masters degree in a defined clinical area of nursing from an 
accredited educational institution. 
Physician assistants must: 
  be licensed and authorized in the State where they practice and 
 	 either have graduated from an accredited educational program, or 
passed the National Certification Examination. 
Modified Reimbursement. The Act also set new reimbursement levels. It allows 
payment of 80 percent of the lesser of either (1) the actual charge or (2) 85 percent of the 
scheduled physician fee. Prior to the Act payment for nurse practitioner or clinical nurse 
specialist services, when furnished in all settings in a rural area, could have been made 
either directly to the nurse practitioner or clinical nurse specialist, or to the employer or 
contractor of the nurse practitioner or clinical nurse specialist at 75 percent of the 
physician fee schedule for services furnished in a hospital, 85 percent of the physician fee 
schedule for services furnished in other settings, and at 65 percent for assistant at surgery 
services. Payment for nurse practitioner services when furnished in skilled nursing 
facilities and nursing facilities in an urban area was made to the employer of the nurse 
practitioner at 85 percent of the physician fee schedule. Before the Act, payment for 
physician assistant services was made to the employer at 85 percent of the scheduled 
physician fee and at 65 percent of physician fee schedule for assistant to surgery services. 
Because the Act removed the restrictions on settings, interest has increased in the 
services non-physician practitioners are providing. The General Accounting Offices 
January 2000 report, Lessons Learned From HCFAs Implementation of Changes to 
Benefits, recommended that HCFA implement a recommendation made by an internal 
HCFA group that studied potential vulnerabilities brought about by the Acts changes. 
This group suggested that HCFA (1) survey the States to establish a national database of 
allowable practices for possible use in forming policies, (2) work with national 
accreditation bodies to establish standard minimum scopes of practice, and (3) that 
HCFA conduct a baseline study to determine the volume and type of services billed by 
clinical nurse specialists and nurse practitioners. At the present time, HCFAs Program 
Safeguard Contractor is conducting a baseline study in three States to determine the 
volume and type of services clinical nurse specialists and nurse practitioners are 
providing. 
The American Medical Association (AMA) is also interested in non-physician 
practitioner services. The AMA is leading a coalition of medical organizations that is 
concerned HCFA is not ensuring that advanced practice nurses are working in 
collaboration with a physician and within their scope of practice. 
Incident to services.  The Act did not affect any services provided incident to physicians 
services. Incident to services are provided by employees of the physician under the 
physicians direct on-site supervision.  Incident to services may be provided by nurse 
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Medicare Coverage of Non-Physician Practitioner Services  OEI-02-00-00290  practitioners, clinical nurse specialists, physician assistants, medical assistants, 
technicians, nurses, and others employed by the physician. These services continue to be 
paid at 100 percent of the physician fee schedule amount as though the physician 
personally performed the services. The physician does not have to indicate on the claim 
that a non-physician practitioner performed the service. This inspection did not set out to 
examine incident to services. It focuses on services that the non-physician practitioner 
bills directly and services that are billed, as is always the case for physician assistants, 
through the employer with the non-physician practitioner specialty indicated. Carriers 
have complained that incident to services are difficult to track. 
SCOPE 
This inspection is intended to be a first look at the effect of the Balanced Budget Act of 
1997 which enables non-physician practitioners to bill Medicare for all allowable 
services in all settings. The findings of this inspection are descriptive in nature. 
The inspection presents what the billing data show about the services provided to 
Medicare beneficiaries. It also describes the States scopes of practice that govern these 
practitioners. Any agreements between the physician and the practitioner, however, are 
not the focus of this inspection. These agreements are unique to each physician and 
practitioner. In order to effectively evaluate these agreements as a control mechanism, 
they would have to be reviewed on a case by case basis. That level of scrutiny was 
beyond the scope of this inspection. It is also not the purpose of this inspection to 
evaluate the benefits or disadvantages of services performed by non-physician 
practitioners. 
METHODOLOGY 
Data were collected from three sources: the State scope of practice; Medicare billing data 
from the years 1997, 1998, and 1999; and interviews with carrier medical directors. 
Scopes of practice. We collected scopes of practice for physician assistants in 50 States 
and Washington, D.C., and both the advanced practice scope and the registered nursing 
scope for clinical nurse specialists and nurse practitioners in 50 States. First, we 
reviewed a sample of State scopes to determine common characteristics of 
responsibilities. From these common characteristics we developed a review document 
for all scopes. This document included educational requirements, written collaborative 
agreements, Board oversight, physician supervision, a statement of scope, and particular 
services such as taking histories, diagnosis, therapy, and treatment/ care plan 
development. We reviewed each scope of practice and noted the services allowed in each 
State for each specialty. We also reviewed the requirements for both the supervisory and 
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Medicare Coverage of Non-Physician Practitioner Services  OEI-02-00-00290  collaborative agreements between the physician and the non-physician practitioner as 
well as the prescriptive authority addressed in each States scope of practice. See 
Appendix E for more details. 
Billing Data. We analyzed Medicare Part B services data for each of the three 
specialties from the Medicare Part B Extract and Summary System (BESS) for 1997, 
1998, and 1999. All service and charge data mentioned in this report reflect data for 
allowed services and allowed charges. We also examined settings and procedure 
codes. We concentrated on billing changes that have occurred since BBA97 and 
analyzed procedures with high increases in allowed services and/ or allowed charges. 
We also looked at procedures considered vulnerable by carrier medical directors. 
Medical Director Practices. We interviewed the 41 carrier medical directors from all 
the Medicare Part B carrier contractors. Our interviews focused on the process of 
reviewing non-physician practitioner claims and any changes in that process since 
BBA97. We asked about carrier screens and edits, use of State scopes of practice, and 
any concerns or potential vulnerabilities. The carriers also forwarded any of their non-
physician practitioner medical review policies and any instructions sent to them by 
HCFA. 
This inspection was conducted in accordance with the Quality Standards for 
Inspections issued by the Presidents Council on Integrity and Efficiency. 
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Medicare Coverage of Non-Physician Practitioner Services  OEI-02-00-00290  F I N D I N G S
Non-Physician Practitioner Billings Are Rising Rapidly
  It appears that the Balanced Budget Act is having a substantial effect on non-physician
practitioner billings to the Medicare program.  In 1999, BESS data show that Medicare
paid for 5.2 million non-physician practitioner services (See Chart 1).  This is a fourfold
increase since 1997, the year BBA97 expanded settings and allowed nurse practitioners
and clinical nurse specialists to bill Medicare directly in additional settings.  During this
same period, allowed charges also increased nearly fourfold from $55 million to $202
million (See Appendix A).  Because some of these services had been billed as incident
to prior to 1997, we were unable to determine how much of the increase in billings was
due to real growth in services and how much was due to simple changes in billing
practices.
                  Chart 1: Non-Physician Practitioner                        
          Allowed Services (in millions)            
      
      
      
      
      
      
      
      
      
      
      
      
      
      
Source: Medicare BESS data
In 1999, non-physician practitioners billed about half of their services in an office setting
and another quarter of services were billed from skilled nursing or nursing facilities.  The
top three services billed in 1999 were office or outpatient visit for the evaluation and
management of an established patient, subsequent nursing facility care for the evaluation
and management of the new or established patient (25 minutes), and subsequent nursing
facility care for the evaluation and management of the new or established patient (15
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Medicare Coverage of Non-Physician Practitioner Services                           OEI-02-00-00290 minutes), comprising almost a third of all services billed.  See Appendix B for more
details on billing data.
Although clinical nurse specialists have shown the greatest proportional increases in
services, nurse practitioners and physician assistants account for most of the overall
services in 1999 (See Chart 2).
                    Chart 2: Allowed Services 1999
Source: Medicare
BESS data
                    
State Scopes of Practice Provide Little Guidance to Carriers
Our analysis found that the State scopes of practice are broad and as a result provide little
guidance that carriers can use to process claims.  Scopes, as well as Medicare, call for
collaboration with a physician which may have the effect of either limiting or expanding
the services that non-physician practitioners may perform.
Generally, State Nursing Boards set the scope of practice for clinical nurse specialists and
nurse practitioners, while State Medical Boards set the physician assistant scope.  Some
States also defer to a national certifying bodys scope, such as that of the American
Nurses Credentialing Center, which similarly lacks detail (see Appendix C). 
Characteristics of the scopes are critical because they control what non-physician
practitioners can do in their State and thus what Medicare will reimburse.  It is important
to note that scopes were designed to implement medical practice and not to direct
Medicare reimbursement.  
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Medicare Coverage of Non-Physician Practitioner Services                           OEI-02-00-00290 Most scopes contain a statement about the responsibilities, a list of allowed duties, 
education requirements, supervisory/collaborative agreement requirements, and 
prescriptive authority. The scopes differ in the amount of detail given to each element. 
Additionally, with the exception of few physician assistant scopes, we found that no 
scope explicitly identifies services that these practitioners are not allowed to perform. 
Using just the scopes, it is difficult to determine if non-physician practitioner could 
provide highly complex services and be reimbursed by the Medicare program. Several 
carrier medical directors note that relying on the scopes to determine services that can be 
billed to the program may be problematic. One medical director comments that the 
scopes are so vast and vague. [Non-physician practitioners] can do anything that is 
assigned to them. A few medical directors suggest that more clarifications of duties are 
needed to improve the way their claims are reviewed. 
Also, non-physician practitioners may provide services if they are delegated by the 
collaborating or supervising physician (as mentioned, the nurse practitioner and the 
clinical nurse specialist must collaborate with a physician, and a physician assistant must 
be supervised by a physician). For example, if a nurse practitioner working in 
collaboration with a cardiologist is directed to make a complex diagnosis, there is nothing 
in the scopes of practice preventing such a practice. In fact, States generally have a 
vague definition for acts such as diagnosis. 
Scopes in 11 States provide guidance for an agreement between the clinical nurse 
specialist and/or the nurse practitioner and the collaborating physician. In some cases the 
guidance for the collaborative agreements merely contains a definition of collaboration. 
More State scopes provide requirements of what the physicians supervisory role is in 
relation to a physician assistant. For example, some physician assistant scopes may 
require a supervisory agreement to provide specific information about the availability of 
the supervising physician, type of supervision required (physical, electronic, or 
continuous), or whether the agreement must be in writing. However, in the case of either 
the collaborative or the supervisory agreement, details that are not addressed within the 
State scope are left to the discretion of the physician and the non-physician practitioner. 
Scopes do not fully describe non-physician practitioner responsibilities 
The scopes typically contain a broad statement of responsibilities. In these statements, 
25 States allow nurse practitioners to provide health care according to their own area of 
specialization; and in 19 States, physicians assistants may provide health care as 
approved by State Nursing Board. In addition to the broad statement, State scopes 
usually give a general list of duties allowed to be performed which most often include the 
following: treatment/care plan development; diagnosis; assessments; dispensing 
medication; counseling; referrals; and education/teaching. 
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Medicare Coverage of Non-Physician Practitioner Services  OEI-02-00-00290  Table 1: Selected Non-physician Practitioner Responsibilities 
Number of State Scopes Allowing Specific 
Responsibilities  Service 
Clinical Nurse  Nurse  Physician 
Specialist  Practitioner  Assistant 
(N=44*)  (N=50)  (N=50) 
Treatment plan development  36  37  19 
and implementation 
Diagnosis  26  35  15 
Assessment/history/exam  33  37  26 
Dispensing medication  24  20  18 
Counseling  24  31  16 
Referrals  14  26  12 
Education/teaching  28  29  15 
*44 States recognize CNSs. 
Within the list of duties, scopes offer few specific guidelines. For example, diagnosis is 
allowed by many States, but few States define what diagnosis actually means or entails. 
Also, in the States where the scope is silent, such as the 19 States that do not address 
counseling by nurse practitioners, it cannot be assumed that the practitioner cannot 
perform these services.  Even when a service is addressed, it is done in a very general 
manner.  One State defines a treatment plan as [The nurse practitioner] coordinates the 
health care plans to enhance the quality of health care and diminish both fragmentation 
and duplication of service. Another State defines education/teaching as develop 
individualized teaching plans with the client based on overt and covert health needs. 
Other examples of services allowed but not fully outlined are counseling, referrals, and 
emergency expansion of role. 
State scopes generally have a clear definition of the education requirements for non-
physician practitioners.  Although BBA97 currently requires only clinical nurse 
specialists to have a Masters degree to receive reimbursement, most States education 
requirements stipulate that both the clinical nurse specialist and the nurse practitioner 
must have a graduate degree. There appears to be a difference between Federal and State 
requirements in that 11 States do not require clinical nurse specialists to have a masters 
degree whereas Federal reimbursement requirements described in 42 CFR 410.74-76 
do. The remainder of the States do not stipulate whether a Masters degree is required. 
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Medicare Coverage of Non-Physician Practitioner Services  OEI-02-00-00290  As of January 1, 2003, nurse practitioners will also be required to have a Masters degree 
for Part B reimbursement. Physician assistants are not required to have a degree for Part 
B reimbursement. 
Every State addresses the prescriptive authority for at least one specialty. Forty-eight 
States provide guidance for the prescriptive authority of physician assistants and 41 
States do so for nurse practitioners. However, only 23 of the 44 States that recognize 
clinical nurse specialists provide any guidance for prescriptive authority in their scopes. 
See Appendix D for details of prescriptive authority. 
Some practices raise concerns 
Thirty-seven carrier medical directors cite at least one concern about non-physician 
practitioner services and/or payments. Common concerns include settings, procedures, 
and training and supervision. 
Settings. Our analysis of 1999 billing data indicates that 81 percent of all non-physician 
practitioner services were performed in three settings: offices, inpatient hospitals, and 
skilled nursing facilities/nursing facilities. Twenty-five carrier medical directors cite 
nursing facilities and skilled nursing facilities as problematic settings. Most think that 
these settings are problematic for at least one of the following reasons: medically 
unnecessary procedures performed; excessive billing; and lack of oversight. As one 
carrier medical director notes, Theres not a lot of oversight in nursing homes and there 
is a great potential for abuse where there is not much oversight. The carrier medical 
directors also discuss concerns about home health, hospitals, rural clinics, and both 
inpatient and outpatient mental health facilities, and give similar reasons for these 
concerns. 
Procedures. Nineteen carrier medical directors cite specific procedures that are 
problematic. Of these, most mention evaluation and management codes. Fifty-eight 
percent of all non-physician practitioner allowed services are for evaluation and 
management codes, and 8 of the top 10 procedures in 1999 are evaluation and 
management codes. Evaluation and management services and charges have increased by 
four times their 1997 levels. Several carrier medical directors express that it is 
problematic for non-physician practitioners to bill evaluation and management codes, 
especially those of a complex nature. Our data show that most evaluation and 
management services provided by them are of low-complexity. However, in 1999, eight 
percent of non-physician practitioner evaluation and management services were of high 
complexity. In order to merit high complexity, two of three key components (history, 
examination, or medical decision making) must meet the following criteria: the number 
of diagnoses or medical options must be extensive; the amount and/or complexity of the 
data to be reviewed must be extensive; and the risk of complications and/or morbidity or 
mortality must be high. 
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Medicare Coverage of Non-Physician Practitioner Services  OEI-02-00-00290  Within evaluation and management codes, complex consultations is one area of particular 
concern. A consultation is a type of service provided by a physician whose opinion or 
advice regarding evaluation and/or management of a specific problem is requested by 
another physician or other appropriate source. Other procedures that carriers find 
problematic due to their complexity are surgery, psychiatry, endoscopies, colonoscopies, 
and sigmoidoscopies. 
Training and Supervision.  Eleven carrier medical directors express concerns about 
non-physician practitioners lack of training. Some carrier medical directors believe that 
too many complex procedures are being performed by these practitioners. One medical 
director recalls fighting efforts to allow complex procedures performed by non-physician 
practitioners, believing that some procedures are too close to physician work and are 
more complex than their training allows. 
Five carrier medical directors note that the lack of supervision of non-physician 
practitioners could be problematic. One mentions that their background and education 
is not parallel with physicians; they were originally created as physician extenders but 
now they are operating independently. Another worries that the non-physician 
practitioners ability to practice independently could exacerbate medical problems. 
Three carrier medical directors express concerns that the practitioners and their 
collaborating physician(s) share too many responsibilities. One of these directors adds 
that he cant address his concerns because there are no guidelines for non-physician 
practitioners. 
Carrier Monitoring of Non-Physician Practitioner Claims is
Limited 
Carrier medical directors may monitor non-physician practitioner claims through pre-
payment or post-payment reviews. Pre-payment reviews are automated edits in the 
claims payment system that occur before the claim is paid, and either involve requesting 
additional documentation or denying the claim outright. When asked if any specific pre-
payment screens or edits exist for non-physician practitioners, 30 of the 41 carrier 
medical directors confirm that no edits exist specifically to monitor these claims. Some 
of the specific edits include surgery, assistant at surgery, anesthesia, nursing home 
procedures, and particular evaluation and management codes.  One carrier plans to 
implement edits that will disallow complex-level services provided by non-physician 
practitioners. This carrier is awaiting feedback from HCFA about these edits. 
All carriers but one include non-physician practitioners in their post-payment reviews. 
These are conducted manually after the claim is paid, and are triggered by such things as 
aberrant billing or outliers. One type of post-payment review is a comprehensive medical 
review, which looks at one specific providers billing over a period of time. In the last 2 
years, 11 carrier medical directors report conducting comprehensive medical reviews on 
non-physician practitioners. In one example, nurse practitioners were visiting nursing 
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11 
Medicare Coverage of Non-Physician Practitioner Services  OEI-02-00-00290  homes and changing patients bandages but billing for debridement, a surgery code which 
is both more complex and more expensive. Another carrier medical director reports 
conducting three comprehensive medical reviews. All three involved nurse practitioners, 
and resulted in overpayments totaling over $900,000. The cases involved duplicate 
billings, upcoded claims, and self-referrals. 
Several medical directors mention that monitoring is limited by the broad language in 
their scopes of practice. Because the scopes offer little detail, carrier medical directors 
may not use them.  One medical director says, Unfortunately, in [this State] it is 
impossible for [non-physician practitioners] not to be within their scope of practice. 
There is no way we can deny [the claim] based on the scope of practice. Sixteen carrier 
medical directors state that they do not verify that non-physician practitioners are 
performing services within their State scope of practice in pre-pay or post-pay activities. 
Only seven carrier medical directors check with the State nursing board or the scope of 
practice to verify services. At least 22 carriers do not check the collaborative or 
supervisory agreement. Additionally, the carriers acknowledge that they do not have 
specific settings or procedures which prompt them to refer to the agreements 
consistently. 
Carrier medical directors report receiving memoranda or other guidelines from HCFA 
regarding non-physician practitioner claims when the 1997 legislation went into effect. 
Some report receiving the BBA97 guidelines. Others report receiving information from 
the carrier manual or program memoranda, and some say they were told to treat non-
physician practitioners like medical doctors.  Six carrier medical directors report 
receiving no instructions from HCFA regarding these claims. Most carriers say they 
have not changed the way they review claims as a result of the Act. Some carriers, 
however, say they now pay more attention to non-physician practitioner claims. 
In addition to the general guidance given by HCFA, a few carriers have implemented 
their own medical review policies affecting non-physician practitioners. One example is 
a policy that offers specific instructions for the amount of supervision needed for 
myocardial perfusion imaging, a diagnostic procedure that is performed in order to 
evaluate how well blood is flowing to the heart. 
Moreover, some carrier medical directors would like to have additional pre-payment 
review or edits. Examples of the desired edits include specific evaluation and 
management codes, incident to services, and setting-specific edits. Some carrier medical 
directors would also like to have additional post-payment reviews, including level-
specific reviews, specialty-specific reviews, psychiatric service reviews, and spot checks 
of collaborative agreements. Other medical directors suggest modifying State laws or 
having further clarification of non-physician practitioner duties as a means of improving 
the way these claims are reviewed. 
Some carrier medical directors state that although they want to monitor more closely, 
they are limited in their ability to do so. Five carrier medical directors mention the need 
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12 
Medicare Coverage of Non-Physician Practitioner Services  OEI-02-00-00290  for national guidelines on how to use the scopes to review claims. One carrier explains, 
Wed like some instructions- to have a list from HCFA on codes that are inappropriate. 
Another carrier medical director comments that the carrier is hindered: [We] cant 
develop every claim[we] have no way of monitoring if they overstep their 
boundsour hands are tied. 
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13 
Medicare Coverage of Non-Physician Practitioner Services  OEI-02-00-00290  We are able to draw several conclusions based on our analysis. We can conclude that the 
C O N C L U S I O N
The Balanced Budget Act successfully opened up Medicare billing for non-physician 
practitioners, regardless of care settings. Non-physician practitioner billings are rising 
rapidly, but controls, which are based on scopes of practice, are limited. State scopes of 
practice are vague and broad. As such, carriers do not have sufficient guidance to 
distinguish which non-physician practitioner services should be reimbursed by the 
program and which should not. This creates potential vulnerabilities, both from payment 
and quality of care standpoints. Therefore it may be appropriate to consider other 
additional controls for Medicare payments to non-physician practitioners. Until such 
controls are developed, the situation deserves careful monitoring. We plan to do so for 
both overall trends and for complex services. 
Agency Comments 
We received comments on the draft report from the Health Care Financing 
Administration. They concur with our conclusion regarding vulnerabilities when non-
physician practitioners bill Medicare. They are, however, sensitive to increasing the 
monitoring burden on contractors. The HCFA expressed a willingness to work with the 
OIG to monitor vulnerabilities in non-physician practitioner billings. We plan to do 
additional work to identify specific vulnerabilities by examining the billing practices of 
non-physician practitioners. 
The full text of HCFAs comments are contained in Appendix F. 
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14 
Medicare Coverage of Non-Physician Practitioner Services  OEI-02-00-00290  APPENDIX A 
Services and Costs 1999, by Category 
Nurse Practitioner  Clinical Nurse  Physician Assistant  All Non-Physician 
Specialist  Practitioners 
Services  Charges  Services  Charges  Services  Charges  Services  Charges 
Anesthesia  137  $14,397  3  $151  159  $21,963  299  $36,511 
Integumentary  50049  $1,623,825  7093  $262,846  62408  $2,683,342  119550  $4,570,013 
Musculoskeletal  10905  $732,838  706  $88,378  92646  $12,734,886  104257  $13,556,102 
Respiratory  595  $53,750  19  $2,941  7169  $844,971  7783  $901,662 
Cardiovascular  3455  $430,214  272  $49,364  123066  $21,424,366  126793  $21,903,944 
Lymphatic  14  $1,176  19  $2,088  586  $37,393  619  $40,657 
Mediastinum  27  $4,328  0  $0  364  $39,925  391  $44,253 
Digestive System  1655  $151,939  319  $32,412  11497  $1,050,466  13471  $1,234,817 
Urinary  6274  $365,168  226  $14,399  2256  $163,322  8756  $542,889 
Male Genital  69  $9,033  2  $391  667  $110,433  738  $119,857 
Laparoscopy (Elim)  435  $62,401  81  $8,206  4179  $393,070  4695  $463,677 
Female Genital  2358  $126,500  149  $6,328  1497  $120,566  4004  $253,394 
Maternity  62  $7,503  0  $0  9  $3,170  71  $10,673 
Endocrine/ Nerves  2349  $209,462  233  $28,343  23473  $2,426,799  26055  $2,664,604 
Eye  73  $4,116  0  $0  693  $91,044  766  $95,160 
Ear  11229  $325,073  47  $1,428  8369  $246,676  19645  $573,177 
Radiology  36872  $1,174,244  583  $31,287  48730  $1,245,475  86185  $2,451,006 
Pathology/ Lab  249021  $1,935,797  2002  $12,602  136528  $1,118,289  387551  $3,066,688 
Medicine  361401  $9,906,512  103358  $6,115,443  121261  $2,455,480  586020  $18,477,435 
Evaluation & Mgmt 1855424 $73,999,925  67433  $3,622,695 1103259  $46,597,602  3026116 $124,220,222 
Temp  437430  $4,210,872  5302  $74,871  228974  $2,635,335  671706  $6,921,078 
Total  3029834 $95,349,073  187847 $10,354,173 1977790  $96,444,573  5195471 $202,147,819 
These categories are in order of their Current Procedural Terminology (CPT) number 
Source: Medicare BESS data 
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15 
Medicare Coverage of Non-Physician Practitioner Services  OEI-02-00-00290  APPENDIX B 
Most Frequent Settings and Services, 1999 
1. Most Frequent Settings, 1999 
Health Care Setting  Number of 
Services 
Office  2,598,999 
Skilled Nursing Facility (SNF)  757,564 
Nursing Facility (NF)  433,169 
Inpatient Hospital  414,285 
Other - unlisted facility  316,571 
ER - hospital  241,995 
Outpatient Hospital  199,994 
Home  85,837 
Custodial Care  49,616 
Community Mental Health  35,234 
Center 
Proportion of all Services  98.8% 
Source: Medicare BESS Data, 1999 
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16 
Medicare Coverage of Non-Physician Practitioner Services  OEI-02-00-00290  APPENDIX B 
(cont.) 
2. Most Frequent Services, 1999 
CPT  Service Description  Number  Percent 
Code  of  of total 
Services 
99213  Office or outpatient visit for the evaluation and management of an  645,979  12.4% 
established patient which requires at least two of these components: 
C  an expanded problem focused history; 
C  an expanded problem focused examination; 
C  medical decision making of low complexity. 
The presenting problem(s) are of low to moderate severity. Physicians 
typically spend 15 minutes face-to-face with the patient and/or family 
99312  Subsequent nursing facility care, per day, for the evaluation and  508,954  9.8% 
management of the new or established patient, which requires at least two 
of these components: 
C  an expanded problem focused interval history; 
C  an expanded problem focused examination; 
C  medical decision making of moderate complexity. 
Usually, the patient is stable, recovering or improving. Physicians typically 
spend 25 minutes as the bedside and on the patients facility floor or unit. 
99311  Subsequent nursing facility care, per day, for the evaluation and  420,926  8.1% 
management of the new or established patient, which requires at least two 
of these components: 
C  a problem focused interval history; 
C  a problem focused examination; 
C  medical decision making that is straightforward or of low 
complexity. 
Usually, the patient is stable, recovering or improving. Physicians typically 
spend 15 minutes as the bedside and on the patients facility floor or unit. 
99212  Office or outpatient visit for the evaluation and management of an  353,654  6.8% 
established patient which requires at least two of these components: 
C  a problem focused history; 
C  a problem focused examination; 
C  straightforward medical decision making 
The presenting problem(s) are of low to moderate severity. Physicians 
typically spend 15 minutes face-to-face with the patient and/or family 
G0001  Routine venipuncture for collection of specimen(s).  206,094  4.0% 
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17 
Medicare Coverage of Non-Physician Practitioner Services  OEI-02-00-00290  CPT  Service Description  Number  Percent 
Code  of  of total 
Services 
99214  Office or outpatient visit for the evaluation and management of an  148,671  2.9% 
established patient which requires at least two of these components: 
C  a detailed history; 
C  a detailed examination; 
C  medical decision making of moderate complexity. 
The presenting problem(s) are of low to moderate severity. Physicians 
typically spend 15 minutes face-to-face with the patient and/or family 
99313  Subsequent nursing facility care, per day, for the evaluation and  100,231  2.0% 
management of the new or established patient, which requires at least two 
of these components: 
C  a detailed interval history; 
C  a detailed examination; 
C  medical decision making of moderate to high complexity. 
Usually, the patient is stable, recovering or improving. Physicians typically 
spend 35 minutes as the bedside and on the patients facility floor or unit. 
99283  Emergency department visit for the evaluation and management of a  98,636  1.9% 
patient, which requires these components: 
C  an expanded problem focused history; 
C  an expanded problem focused examination; and 
C  medical decision making of moderate complexity. 
Usually, the presenting problem(s) are of moderate severity. 
90862  Pharmacologic management, including prescription, use, and review of  94,969  1.8% 
medication with no more than minimal medical psychotherapy. 
99231  Subsequent hospital care, per day, for the evaluation and management  79,738  1.5% 
of a patient, which requires at least three of the following components: 
C  a problem focused interval history; 
C  a problem focused examination; 
C  medical decision making that is straightforward or of low 
complexity. 
Usually, the patient is stable, recovering or improving. Physicians typically 
spend 15 minutes at the bedside and on the patients hospital floor or unit. 
Total  2,657,852  51.2% 
Source: Current Procedural Technology 1999, Standard Edition and Medicares National Level II Codes--
HCPCS 1997, American Medical Association 
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18 
Medicare Coverage of Non-Physician Practitioner Services  OEI-02-00-00290  APPENDIX C
States Recognition of  Non-Physician Practitioners 
State  NP  CNS  PA  State  NP  CNS  PA 
AL  T  T  T  MT  T  T  T 
AK  N, T  V  T  NE  T  T  T 
AZ  T  T  T  NV  T  T  T 
AR  T  T  T  NH  T  V  T 
CA  T  T  T  NJ  T  T  T 
CO  T  T  T  NM  T  T  T 
CT  T  T  T  NY  T  MH  T 
DE  T  T  T  NC  T  T  T 
DC  NR  NR  T  ND  T  T  T 
FL  T  V  T  OH  T  T  T 
GA  T  MH  T  OK  T  T  T 
HA  T  T  T  OR  T  D  T 
ID  T  T  T  PA  T  T  T 
IL  T  T  T  RI  T  MH  T 
IN  T  T  T  SC  N, T  N, T  T 
IA  T  T  T  SD  T  T  T 
KS  T  T  T  TN  i  i  T 
KY  N, T  N, T  T  TX  T  T  T 
LA  T  T  T  UT  N, T  N, T  T 
ME  T  T  T  VT  T  MH , N  T 
MD  T  T  T  VA  T  T  T 
MA  T  V  T  WA  T  V  T 
MI  N, T  V  T  WV  T  T  T 
MN  T  T  T  WI  T  T  T 
MS  T  T  V  WY  T  T  T 
MO  N, T  N, T  T 
T- Recognized to practice in State

NR- Not Recognized

MH- Mental health clinical nurse specialists only.

i - Not board certified. Recognizes only RNs. However, NP may obtain a certificate of fitness to prescribe drugs. 

N- Defers to national certifying body.

D - Drafting Scope

V - Non-respondent 

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19 
Medicare Coverage of Non-Physician Practitioner Services  OEI-02-00-00290  APPENDIX D 
Prescriptive Authority 
Number of States allowing service 
Prescriptive Authority  Clinical Nurse  Nurse  Physicia 
Specialist  Practition  n 
(N = 44)  er  Assistan 
(N = 50)  t 
(N = 50) 
Medical devices  4  11  16 
Legend drugs  9  18  17 
Starter dosages/samples  12  19  15 
Schedule I *  0  2  2 
Schedule II*  5  14  14 
Schedule III*  8  20  26 
Schedule IV*  9  20  26 
Schedule V*  8  20  26 
* Controlled substances 
Source: State Scopes of Practice 
The prescriptive authority usually contains specific information about dispensing 
samples, prescribing prescriptive or legend drugs (the legend of the prescription 
must contain the dosage amount and the frequency with which to take the drug), 
controlled substances (any narcotic or barbiturate drug ranging from simple cough 
medicine to heroin), and medical devices. 
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Medicare Coverage of Non-Physician Practitioner Services  OEI-02-00-00290  APPENDIX E 
Review Criteria for State Scope of Practice 
In reviewing the State scopes of practice, our review instrument focused on the 
following responsibilities: 
C	 Assessments, histories, and physical exams, including screening and 
interpretation of lab data; 
C	 Therapy, including physical, occupational, and respiratory, as well as 
therapeutic diets and therapeutic interventions; we did not review drug 
therapy; 
C  Treatment plan/ care plan development, including formulating, 
implementing, reviewing, and evaluating plans; 
C  Patient care and management, including hospital rounds, accessing 
catheters and tubes, and care of sprains and fractures; 
C  Surgery, including first assistant, minor surgery and suturing; 
C  Supervision; 
C  Education and teaching; 
C  Counseling; 
C  Emergency services, including EMT; 
C  Expansion of scope in the event of an emergency; 
C  Collaboration with Physician/ Supervision of non-physician 
practitioner, and; 
C  Other relevant services such as anesthesia, diagnostic problems, and 
subspecialization in fields like optometry or obstetrics. 
21
 APPENDIX F 
Agency Comments 
22