Department of Health and Human Services
 
OFFICE OF 

 
INSPECTOR GENERAL 

 
 
 
 
 
 
   
 
P Q
REVALEN  CE AND  UALIFICATIONS 

 
N  
OF  ONPHYSICIANS 

 
 
W P  
HO  ERFORMED 

 
M   P S  
EDICARE  HYSICIAN  ERVICES 

 
 
 
 
Daniel R. Levinson 
  
Inspector General 

 
August 2009 
 
OEI-09-06-00430 
    
 
 
Office of Inspector General

http://oig.hhs.gov  
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as  
amended, is  to protect the integrity of the Department of  Health and Human Services  
(HHS)  programs, as well as the health and welfare of beneficiaries  served by those 
programs.  This statutory mission  is  carried  out through  a nationwide network  of  audits, 
investigations, and inspections conducted by the  following operating components:  
Office of Audit Services 
The Office  of  Audit Services  (OAS) provides auditing services  for HHS, either by  conducting  
audits  with its own audit resources or by  overseeing  audit work done by others.  Audits  
examine the performance of HHS programs and/or its grantees and contractors in carrying  
out their respective responsibilities and are intended  to provide independent assessments of 
HHS programs and operations.  These assessments help reduce waste, abuse, and  
mismanagement and promote economy and efficiency  throughout  HHS. 
Office of Evaluation and Inspections  
The Office  of  Evaluation and Inspections (OEI)  conducts national evaluations to  provide 
HHS, Congress, and the public with timely, useful, and reliable information on significant 
issues.  These evaluations focus on preventing fraud,  waste, or abuse  and promoting  
economy, efficiency, and effectiveness of departmental programs.  To promote impact, OEI 
reports also present practical recommendations for improving  program operations.  
Office of Investigations 
The Office of Investigations (OI) conducts criminal, civil, and administrative investigations  
of  fraud and misconduct  related to HHS programs, operations, and beneficiaries.  With 
investigators working in all 50 States and the District of Columbia, OI  utilizes its resources 
by actively  coordinating with the Department  of Justice  and other Federal, State, and local 
law enforcement authorities.  The investigative efforts of OI often lead to  criminal 
convictions, administrative sanctions,  and/or  civil monetary  penalties.  
Office of Counsel to the Inspector General 
The Office of Counsel to the  Inspector  General (OCIG) provides general legal services to 
OIG, rendering  advice and opinions on HHS programs and operations and  providing all  
legal support for OIGs  internal operations.  OCIG represents  OIG in all civil and 
administrative fraud and abuse cases involving HHS programs,  including False Claims Act, 
program exclusion, and civil monetary penalty cases.  In  connection with these cases, OCIG 
also negotiates and monitors corporate integrity agreements.  OCIG renders advisory 
opinions, issues compliance program  guidance, publishes fraud alerts, and provides other  
guidance  to  the health care industry concerning the anti-kickback statute and other  OIG  
enforcement authorities.     
 
 
  E X E C U T I V E   S U M M A R Y
OBJECTIVES 
 
For days that Medicare allows more than 24 hours of services billed by 
a single physician: 
1.  Identify the services physicians bill to Medicare but do not perform 
personally. 
2.  Assess the qualifications of nonphysicians who perform these 
services. 
BACKGROUND 
Medicare Part B pays for services that are billed by physicians but are 
performed by nonphysicians.  These  services often are called  incident 
to services, or services provided under the incident to rule.  Incident 
to services may be vulnerable to overutilization and may put 
beneficiaries at risk of receiving services that do not meet professionally 
recognized standards of care.  Little is known about Medicare services  
performed incident to the professional services of a physician.   
Using Part B Medicare National Claims History data for the first 
quarter of 2007, we identified all days during which Medicare allowed 
services for physicians in a single day that exceeded 24 hours of 
physician worktime. We randomly selected 250 of these physician-day  
combinations and requested that the physicians identify who performed  
each service that Medicare allowed on the selected day(s).  We asked the 
physicians to submit all relevant credentials for the nonphysicians they 
identified.  Our contractors nurse-reviewers determined whether the 
nonphysicians were qualified to render the particular services. In 
making these determinations, the nurse-reviewers considered any 
relevant Medicare requirements, State laws and regulations, and the 
nurses own  professional judgment as to whether the particular service 
generally falls within the standard competencies of the particular type  
of nonphysician provider who rendered the service. 
FINDINGS 
When  Medicare allowed physicians more than 24 hours of services 
in a day, half of the services were not performed personally  by  a 
physician.  In the first quarter of 2007, physicians who were allowed 
services that exceeded 24 hours of physician worktime in a day 
personally performed approximately half of these services.   
Nonphysicians performed the remaining services, which physicians may   
E X E C U T I V E   S U M M A R Y   
have billed as incident to services.  Medicare allowed $105 million for 
approximately 934,000 services that the physicians personally 
performed and approximately $85 million for approximately  
990,000 services that nonphysicians personally performed during this 
3-month period. 
Nonphysicians performed almost two-thirds of the invasive services that  
Medicare allowed the physicians.  An invasive procedure involves entry  
into the living body (as by incision or by insertion of an instrument).  
Nonphysicians performed almost half of the noninvasive services that 
Medicare allowed the physicians. 
Unqualified nonphysicians performed 21 percent of the  services 
that physicians did not perform personally.   In the first 3 months of  
2007, Medicare allowed $12.6 million for approximately  
210,000 services performed by unqualified nonphysicians.  These 
nonphysicians did not possess the necessary licenses or certifications, 
had no verifiable credentials, or lacked the training to perform the  
service.  Nonphysicians with inappropriate qualifications performed  
7 percent of the invasive services that physicians did not perform.  
RECOMMENDATIONS 
Services performed by unqualified nonphysicians represent a risk to 
Medicare beneficiaries.   State laws that require training, certification, 
and licensure of nonphysicians help to ensure that patients receive safe 
and quality care.  However, among the physicians who billed Medicare 
for more than 24 hours of services in a day, nonphysicians performed 
half of the services billed, and unqualified nonphysicians performed one 
in every five services not performed by a physician.  These 
nonphysicians were not practicing pursuant to State laws, State 
regulations, or Medicare regulations;  had no verifiable credentials; 
and/or had  not received the appropriate training to perform the services 
(according to our reviewers professional judgment).   
We are concerned about  the potential scale of this problem.   We cannot 
report the extent to which all physicians who bill Medicare bill for 
services performed by unqualified nonphysicians because our sample 
included only those physicians who billed for more than 24 hours of 
services in a day.  The sample was a proxy for physicians who billed 
incident to. Medicare claims data do not identify incident to services  
as such.  However, we have no reason to believe  that the issues 
identified in this review are unique to these physicians.  For  example, 
  OEI-09-06-00430   NONPHYSICIANS  WHO  PERFORMED  MEDICARE  PHYSICIAN  SERVICES   iii   
E X E C U T I V E   S U M M A R Y   
physicians who bill Medicare for fewer than 24 hours of services in a  
day might also bill for incident to services performed by unqualified 
nonphysicians. Although our sample represents relatively few 
physicians (3,165 of the 805,401 physicians who billed Medicare in the 
first 3 months of 2007), the potential exists that this problem is more 
widespread than we can report at this time. 
Therefore, we recommend that the Centers for Medicare & Medicaid 
Services (CMS):   
1.  	 Seek revisions to  the incident  to rule.  The rule  should require 
that physicians who  do not personally perform the services  they  
bill to Medicare ensure  that no persons except: 
a.  	 licensed physicians personally  perform the services or   
b.  	 nonphysicians who have the  necessary training, 
certification, and/or  licensure, pursuant to State laws, 
State  regulations, and Medicare regulations personally  
perform the services under the direct supervision of a 
licensed physician. 
2.  	 Require physicians who bill services  to Medicare that they do not 
personally perform to identify the  services  on their Medicare 
claims by  using a service code modifier.  The modifier  would allow 
CMS to monitor claims to ensure that physicians are billing for 
services performed by nonphysicians with appropriate  
qualifications.  
3.  	 Take appropriate action to address the claims  for services  that we  
detected that: 
a.  	 were billed by physicians and performed by nonphysicians 
that were, by definition,  not  incident to services and 
b.  	 were for rehabilitation therapy services performed by 
nonphysicians who did not have the training of a therapist.    
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL  
RESPONSE 
CMS concurred with two of our three recommendations.  CMS did not 
concur  with our recommendation to create a service code modifier to 
identify physicians claims for services that physicians do not personally 
perform.  CMS stated that incidental services  are often shared by 
physicians and staff, making definition of a service not personally 
  OEI-09-06-00430   NONPHYSICIANS  WHO  PERFORMED  MEDICARE  PHYSICIAN  SERVICES   iv   
E X E C U T I V E   S U M M A R Y   
performed operationally difficult. However, CMS stated it agrees with 
our underlying objective of increasing the available data on services 
provided incident to.   
We continue to believe that CMS should have the ability to identify and 
monitor physicians claims for services that physicians bill, but do not 
personally perform.  This review identified unqualified nonphysicians 
who furnished services to Medicare beneficiaries.  We believe that the 
lack of a service code  modifier to identify physicians incident to claims  
represents a significant vulnerability to the Medicare program. CMS 
stated it would study the operational issues involved in implementing 
the recommendation.  We look forward to learning the specific steps 
CMS plans to take with respect to this issue. 
CMS provided technical comments in addition to its response to our 
recommendations.  If appropriate, we incorporated the technical 
comments into the final report.   
  OEI-09-06-00430   NONPHYSICIANS  WHO  PERFORMED  MEDICARE  PHYSICIAN  SERVICES   v   
  T A B L E   O F   C O N T E N T S  
 
EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i
  
 
 
I N T RO DUC T IO N  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1 
  
 
 
F I N D IN G S  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8 
  
When Medicare allowed physicians more than 24 hours  

of services in a day, half of the services were not 
 
performed personally by a physician . . . . . . . . . . . . . . . . . . . . . . . .  8 
  
Unqualified nonphysicians performed 21 percent

of the services that physicians did not perform personally. . . . . .  12 
  
   
R E C O MMEN D A T ION S  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18 
  
Agency Comments and Office of Inspector General Response . . .  19 

 
 
APPENDIXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20 
  
  A:	  Detailed Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20 
  
  B:	  Confidence Intervals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   26 
  
  C:	  Selected Features of the Sampled Physician-Days . . . . . . . .  27 

         D:	  Categories of Services That Medicare Allowed  

               by Physicians/Nonphysicians . . . . . . . . . . . . . . . . . . . . . . . . . .  29 

        E:	  Services Performed by Nonphysicians by Service Category 

               and Nonphysician Qualifications . . . . . . . . . . . . . . . . . . . . . . .  30 
  
         F:  Agency Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  31 
  
 
 
A C K NO WL E D G M E N T S  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33 
  
  OEI-09-06-00430   NONPHYSICIANS  WHO  PERFORMED  MEDICARE  PHYSICIAN  SERVICES   vi   
  I N T R O D U C T I O N  
OBJECTIVES 
For days that Medicare allows more than 24 hours of services billed by 
a single physician: 
1.  Identify the services physicians bill to Medicare but do not perform 
personally. 
2.  Assess the qualifications of nonphysicians who perform these 
services. 
BACKGROUND 
Incident to Services 
Medicare Part B pays for services that are billed by physicians but are 
performed by nonphysician practitioners (hereinafter referred to as 
nonphysicians).  These services often are called incident to services, 
or services provided under the incident to rule.  Section 1861(s)(2)(A)  
of the Social Security Act (the Act) defines Medicare coverage of services 
and supplies performed incident to the professional services of a 
physician.1  2   
Incident to services typically are performed by nonphysicians in a 
physicians office (whether it is located in a separate office suite or 
institution).  The Act defines these services as . . . services and supplies 
(including drugs and biologicals which are not usually self-administered  
by the patient) furnished as incident to a physicians professional 
service, of kinds which are commonly furnished in physicians offices  
and are commonly either rendered without charge or included in the 
physicians bills. Section 1861(s)(2) of the Act does not permit services 
and supplies listed in their own benefit categories (except outpatient 
rehabilitation therapy) to be billed incident to.3    
The incident to rule allows physicians to bill for services performed by 
any personnel (licensed  or unlicensed).  Examples of nonphysicians 
include physician assistants, nurses, medical technicians, and medical 
 
1 42 U.S.C.  1395x(s)(2)(A). 

2 In this context, physicians include medical doctors, doctors of osteopathy, doctors of 
 
dental surgery, podiatrists, optometrists, and chiropractors.  The Act,  1861(r),   
42 U.S.C  1395x(r). 
3 42 U.S.C.  1395x(s)(2)(A). 
  OEI-09-06-00430   NONPHYSICIANS  WHO  PERFORMED  MEDICARE  PHYSICIAN  SERVICES   1   
I N T R O D U C T I O N   
assistants.4   The implementing regulations allow physicians 
reimbursement for services at the full physician fee schedule amount for 
services provided by their staff if the services are: 
 	  furnished to beneficiaries who are not inpatients of a hospital or 
skilled nursing facility; 
 	  commonly furnished in a physicians office and are an integral, 
although incidental, part of the service of a physician or other 
practitioner in the course of diagnosis or treatment of an injury or  
illness; 
 	  included in a treatment  plan for an injury or illness, where the 
physician personally performs the  initial service and is involved 
actively in the course  of treatment;   
 	  commonly furnished without charge or included in the bill of a 
physician (or other practitioner); and  
 	  furnished under the direct supervision5 of a physician  
(42 CFR  410.26(b)).  
Incident to services must meet Medicares general criteria for medical 
necessity, documentation, and quality of care.  Section 1862(a)(1)(A)  of 
the Act states that no payment may be made for services that are not 
reasonable and necessary for the diagnosis or treatment of illness or 
injury or to improve the functioning of a malformed body member.6   
Section 1833(e) of the Act requires that providers furnish such 
information as may be necessary . . . to determine the amounts due to 
receive Medicare payment.7    
Medicare does not require identifiers on claims indicating that the 
service was furnished incident to.  Therefore, based on claims data 
analysis, it is not possible to determine the extent to which physicians 
are billing their services under incident to.  In 1996, Medicare began a 
2-year demonstration project in five States (Illinois, Maryland, 
 
4 Some nonphysicians, such  as physician assistants, are permitted to be paid  
independently for services provided to patients at a lower rate than a physician.  These are 
not incident to types of services. 
5 Direct supervision in the office setting means that the physician must be present in the 
office suite and immediately available to furnish  assistance and direction throughout the  
performance of the procedure.  It does not mean that the physician must be present in the 
room when the procedure is performed (42 CFR  410.32(b)(3)(ii)). 
6 42 U.S.C.  1395y(1)(A). 
7 42 U.S.C.  1935l(e). 
  OEI-09-06-00430   NONPHYSICIANS  WHO  PERFORMED  MEDICARE  PHYSICIAN  SERVICES   2   
I N T R O D U C T I O N   
Michigan, Pennsylvania, and Texas) to identify incident to claims by 
adding a YR modifier.  Provider participation was voluntary, and the 
Centers for Medicare &  Medicaid Services (CMS) did not implement the 
modifier nationwide. However, claims data from 1998 indicate that a 
minimum of $75 million was allowed for incident to services in the five 
States. In 2006, Medicare allowed $58.4 billion8  for physician fee 
schedule services under Part B.  It is uncertain how much of this 
amount was for incident to services.  
Previous Work 
The Office of Inspector General (OIG) has not conducted specific 
reviews of incident to services. From 2002 to 2006, OIG issued a 
series of reports on cardiac rehabilitation services, which addressed 
physician supervision requirements when the services were furnished 
as incident to.  In 2006, OIG issued a memorandum report to CMS 
that summarized OIGs medical review of Medicare claims for 
physical therapy billed by physicians.9  We found that Medicare 
should not have paid for approximately 90 percent of the services we  
reviewed.  In addition, our reviewers could not determine the skill 
levels for most of the staff who rendered the services that physicians 
had billed because of poor medical record documentation.  However, 
20 of the 32 physicians10  we interviewed reported that someone other 
than themselves performed the services they billed. 
Scope 
This review is limited to identifying services that physicians11 bill to 
Medicare but do not perform personally and assessing the  
appropriateness of the qualifications of nonphysicians who perform 
them.  The physicians in our sample identified  the nonphysicians who 
personally performed the services and supplied the nonphysicians 
credentials.  We determined whether the nonphysicians had all the 
training, certifications, and licenses required by State laws, State 
regulations,  and/or Medicare regulations.  We did not review patients 
 
8 2007 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and 
Federal Supplementary Medical Insurance Trust Funds, Boards of Trustees of the Federal 
Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds,  
April 23, 2007. 
9 Physical Therapy Billed by Physicians, OEI-09-02-00200, May 2006. 

10 We interviewed 32 of the 54 physicians in our sample. 

11 Our sample population is limited to physicians for whom Medicare allowed more  than 

24 hours of services in a day.  Medicare does not limit the services that physicians can bill 
to Medicare in a single day based  on the total time of the services. 
  OEI-09-06-00430   NONPHYSICIANS  WHO  PERFORMED  MEDICARE  PHYSICIAN  SERVICES   3   
II NN TT RR OO DD UU CC TT II OO NN    
medical records. Therefore, we did not assess the medical necessity of 
the services  or the completeness of the medical record documentation. 
METHODOLOGY 
Using Part B Medicare National Claims History (NCH) data for the first 
quarter of 2007, we identified all days during which Medicare allowed 
services for physicians12 in a single day that exceeded 24 hours of 
physician worktime. We randomly selected 250 of these physician-day  
combinations and requested that the physicians identify who performed  
each service that Medicare allowed on the selected day(s). We asked the 
physicians to submit all relevant credentials for the nonphysicians 
whom they identified. Our contractors nurse-reviewers determined  
whether the nonphysicians had all the training, certifications, and 
licenses required by State laws, State regulations, and/or Medicare 
regulations to perform the services billed. The following is a summary 
of our methodology. For additional details, see Appendix A.  
Sample 
Sample definition. From  NCH data for services rendered January 
through March 2007, we created a population of physician-days. We 
defined a physician-day as a single day (24 hours), per physician, 
wherein Medicare allowed services that apparently exceeded 24 hours  
of physician worktime. In the first quarter of 2007, Medicare allowed 
claims for services from 3,165 physicians for a total of 18,403  
physician-days. Medicare allowed $204,415,178 for these physicians 
claims. We  selected our  sample from this population.   
Final sample. Our sample of 250 physician-days included 
30,822 line-item claims for services that Medicare allowed for 
221 physicians. Because our sample-unit was the unique combination 
of physician and day, some physicians had more than 1 day of services  
in our sample. Four of the two-hundred twenty-one physicians in our 
sample were part of an active OIG investigation, so we removed them 
from the final sample. Fifteen physicians did not respond to  our 
request for information  prior to the deadline. We removed them from  
the sample, and they are not included in our analyses.13   Therefore, our  
 
12 We excluded claims from  doctors of dental surgery, podiatrists, optometrists, and  
chiropractors. 
13 Our review of these physicians reasons for not complying with  our request for 
information is ongoing. We will take appropriate action that may include referring the 
physicians to CMS or to OIGs Office of Investigations. 
OEI-09-06-00430   NONPHYSICIANS  WHO  PERFORMED  MEDICARE  PHYSICIAN  SERVICES   4   
I N T R O D U C T I O N   
final review sample consisted of 27,379 line-item claims allowed by 
Medicare for 202 physicians on 228 physician-days.    
Review Protocol 
Data collection.  We requested that each sampled physician logon to our 
secure Web site and list who personally furnished each of the services  
that Medicare allowed on the sampled day(s).  We asked the physicians 
to list all relevant licenses, certifications, and training (relevant to the 
service performed by the nonphysician) for each nonphysician they 
reported personally having performed the sampled services.  
We  requested that the physicians mail to us documentation to support 
the information that they provided on the Web site.  Our Web site 
allowed the  physicians to print and sign attestation forms that we 
required the physicians to sign, attesting to the accuracy and 
completeness of the information that they provided on the Web site.  We  
requested copies of all licenses, certifications, diplomas, and proof of 
training for each nonphysician, physicians schedules of patient 
appointments, and nonphysician hours for the sampled day(s).   
Nonphysician-appropriateness determinations.  We provided the 
information submitted by the physicians to our contractor. Registered 
nurses served as the reviewers and determined whether the  
qualifications of the nonphysicians who performed the sampled services  
were appropriate vis-a-vis the services that the nonphysicians 
performed.   
Nonphysicians in 29 States performed Medicare services for  the 
physicians in our sample.  The nonphysicians included technicians, 
nurses, licensed or certified assistants, and therapists.  In addition, 
some nonphysicians in our sample were not licensed or certified but 
instead had received other formal medical training, on-the-job training, 
or no formal medical training at all.  
  OEI-09-06-00430   NONPHYSICIANS  WHO  PERFORMED  MEDICARE  PHYSICIAN  SERVICES   5   
I N T R O D U C T I O N   
In addition to Medicare regulation,14 the reviewers based their decisions  
on State laws and regulations.  For each State, the reviewers researched  
the State laws and regulations applicable to each nonphysician in our  
sample who performed services in that State.  For the services 
performed by nonphysicians that are not addressed by State laws and 
regulations,  the reviewers researched the training that the 
nonphysicians received and used their professional judgment to 
determine whether the training addressed the nonphysicians 
competency to perform the service.   
The reviewers deemed a nonphysicians qualifications appropriate if the 
nonphysician who performed the services had all training, certifications, 
and licenses required by State laws, State regulations, and/or Medicare 
regulations.  The reviewers deemed  the nonphysicians qualifications 
inappropriate if: 
 	  the nonphysician performed the service without the licenses,  
certifications, or training required by Medicare regulation;15   
 	  the nonphysician performed the service outside of his or her  
professions  scope of practice as defined by State laws and/or  
regulations and the nonphysician lacked additional training 
conferring competency to perform the service; and/or 
 	  the physician did not provide adequate documentation to  confirm  
that the nonphysicians credentials were valid. 
Adverse actions.  We determined whether the physicians in our sample 
and the nonphysicians who personally furnished the sampled services 
had been reprimanded (e.g., suspended license, revoked license, or  
official reprimand) from a State licensing agency and/or had been 
excluded from Federal health care programs.  No physicians or  
nonphysicians in our sample had active adverse actions that would have 
precluded them from providing the services we reviewed.  No physicians 
 
14 The incident to rule allows physicians to bill for services performed by any personnel 
(licensed or unlicensed).  However, when a physician bills rehabilitation therapy services as 
incident to, Medicare requires that the service and the person  who furnishes the service 
must meet the standards and conditions that apply to physical therapy and physical 
therapists, except that a license to practice physical therapy  in the State is not required  
(42 CFR  410.60(a)(3)(iii)).  In addition, the incident to rule requires physicians (or other 
authorized  practitioners) to personally perform the initial services.  Initial services billed by  
physicians (or other authorized  practitioners) but performed by nonphysicians are not 
incident to services (42 CFR  410.26(b)).  
15 42 CFR  410.60(a)(3)(iii), 410.26(b)).  
  OEI-09-06-00430   NONPHYSICIANS  WHO  PERFORMED  MEDICARE  PHYSICIAN  SERVICES   6   
I N T R O D U C T I O N   
or nonphysicians in our sample were excluded from Federal health care 
programs on the dates of service we reviewed. 
Patient and nonphysician schedules.   We requested that the physicians 
submit their patient and nonphysician-staff schedules on the sampled 
date(s) of service.   We reviewed these schedules to determine how many 
patients and staff the physicians had scheduled on the dates of service. 
Analysis.  We stored the information that we gathered from  our secure 
Web site in a database.  The reviewers input their review decisions into 
the same database. Using SAS software, we converted the database 
into SAS-format datasets, reviewed the data for completeness and logic, 
and analyzed the data.  We used SUDAAN software to produce 
confidence intervals for  the projectable statistics.       
Projectable statistics.  All statistics in the findings section of this report  
are projections to the total population of physician-days in the first  
3 months of 2007.  (See Appendix B for the confidence intervals for 
selected statistics.)  Appendix C describes features of the sample that 
we did not project to the  population and, therefore, these features 
should not be extrapolated to any population other than the  
202 physicians and 27,379 line-item claims for the sampled services.   
Limitations.   Our findings are limited to the physician population for 
whom Medicare allowed services on physician-days in the first quarter 
of 2007. The findings in this report  should not be projected to all 
physicians for whom Medicare allows services.   Nor should our findings  
be projected  to all nonphysicians who perform services under the 
auspices of physicians for whom Medicare allowed claims.     
Standards 
This study was conducted in accordance with the Quality Standards for 
Inspections issued by the Presidents Council on Integrity and 
Efficiency and Executive Council on Integrity and Efficiency (now 
Council of the Inspectors General on Integrity and Efficiency). 
  OEI-09-06-00430   NONPHYSICIANS  WHO  PERFORMED  MEDICARE  PHYSICIAN  SERVICES   7   
  F I N D I N G S  
When Medicare allowed physicians more than   In the first 3 months of 2007, 
24 hours of services in a day, half of the services  physicians for whom Medicare 
allowed services that exceeded   
were not performed personally by a physician 
24 hours of physician worktime in a 
day personally performed approximately half of these services   
(49 percent).  Nonphysicians performed the remaining services  
(51 percent), which may  have been incident to services, if the services  
met the requirements of section 1861(s)(2)(A) of the Act.  Medicare 
allowed approximately $105 million for approximately 934,000 services 
that the physicians personally performed and approximately $85 million 
for approximately 990,000 services that the nonphysicians performed 
during these months. See Chart 1. 
 
CHART 1   
 Who Performed  Physicians Claims  for Services  
the Services 
Medicare  Allowed in the First Quarter of 2007 
When Medicare 
$120 
Allowed 
934,000  
Physicians More 
Services 
Than 24 Hours of 
$100 
Services in a Day  990,000 
  Services 
$80 
s 
n
o $60 
Milli
$40 
$20 
$-
Physicians  Nonphysicians 
Personally Performed By 
 
Source:  OIG analysis of 2007 Medicare NCH data and document review results, 2008.     
 
  OEI-09-06-00430   NONPHYSICIANS  WHO  PERFORMED  MEDICARE  PHYSICIAN  SERVICES   8   
F I N D I N G
  S 
The services that Medicare allowed for this population fall into the  
10 categories listed in Table 1.16  The percentage of services that the 
physicians did not perform personally ranged from 12 percent to   
96 percent among 10 medical categories.  With the exception of invasive 
services, these 10 categories correspond to the categories found in the 
American Medical Associations (AMA) Current Procedural Terminology  
(CPT), 2007 edition.  For purposes of this report, we removed the 
invasive services from their respective CPT categories and analyzed 
them separately.  
TABLE 1   
Categories of Services That Medicare Allowed  
Categories of 
Services and Who 
Performed the  Percentage of  All Services That 
Medicare Allowed   Percentage  Percentage 
Services When  
Service Category   for the Physicians  Performed by   Performed by  
Medicare Allowed  (Service Description)    (Percentage of Service Category)   Physicians   Nonphysicians  
Physicians More 
Than 24 Hours of  Invasive  34%   38%   62% 
Services in a Day  
   -Routine Venipuncture  37%  4%  96% 
 
   -Surgical Procedures  31%  88%  12% 
   -Non-oral Drug Administration  
    and Chemotherapy  29%  27%  73% 
   -Other Services   3%  63%  37% 
Noninvasive   66%   54%   46% 
  -Evaluation and Management (E&M)  23%  81%  19% 
  -Ophthalmology  20%  67%  33% 
   
-Rehabilitation Therapy  18%  13%  87% 
-Cardiovascular   10%  52%  48% 
  -Diagnostic Radiology  6%  60%  40% 
  -Other Noninvasive  23%  47%  53% 
 
        Total  100%   49%   51%  
  Source:  OIG analysis of document review results, 2008.    
 
 
16 For a listing of  the categories of services with subcategories, see Appendix D.  
  OEI-09-06-00430   NONPHYSICIANS  WHO  PERFORMED  MEDICARE  PHYSICIAN  SERVICES   9   
F I N D I N G S  
Nonphysicians performed almost two-thirds of the invasive services that 
Medicare allowed the physicians 
A service is invasive if it involves entry into the living body (as by 
incision or by insertion of an instrument).17  Invasive services  
account for 34 percent of all services that Medicare allowed the 
physicians, and nonphysicians performed 62 percent of them.  These 
invasive services ranged in complexity from routine venipuncture and  
drug injections to cataract surgery and extensive foot surgery.   
Nonphysicians performed almost all routine venipuncture and almost 
three-quarters of the non-oral drug administration services and  
chemotherapy.  Nonphysicians performed 12 percent of the surgical 
procedures.  
Nonphysicians performed almost half of the noninvasive services that  
Medicare allowed the physicians 
Two-thirds  of all the services that Medicare allowed the physicians were 
noninvasive services, and nonphysicians performed 46 percent of them.   
This includes evaluation and management (E&M), ophthalmology,  
rehabilitation therapy, cardiovascular, diagnostic radiology, and other 
noninvasive services such as diagnostic ultrasound and application of 
splints or casts.       
E&M services account for 23 percent of the services that Medicare allowed for 
the physicians.  Medicare allowed physicians the following types of E&M 
services:  office visits, inpatient services, consultations, and home visits.  
These services typically involve at least one of three key components 
patient history, physical examination, and medical decisionmaking.  E&M 
services can vary based on these three key components, and  
reimbursement is based  on one of five levels.18   E&M services also are  
classified by the setting in which they occur (e.g., office, nursing facility, or 
hospital) and by whether they are initial services or a repeat visit.19   
Finally, a consultation is a service provided by a physician whose opinion  
or advice about a specific problem is  requested by another physician or 
other appropriate source.20  
 
 
17 MedlinePlus, a service of the U.S. National Library of Medicine and  National 
Institutes of Health. Available online at 
http://www.nlm.nih.gov/medlineplus/mplusdictionary.html. Accessed on June 30, 2008. 
18 AMA, Current Procedural Terminology, Professional Edition, 2007, pp. 68. 

19 Ibid, pp. 933. 

20 Ibid, p. 14. 

  OEI-09-06-00430   NONPHYSICIANS  WHO  PERFORMED  MEDICARE  PHYSICIAN  SERVICES   10   
F I N D I N G S  
Ophthalmology services account for 20 percent of the services that 
Medicare allowed for the physicians.   Ophthalmology is the branch of 
medicine dealing with the eye, including its anatomy, physiology, and 
pathology.  The service categories for ophthalmology include:  eye 
examinations, diagnostic imaging and eye photography, and other 
services, such as ophthalmoscopy. 
Rehabilitation therapy services account for 18 percent of the services that  
Medicare allowed for the physicians.   Rehabilitation therapy is the 
treatment of functional limitations to prevent the onset and/or slow the  
progression of physical impairments after an illness or injury.21  These 
services typically are included in a plan of care and performed by 
physical therapists, occupational therapists, or speech-language 
pathologists.  The plan of care can include multiple treatment  
modalities.  Nonphysicians performed 87 percent of these services. 
Most of the rehabilitation therapy services that Medicare allowed for 
physicians were therapeutic exercises, massage therapy, ultrasound 
therapy, therapeutic activities, and electrical stimulation.  Other 
services included neuromuscular reeducation and manual therapy.  The 
physicians were allowed relatively  few physical and occupational 
therapy evaluations. 
Cardiovascular, diagnostic radiology, and other services account for the  
remaining 39 percent of the services that Medicare allowed for the physicians. 
Cardiovascular services account for 10 percent of the services that 
Medicare allowed for the physicians and include cardiography and cardiac 
catheterization.  Diagnostic radiology services account for 6 percent of the 
services that Medicare allowed for the physicians and include x-rays of the 
chest, lower extremities, spine, and pelvis.  Other noninvasive services 
account for 23 percent of the services that Medicare allowed for the 
physicians.  Examples of these services include radiation oncology services, 
diagnostic nuclear medicine services, and vascular studies. 
 
21 For a more complete definition  of physical therapy, see American Physical Therapy 
Association, Model Definition of Physical Therapy  for State Practice Acts in the Guide to 
Physical Therapy Practice, 1997, chapter 1, p. 2. 
  OEI-09-06-00430   NONPHYSICIANS  WHO  PERFORMED  MEDICARE  PHYSICIAN  SERVICES   11    
FF II NN DD II NN GG SS  

In the first 3 months of  
Unqualified nonphysicians performed 
2007, Medicare allowed  
21 percent of the services that physicians 
$12.6 million for approximately 
did not perform personally     
210,000 services performed by 
unqualified nonphysicians.  These 
nonphysicians qualifications were not appropriate vis-a-vis the services 
they performed.  (See Table 2 on the following page.)22   
Our primary criteria for determining whether nonphysicians were 
qualified to perform the services were State laws and regulations. In 
addition, for rehabilitation therapy services and initial patient services, 
we used the Medicare regulation that requires nonphysicians who 
perform the services incident to to  have received the training of a 
therapist.23    
Because the incident to rule allows physicians to bill for services 
performed by any personnel (licensed or unlicensed), we  cannot report 
that the services were paid in error by Medicare solely because they 
were performed by unqualified nonphysicians. In addition, we did not 
request physicians medical records and the reviewers did not review 
them. The reviewers determinations are not based on medical 
necessity, proper coding, or medical record documentation. The 
reviewers determinations are not based on Medicare rules and  
regulations,  except the services that were (1) by definition not incident 
to services24  or (2) rehabilitation therapy performed by nonphysicians 
who had not been trained as therapists.25   
Almost half of the services that were performed by unqualified 
nonphysicians were performed by nonphysicians who did not possess 
the required licenses or certifications according to State laws, 
regulations,  and/or Medicare rules.   Nonphysicians with no verifiable 
qualifications performed 25 percent of the services. We  could not verify 
the nonphysicians qualifications because the physicians did not provide 
adequate documentation.   Nonphysicians who lacked the necessary 
training performed another 25 percent of the services. Based on our 
reviewers professional judgment, the training program(s) did not 
address the nonphysicians competency to perform the service. Less  
 
22 See Appendix E for a listing of  nonphysician types and the services they performed.
  
23 42 CFR  410.60(a)(3)(iii), 410.26(b). 

24 42 CFR  410.26. 

25 42 CFR  410.60(a)(3)(iii). 

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F I N D I N G S  
than 1 percent of the services were in violation of the incident to rule; 
they were initial patient visits, which by definition cannot be  incident 
to a physicians initial service.26     
TABLE 2  Services Performed by Unqualified Nonphysicians  
Services Performed 
by Nonphysicians  Reason the Nonphysicians Were Unqualified  Percentage of Services  
When Medicare 
Did not possess the required licenses and/or certifications  49% 
Allowed Physicians 
More Than 24  
No verifiable qualifications  25% 
Hours of Services 
in a Day  Lacked training necessary for the service  25% 
 
Incident to violations  1% 
       Total  100%  
  Source:  OIG document review results, 2008.  
Unqualified nonphysicians performed 7 percent of the invasive services that 
physicians did not perform  
Unqualified nonphysicians performed fewer than 1 in 10 invasive services.  
See Chart 2 on the following page.  Invasive services could pose more risk  
to patients, especially complex procedures performed by unqualified 
nonphysicians. The unqualified nonphysicians who performed invasive 
services fall into three categories (items do not total 100 percent because of 
rounding): 
1.  Nonphysicians who lacked the necessary training performed   
54 percent of the services.   
2.  For 37 percent of the services, physicians did not submit 
documentation to confirm that the nonphysicians qualifications were 
valid. 
3.  Nonphysicians who did not possess  appropriate licenses or 
certification performed 8 percent of the services.  
 
26 Ibid. 
  OEI-09-06-00430   NONPHYSICIANS  WHO  PERFORMED  MEDICARE  PHYSICIAN  SERVICES   13   
F I N D I N G S  

 
CHART 2  
Invasive and Noninvasive  Services 
Services  
1,400,000 
Performed by 
Physicians, 
Qualified  1,200,000  Performed by 
Nonphysicians,  Unqualified 
Nonphysicians 
and  es  1,000,000 
Unqualified  vic
Nonphysicians   Ser
   of  800,000 
 er 
b Performed by 
m
Nu 600,000  QNounaplifhieydsi cians  
d 
e
ct
e
oj 400,000 
Pr
200,000  Performed by 
Physicians 
-
Invasive  Noninvasive 
Service Type 
  Source:  OIG document review results, 2008.  
Surgical procedures27 are among the more complex invasive services 
performed by unqualified nonphysicians.  Surgical procedures 
(excluding routine venipuncture) comprise 31 percent of the invasive 
services performed by unqualified nonphysicians.  These surgeries  
ranged from arterial injections to  complex skin surgery.   For example, 
medical assistants performed all of  the micrographic surgical removal of  
tumors not performed by physicians.  Our reviewers found that these 
types of procedures are beyond the scope of usual medical assistant 
curricula, and the physicians provided no documentation that  
confirmed the nonphysicians received additional training to qualify 
them to perform the service.  These services represent more than  
9,000 surgeries that nonphysicians performed on Medicare beneficiaries 
in the first 3 months of 2007. 
 
27 We used AMAs CPT definitions to determine which services in  our sample were 
surgeries.  Surgeries range broadly in the CPT, from routine venipuncture to heart/lung  
transplantation.  However, the most complex surgeries performed by the nonphysicians in  
our sample were skin grafts, skin tissue rearrangement, and removal of skin lesions.  The 
nonphysicians in our sample did not perform more complex surgeries, such as neurosurgery, 
cardiovascular surgery, or orthopedic surgery.  
  OEI-09-06-00430   NONPHYSICIANS  WHO  PERFORMED  MEDICARE  PHYSICIAN  SERVICES   14   
 F I N D I N G S  
Nonphysicians were not trained adequately to perform several other 
skin surgeries.  Unqualified nonphysicians performed 90 percent of  
three types of the skin surgeries not performed by physicians:  skin  
grafts, skin tissue rearrangement, and complex skin wound repairs.28   
Nurses performing outside their scopes of practice performed the skin 
grafts. Nurses and medical assistants, also performing outside their 
scopes of practice, performed the tissue rearrangement and complex  
wound repairs.  Our reviewers found that these surgeries are beyond  
the usual training and education of nurses and medical assistants, and 
the physicians provided  no documentation that confirmed these 
nonphysicians received additional training to perform the services.  
Altogether, these three types of skin surgeries represent more than 
9,000 surgeries that nonphysicians performed on Medicare beneficiaries 
in the first 3 months of 2007. 
Unqualified nonphysicians performed 31 percent of the noninvasive 
services that physicians did not perform 
Among the categories of services (e.g., E&M, ophthalmology), the percent 
of services performed by unqualified  nonphysicians ranged from 15 percent 
to 49 percent. (See Table 3 on the following page.)  The unqualified 
nonphysicians who performed invasive services fall into four categories:  
1.  Nonphysicians who did not possess  appropriate licenses or 
certification performed 56 percent of the services.  
2.  For 23 percent of the services, physicians did not submit 
documentation to confirm that the nonphysicians qualifications were 
valid. 
3.  Nonphysicians who lacked the necessary training performed   
20 percent of the services. 
4.  One percent of the services did not meet the incident to 
requirement because they were initial patient visits.  
 
28 For a list of all surgeries that are included in these categories, see AMA, Current 
Procedural Terminology, Professional Edition, 2007, pp. 5863.  
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F I N D I N G S  

TABLE 3  Percentage of Services Performed by Nonphysicians:  
Categories of 
Total, Qualified, and Unqualified 
Services That  
Medicare Allowed 
Nonphysicians 
Physicians That 
Service Category    Total    Qualified  Unqualified 
Were Performed by 
Qualified Versus 
Invasive  62%   93%   7%  
Unqualified 
Nonphysicians   Noninvasive   46%   69%   31% 
 
-E&M  19%  74%  26% 
  -Ophthalmology   33%  63%  37% 
  -Rehabilitation Therapy   87%  51%  49% 
-Cardiovascular   48%  85%  15% 
  -Diagnostic Radiology   40%  84%  16% 
  -Other Noninvasive  53%  84%  16% 
       Total  51%   79%   21%  
  Source:  OIG document review results, 2008.  
 
Unqualified nonphysicians performed 26 percent of the E&M services 
that physicians did not perform.  These nonphysicians performed office 
visits, inpatient services, consultations, and home visits. Office visits 
represent 74 percent of all E&M services performed by unqualified  
nonphysicians. Inpatient services, consultations, and home visits 
represent 8 percent, 13 percent, and 5 percent, respectively.   
Unqualified nonphysicians performed 37 percent of the ophthalmology 
services that physicians did not perform.  These nonphysicians 
performed eye examinations, diagnostic imaging, eye photography, and  
ophthalmoscopy.  Diagnostic imaging represents 47 percent  of the  
ophthalmology services performed by unqualified nonphysicians.  Eye 
examinations represent 35 percent of all ophthalmology services 
performed by unqualified nonphysicians.  The remaining 18 percent of 
services were eye photography and ophthalmoscopy services.    
Unqualified nonphysicians performed 49 percent of the rehabilitation 
therapy services that physicians did not perform.  These nonphysicians 
performed therapeutic exercises, massage therapy, ultrasound therapy, 
therapeutic activities, and electrical stimulation.  These five modalities 
represent 75 percent of all rehabilitation therapy modalities performed 
  OEI-09-06-00430   NONPHYSICIANS  WHO  PERFORMED  MEDICARE  PHYSICIAN  SERVICES   16   
F I N D I N G S  
by unqualified nonphysicians.  Other rehabilitation therapy services 
performed by unqualified nonphysicians include neuromuscular 
reeducation, manual therapy, and evaluations. 
Generally, State laws allow only physicians and licensed physical 
therapists, occupational therapists, or speech-language pathologists and  
licensed assistants to perform rehabilitation therapy.  However, when a 
physician bills the services as incident to, Medicare allows unlicensed 
nonphysicians to perform rehabilitation therapy if the service and the 
person who furnishes the service meet the standards and conditions 
that apply to physical therapy and physical therapists, except that a 
license to practice physical therapy in the State is not required.29  One 
nonphysician in our sample met this  criterion.  In addition to this 
nonphysician, massage therapists, medical assistants, and physical 
therapist assistants performed rehabilitation therapy services. 
 
 
29 42 CFR  410.60(a)(3)(iii). 
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  R E C O M M E N D A T I O N S  
 
Services performed by unqualified nonphysicians represent a risk to 
Medicare beneficiaries.   State laws that require training, certification, 
and licensure of nonphysicians help to ensure that patients receive safe 
and quality care.  However, among the physicians who billed Medicare 
for more than 24 hours of services in a day, nonphysicians performed 
half of the services billed, and unqualified nonphysicians performed one 
in every five services not performed by a physician.  These 
nonphysicians were not practicing pursuant to State laws, State 
regulations, or Medicare regulations;  had no verifiable credentials; 
and/or had  not received the appropriate training to perform the services 
(according to our reviewers professional judgment).   
We are concerned about  the potential scale of this problem.   We cannot 
report the extent to which all physicians who bill Medicare bill for 
services performed by unqualified nonphysicians because our sample 
included only those physicians who billed for more than 24 hours of 
services in a day.  The sample was a proxy for physicians who billed 
incident to. Medicare claims data do not identify incident to services  
as such.  However, we have no reason to believe  that the issues 
identified in this review are unique to these physicians.  For  example, 
physicians who bill Medicare for fewer than 24 hours of services in a  
day might also bill for incident to services performed by unqualified 
nonphysicians. Although our sample represents relatively few 
physicians (3,165 of the 805,401 physicians who billed Medicare in the 
first 3 months of 2007), the potential exists that this problem is more 
widespread than we can report at this time. 
Therefore, we recommend that CMS:  
1.  	 Seek revisions to  the incident  to rule.  The rule  should require 
that physicians who  do not personally perform the services  they  
bill to Medicare ensure  that no persons except: 
a.  	 licensed physicians personally  perform the services or   
b.  	 nonphysicians who have the  necessary training, 
certification, and/or  licensure, pursuant to State laws, 
State  regulations, and Medicare regulations personally  
perform the services under the direct supervision of a 
licensed physician. 
2.  	 Require physicians who bill services  to Medicare that they do not 
personally perform to identify the  services  on their Medicare 
  OEI-09-06-00430   NONPHYSICIANS  WHO  PERFORMED  MEDICARE  PHYSICIAN  SERVICES   18   
E X E C U T I V E   S U M M A R Y   
claims by  using a service code modifier.  The modifier  would allow 
CMS to monitor claims to ensure that physicians are billing for 
services performed by nonphysicians with appropriate  
qualifications.  
3.  	 Take appropriate action to address the claims  for services  that we  
detected that: 
a.  	 were billed by physicians and performed by nonphysicians 
that were, by definition,  not  incident to services and 
b.  	 were for rehabilitation therapy services performed by 
nonphysicians who did not have the training of a therapist.    
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL  
RESPONSE 
CMS concurred with two of our three recommendations.  For  the full 
text of CMSs comments, see Appendix F. 
CMS did not concur with our recommendation to create a service code  
modifier to identify physicians claims for services that physicians do 
not personally perform.  CMS stated  that incidental services are often 
shared by physicians and staff, making definition of a service not 
personally performed operationally difficult.  However, CMS stated it 
agrees with our underlying objective of increasing the available data on 
services provided incident to.  
We continue to believe that CMS should have the ability to identify and 
monitor physicians claims for services that physicians bill, but do not 
personally perform.  This review identified unqualified nonphysicians 
who furnished services to Medicare beneficiaries.  We believe that the 
lack of a service code  modifier to identify physicians incident to claims  
represents a significant vulnerability to the Medicare program. CMS 
stated it would study the operational issues involved in implementing 
the recommendation.  We look forward to learning the specific steps 
CMS plans to take with respect to this issue. 
CMS provided technical comments in addition to its response to our 
recommendations.  If appropriate, we incorporated the technical 
comments into the final report.  
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  A P P E N D I X ~ A
 
Detailed Methodology   
Using Part B Medicare National Claims History (NCH) data for the first 
quarter of 2007, we identified all days during which Medicare allowed 
services for physicians30 in a single day that exceeded 24 hours of 
physician worktime. We randomly selected 250 of these physician-day  
combinations and requested that the physicians identify who performed  
each service that Medicare allowed on the selected day(s).  We asked the 
physicians to submit all relevant credentials for the nonphysicians 
whom they identified.  Our contractors nurse-reviewers determined  
whether the nonphysicians had all the training, certifications, and 
licenses as required by State laws, State regulations, and/or Medicare 
regulations to perform the services billed.  The following is a summary 
of our methodology.   
Sample 
Sample definition.  From  NCH data for services rendered January 
through March 2007, we created a population of physician-days.  We 
defined a physician-day as a single day (24 hours), per physician, 
wherein Medicare allowed services that apparently exceeded 24 hours of 
physician worktime.31  Our method to select physician-days was as 
follows: 
1.  We extracted from the NCH all physician claims that Medicare 
allowed (excluding claims billed by all groups, institutions, or 
suppliers) in the first quarter of 2007. 
2.  Using the 2007 Medicare Physician Fee Schedule, we assigned the 
intra-time (physician time) component to each line-item claim. 
3.  We calculated the total time per physician, per day for each day that 
Medicare allowed claims for services (excluding pathology/laboratory  
services and major surgeries).32  
 
30 We excluded claims from  doctors of dental surgery, podiatrists, optometrists, and  
chiropractors.   
31 We used the Medicare Physician Fee Schedule, which lists the average time associated  
with each service that physicians can bill to Medicare.  The fee schedule is available online 
at http://www.cms.hhs.gov/PhysicianFeeSched/01_Overview.asp#TopOfPage. Accessed on 
June 9, 2008. 
32 Prior to our pretest of the review protocol (page 22), we excluded pathology and  
laboratory services.  Following the pretest, we concluded that physicians were unlikely to 
bill major surgery services to Medicare as incident to services.  The physicians in our  
pretest who performed major surgery billed  few or no incident to services. 
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 A P P E N D I X   ~    A   
 
4.  We created  a database that included one observation for each unique 
combination of physician and day (physician-day) during which the 
physicians total intra-time (the physicians personal time) was equal 
to or  exceeded 24 hours.  
5.  We selected a stratified random sample33  of 250 physician-days.  
6.  We created a database of all claims Medicare allowed for the 
physicians on the physician-days. 
Sample population.  In the first quarter of 2007, Medicare allowed 
claims for services from 3,165 physicians for a total of  
18,403 physician-days.  Medicare allowed $204,415,178 for these 
physicians claims.  We selected our sample from  this population.  These 
3,165 physicians are 0.4 percent of the 805,401 physicians who 
submitted Medicare claims for services in the first 3 months of 2007. 
Final sample.  Our sample of 250 physician-days included  
30,822 line-item claims for services that Medicare allowed for  
221 physicians.  Because our sample unit was the unique combination 
of physician and day, some physicians had more than 1 day of services  
in our sample.  (See Table 4 on the following page.)  Four of the  
two-hundred twenty-one physicians in our sample were part of an 
active Office of Inspector General (OIG) investigation, so we removed 
them from the final sample.  Fifteen physicians did not respond to our 
request for information  prior to the deadline, and we removed them  
from the sample.34   Therefore, our final review sample consisted of 
27,379 line-item claims allowed by Medicare for 202 physicians on  
228 physician-days.      
 
33 Stratum 1 consisted of physician-days for which Medicare allowed a total of $10,000 
or more for claims on the day.  Stratum 2 consisted of physician-days for which Medicare 
allowed a total of less than $10,000 for claims on  the day.  We selected 125 physician-days 
from each stratum.  Stratifying  the sample in this way increased our precision  when we  
projected some statistics to the population, such  as Medicare allowed amounts.  
34 Our review of these physicians reasons for not complying with  our information request  
is ongoing.   We  will take appropriate action that may include referring the physicians to the 
Centers for Medicare & Medicaid Services or to OIGs Office of Investigations.  
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 A P P E N D I X   ~    A   
 
Table 4  Sample of Physician-Days for First Quarter of 2007 
Days When Medicare 
Allowed the Physician  
More Than 
Physician-Days 
24 Hours in Services   (Per Physician)  Total Physicians  Total Physician-Days 
 
1  197  197 
2  20  40 
3  3  9 
4  1  4 
Selected Sample  221  250 
Physicians Under 
Investigation  4  4 
Removed 
Final Sample  217  246 
Non-Respondents 
15  18 
Removed 
Final Review Sample  202  228 
Source:  OIG analysis of 2007 Medicare NCH data, 2008.  
Review Protocol 
Data collection.  We requested that each sampled physician logon to our 
secure Web site and list who personally furnished each of the services  
that Medicare allowed on the sampled day(s).  We asked the physicians 
to list all relevant licenses, certifications, and training (relevant to the 
service performed by the nonphysician) for each nonphysician whom 
they reported as personally having performed the sampled services.  
We  requested that the physicians mail to us documentation to support 
the information that they provided on the Web site.  Our Web site 
allowed the  physicians to print and sign attestation forms, attesting to 
the accuracy and completeness of the information they provided us via 
the Web site. We requested copies  of all licenses, certifications, 
diplomas, and proof of training for each nonphysician.  We requested 
copies of the physicians schedules of patient appointments and  
nonphysician hours for the sampled day(s).   
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Nonphysician-appropriateness determinations.  We provided the 
information submitted by the physicians to our contractor. Registered 
nurses served as the reviewers and determined whether the  
qualifications of the nonphysicians who performed the sampled services  
were appropriate vis-a-vis the services that the nonphysicians 
performed.   
Nonphysicians in 29 States performed Medicare services for  the 
physicians in our sample.  The nonphysicians included technicians, 
nurses, licensed or certified assistants, and therapists.  In addition, 
some nonphysicians in our sample were not licensed or certified but 
instead had received other formal medical training, on-the-job training, 
or no formal medical training at all.  
In addition to Medicare regulation,35 the reviewers based their decisions  
on State laws and regulations.  For each State, the reviewers researched  
the State laws and regulations applicable to each nonphysician in our  
sample who performed services in that State.  For the services 
performed by nonphysicians that are not addressed by State laws and 
regulations,  the reviewers researched the training that the 
nonphysicians received and used their professional judgment to 
determine whether the training addressed the nonphysicians 
competency to perform the service.   
The reviewers deemed a nonphysicians qualifications appropriate if the 
nonphysician who performed the services had all the training, 
certifications, and licenses, required by State laws, State regulations, 
and/or Medicare regulations.  The reviewers deemed the nonphysicians 
qualifications inappropriate if: 
 	  the nonphysician performed the service without the licenses,  
certifications, or training required by Medicare regulation;36   
 	  the nonphysician performed the service outside of his or her  
professions  scope of practice as defined by State laws and/or  
regulations and additional training that the nonphysician attended 
 
35 The incident to rule allows physicians to bill for services performed by any personnel 
(licensed or unlicensed).  However, when a physician bills rehabilitation therapy services as 
incident to, Medicare requires that unlicensed nonphysicians who perform the services  
have received the training of a licensed therapist (42 CFR  410.60(a)(3)(iii)).  In addition, 
the incident to rule requires the physician to personally perform the initial service.  Initial 
services billed by physicians but performed by nonphysicians are not incident to services 
(42 CFR  410.26(b)).  
36 42 CFR  410.60(a)(3)(iii), 410.26(b)).  
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did not address the nonphysicians competency to perform the 
service; and/or 
 	  the physician did not provide adequate documentation to  confirm  
that the nonphysicians credentials were valid. 
Adverse actions.  We determined whether the physicians in our sample 
and the nonphysicians who personally furnished the sampled services 
had been reprimanded (e.g., suspended license, revoked license, or  
official reprimand) by a State licensing agency and/or had been excluded  
from Federal health care programs.  We researched each physician and 
nonphysician using the Healthcare Integrity and Protection Data Bank 
and OIGs Exclusions Database.  We focused on the physicians and 
nonphysicians status on the date during which they furnished the 
sampled services.  However, we reviewed all entries for the physicians 
and nonphysicians in both databases, regardless of the dates of the 
adverse action.  To the extent that they are listed in either of these two 
databases, we noted all criminal convictions.  
No physicians or nonphysicians in our sample had active adverse 
actions that would have  precluded them from providing the sampled 
services.  No physicians or nonphysicians in our sample were excluded  
from Federal health care programs on the dates of service we reviewed. 
Patient and nonphysician schedules.   We requested that the physicians 
submit their patient and nonphysician-staff schedules on the sampled 
date(s) of service.   We reviewed these schedules to determine how many 
patients and staff the physicians had scheduled on the same  day. 
Analysis.  We stored the information that we gathered from  our secure 
Web site in a database.  The reviewers input their review decisions into 
the same database. Using SAS software, we converted the database 
into SAS-format datasets and reviewed the data for completeness and  
logic.  We analyzed the data using SAS.  Finally, we used SUDAAN 
software to  produce confidence intervals for the  projectable statistics.       
Projectable statistics.  All statistics in the findings section of this report  
are projections to the total population of physician-days in the first  
3 months of 2007.  Appendix B includes the confidence intervals for 
selected statistics.  Appendix C describes features of the sample that we 
did not project to the population and, therefore, these features should  
not be extrapolated to any population other than the 202 physicians and 
27,379 line-item claims for the sampled services.   
  OEI-09-06-00430   NONPHYSICIANS  WHO  PERFORMED  MEDICARE  PHYSICIAN  SERVICES   24   
A P P E N D I X   ~   A  
Limitations.   The findings in this report about the physicians, 
nonphysicians, and the services that they performed are confined within 
the context  of physician-days (the unique combination of physician 
and day in the first 3 months of 2007 during which Medicare allowed 
services for  the physician who apparently exceeded 24 hours  of 
physician worktime).  We used physician-days to create a population 
of Medicare incident to services. 
Therefore, our findings are limited to the physician population for whom  
Medicare allowed services on physician-days in the first quarter of 
2007. The findings in this report should not be projected to all 
physicians for whom Medicare allows services.  Nor should our findings  
be projected  to all nonphysicians who perform services under the 
auspices of physicians for whom Medicare allowed claims.     
  OEI-09-06-00430   NONPHYSICIANS  WHO  PERFORMED  MEDICARE  PHYSICIAN  SERVICES   25   
  A P P E N D I X  ~ B  
 
Confidence Intervals 
95-Percent 
Statistic  Point Estimate 
Confidence Interval 
Physicians personally performed 49 percent of the Medicare services that they  were   
49%  43% to 54% 
allowed in the first quarter of 2007 
Medicare allowed $105 million for services that the physicians personally  performed    $104,822,245  $91,570,910 to  $118,073,580 
Medicare allowed approximately  934,000 services that the physicians personally performed  934,388  821,075 to 104,7702 
Medicare allowed $85 million for services that the nonphysicians personally performed   $84,593,424  $62,110,148 to $107,076,700 
Medicare allowed approximately  990,000 services that the nonphysicians personally  
990,457  835,268 to 1,145,646 
performed 
Nonphysicians performed almost two-thirds of the invasive services that Medicare allowed 
62%  52% to 72% 
the physicians 
Nonphysicians performed almost half of the noninvasive services  46%  40% to 52% 
Nonphysicians with inappropriate qualifications performed 21 percent of the services that 
21%  15% to 27% 
physicians did not perform 
In the first 3 months of 2007, Medicare allowed $12.6 million performed by nonphysicians 
$12,561,845  $8,768,913 to $ 16,354,777 
with inappropriate qualifications 
In the first 3 months of 2007, Medicare allowed approximately 210,000 services performed 
209,773  146,337 to 273,210 
by nonphysicians with inappropriate qualifications 
Nonphysicians with inappropriate qualifications performed 7 percent of the invasive services 
7%  4% to 11% 
that physicians did not perform 
Nonphysicians with inappropriate qualifications performed 31 percent of the noninvasive 
31%  23% to 39% 
services that physicians did not perform 
Reason the Qualifications Were Inappropriate    
 Did not possess the required licenses and/or certifications     49%  34% to 64% 
No verifiable qualifications    25%  14% to 36% 
Lacked training necessary for the service  25%  14% to 35% 
Incident to violations    1%  0.1% to 2%  
Source:  Office of  Inspector General analysis of 2007 Medicare  National Claims History data and document review  results, 2008.   
 
 
 
  OEI-09-06-00430   NONPHYSICIANS  WHO  PERFORMED  MEDICARE  PHYSICIAN  SERVICES   26   
   A P P E N D I X ~ C
Selected Features of the Sampled Physician-Days 
All Physician-Days   
N  Mean  Median  Minimum  Maximum 
(228 Physician-Days, 202 Physicians) 
Services  27,379  120  111  9  583 
Hours  8,351  37  31  24  157 
   Nonphysicians  1,006  7  4  0  67 
Beneficiaries  10,115  44  35  4  282 
   Services Performed by Physicians  13,854  64  53  1  394 
   Services Performed by  Nonphysicians  13,525  59  45  0  405 
   Percent of Services Performed by 
  43%  43%  0%  100% 
   Nonphysicians 
Medicare Allowed Amount  $2,238,009  $9,816  $9,938  $276  $45,055 
Physician-Days During Which 
Nonphysicians and Physicians  
N  Mean  Median  Minimum  Maximum 
Performed the Services  
(166 Physician-Days, 145 Physicians) 
Services  22,088  133  120  9  583 
Hours  6,347  38  31  24  157 
    Nonphysicians  1,006  8  5  2  67 
Beneficiaries  8,145  49  37  4  282 
   Services Performed by Physicians  8,563  52  37  0  394 
   Services Performed by  Nonphysicians  13,525  82  67  1  405 
   Percentage of Services Performed by  
  59%  61%  0.4%  100% 
   Nonphysicians 
Medicare Allowed Amount  $1,601,106  $9,645.22  $9,412  $276  $45,055 
All Physician-Days During Which 
Physicians Performed  All Services  N  Mean  Median  Minimum  Maximum 
(62 Physician-Days, 58 Physicians*) 
Services  5,291  85  82  10  250 
Hours  2,003  32  29  24  73 
Beneficiaries  1,970  32  28  5  111 
Medicare Allowed Amount  $636,903  $10,273  $10,032  $4,272  $29,543 
*One physician in our sample personally performed all of  the services that Medicare allowed on 2 days.  On the third  day, the physician and 
nonphysicians performed the services that Medicare allowed.   
  OEI-09-06-00430   NONPHYSICIANS  WHO  PERFORMED  MEDICARE  PHYSICIAN  SERVICES   27   
A P P E N D I X   ~   C  

 
Selected Features of the Sampled Physician-Days (continued) 
All Physician-Days   
N  Mean  Median  Maximum  Minimum 
(228 Physician-Days, 202 Physicians) 
Patients on Physician-Days 
17,171  87  46  3,706  3 
(according to the physicians schedules)  
Staff of Physician-Days  
204  10  7  66  1 
(according to the physicians schedules)  
Percentage of  
Top Five Physician Specialties          
Physician-Days 
Ophthalmology   24%         
Cardiology   15%         
Dermatology  13%         
Internal Medicine  7%         
Radiation Oncology   6%         
Source:  Office of  Inspector General analysis of 2007 Medicare  National Claims History data and document review  results, 2008.   
 
 
 
 
 
 
 
 
  OEI-09-06-00430   NONPHYSICIANS  WHO  PERFORMED  MEDICARE  PHYSICIAN  SERVICES   28  
  A P P E N D I X ~ D
Categories of Services That Medicare Allowed by  Physicians/Nonphysicians   
Percentage of  All Services That  Percentage  Percentage 
Service Category    Medicare Allowed for the Physicians Performed by   Performed by  
(Service Description)    (Percentage of Service Category)   Physicians   Nonphysicians  
Invasive  34%   38%   62% 
   -Routine Venipuncture  37%  4%  96% 
   -Surgical Procedures  31%  88%  12% 
   -Non-Oral Drug Administration  
    and Chemotherapy  29%  27%  73% 
   -Other Services   3%  63%  37% 
Noninvasive   66%   54%   46% 
  -Evaluation and Management   23%   81%   19% 
 -Office Visits   73%  82%  18% 
-Inpatient  18%  76%  24% 
     -Consultations  8%  90%  10% 
     -Home Visits      1%  64%  36% 
  -Ophthalmology*                                                         20%   67%   33% 
     -Eye Examinations  69%  73%  27% 
   
     -Diagnostic Imagining and Eye Photography  26%  54%  46% 
     -Other Services  4%  65%  35% 
   
  -Rehabilitation Therapy   18%   13%   87% 
   
     -Therapeutic Exercises, Massage Therapy,  
      Ultrasound Therapy, Therapeutic Activities, 
      and Electrical Stimulation.    73%  10%  90% 
  
-Physical and Occupational 
      Therapy Evaluations  1%  19%  81% 
     -Other Services  26%  22%  78% 
  -Cardiovascular  10%   52%   48% 
  -Diagnostic Radiology   6%   60%   40% 
  -Other Noninvasive   23%   47%   53% 
 Total  100%   49%   51%  
Source:  Office of  Inspector General analysis of 2007 Medicare  National Claims History data and document review  results, 2008.     
*Row does  not total 100 percent because of rounding.  
  OEI-09-06-00430   NONPHYSICIANS  WHO  PERFORMED  MEDICARE  PHYSICIAN  SERVICES   29   
  A P P E N D I X ~ E
AA PP PP EE NN DD II XX    ~~    AA   
 
 
Services Performed by Nonphysicians by Service Category and Nonphysician Qualifications 
   
  Formal Medical Training*  No Formal Medical Training 
           
    Licensed or    Other      
    Certified    Medical  On-The-Job  No Relevant  
Service Category   Technicians  Nurses  Assistants   Therapists  Training   Training   Qualifications** 
Invasive  40%  30%  15%  <1%  <1%  11%  4% 
Noninvasive   39%  8%  17%  25%  2%  2%  9% 
-Evaluation and  
 Management  10%  46%  39%  2%  <1%  3%  <1% 
  -Ophthalmology   43%  <1%  15%  0%  5%  <1%  35% 
-Rehabilitation 
   Therapy   14%  4%  21%  62%  0%  0%  2% 
-Cardiovascular   61%  11%  15%  2%  5%  4%  6% 
-Diagnostic 
   Radiology   87%  0%  8%  0%  3%  0%  2% 
  -Other    
Noninvasive  62%  5%  6%  13%  1%  5%  9% 
      Total  39%  17%  16%  15%  1%  6%  7% 
*Technicians include phlebotomists  and medical sonographers.  Nurses include registered nurses and nurse practitioners.  Licensed or certified assistants 
include physician assistants and medical assistants.  Therapists include physical therapists or  massage therapists.  Nonphysicians with other medical training 
include paramedics.  
**Includes nonphysicians  for whom physicians did not submit documentation to confirm their qualifications.  
Rows do not  total 100 percent because of rounding and/or some services were performed by two nonphysicians simultaneously.  
Source:  Office of  Inspector General analysis of 2007 Medicare  National Claims History data and document review  results, 2008.   
 
 
 
  OEI-09-06-00430   NONPHYSICIANS  WHO  PERFORMED  MEDICARE  PHYSICIAN  SERVICES   30 
 x
A P PEN 0 F
AGENCYCOMMENTS
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FROM: Charlene C:}
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ActingAdministrator
SUBJECT: OfficeofInspectorGeneral'sDraftReport: "Prevalenceand Qualificationsof
Nonphysicians WhoPerformedMedicarePhysicianServiccs"(OEI-09-06-00430)
Thankyoufortheopportunitytoreviewand commenlontheOfficeoflnspectorGeneral's
(OIG)draftreportentitled,"PrevalenceandQuaiificatlons'ofNonphysiGiansWhoPerformed
MedicarePhysicianServices."
TheCentersfoJ'Medicare&MedicaidServicesCCMS)appreciatesihetlmeartdresour.eesOIG
hasinvestedto'researchandreportonthisissue. Medlcarehascoveredservices"incidentto"the
servicesofphysicianssinc-ethebeginningoftheMedicareprogramin1965,undersection
186I(s)(2)(A)oftheSocialSecurityAct(theAcf).
UsingPartBMedicareclaimsdataforthefirstquarterof2007,theOIGidentifi,edalldi\ys
duringwhichMedicareallowedservicesforphysioiansinasingledayexceeded24hol\l'sof
physicianworktime. TheseseJyicesrepresentedabout$190million inallowedcharges. About
onehalfoftheseserviceswerenotpersonallyperformedbyaphysiDian. OftheallowedserVices
thatwerenotperformed byphysicians,21 percentwereperformedbystafftheOIGdetinedtobe
unqualified. orGfoundthatsuchunqualifiednonphysicia.nsperformed37percentofthe
ophthalmologysei"Vices(primarilydiagnosticimagingandeyeexaminations)thatwerefurnished
bynonphysicians. Also,49percentofrehabilitationtherapyservicesperformed by
nonphysicianswerefurnished bystaff(includingprimarilytherapeuticexercise,massage
therapy,ultrasoundtherapy, therapeuticactivities,andelectricalstimulation)thattheOlG found
tobeunqualified.
TheOlGmadethefollowingrecommendations:
omRecommendation
Seekrevisionstothe"incidentto" rule. Thenileshouldrequirethatphysicianswhodonot
personallyperformthe.servicestheybilltoMedicareensurethatnopersonsexcept:
 licensedphysicianspersonallyperformtheservicesor
oE1090600430 NONPHYSICIANS WHO PERFORMED MEDICARE PHYSICIAN SERVICES 31  
AA PP PP EE NN DDII XX   ~~   FF  

 
Page2- Daniel R. Levinson
 nonphysicianswhohavethenecessarytraining,certification,andforlicensun:,pursuant
toStatelaws,Stateregulations.andMedicareregulationspersonallyperformtheservices
underthedirectsupervisionofalicensedphysician.
CMS Response
Weconcurwiththerecommendation. CMSiscurrentlyintheprocessofclarifyingthemanual
policiesrelativetoservicesincidenttophysicians' services. Wewillprovideimprovedguidance
fordocumentingthequalificationsofthepersonperformingservicesbilledtoMedicareby
physiciansandthosenonphysicianpractitionerswhomaybillservices"incidentto"their
services.
OIG Recommendation
Requirephysicianswhobill forservicesthattheydonotpersonallyperformtoidentifythe
servicesontheirMedicareclaimsbyusingaservicecodemodifier. Themodifierwouldallow
CMStomonitorclaimstoensurethatphysiciansarebillingforservicesperformedby
nonphysicianswithappropriatequalifications.
CMS Response
Wenon-concurwiththisrecommendationasit iscurrentlystructurcd,notbecausewedisagree
with itsundcrlyingobjectivcofincreasingtheavailabledataonservicesprovided"incidentto".
butbecauseincidentalservicesareollcnsharedbyphysiciansandstaff,makingdefinitionofa
servicenot"personallypCrfOffiled"operationallydifficult. CMSwill studytheoperational
issuesinvolved inaddingcodemodifierstoservicesfurnished exclusivelybystafTotherthanthe
physician identifiedastherenderingprovider.
OIG Recommendation
Takeappropriateactiontoaddresstheclaimsthatwedetectedthatwerebilkdbypbysicians:
a.andperformedbynonphysieianswhowere,bydefinition,nOI"incidentto"servicesand
b. for rehabilitationtherapyservicesperformedbynonphysieianswhodidnothavethetmining
ofatherapist.
CMS Response
Weconcurwithtbisrecommendation. eMSwillsbaretbcOIGreportandanyadditionalclaim
infonTlationreceivedfrom theOIGwiththe MedicareAdminiSlnlliveContractors(MACs).
CMSwill instructtheMACstoconsidertheissuesidentifiedinthisreportandtheadditional
claiminformation whenprioritizingtheirmedical reviewstrategiesorotherinterventions.
Thankyouagain fortheopportunitytoreviewtbisreport. WeappreciatetbeOIG'seffortson
thisstudyand look forward toworkingwiththemonotherissuesinthefutllre.
OEI-09-06-00430   NONPHYSICIANS  WHO  PERFORMED  MEDICARE  PHYSICIAN  SERVICES   32   
A P P E N D I X   ~   F  
  A C K N O W L E D G M E N T S
 
 
This report was prepared under the direction of Timothy S. Brady, 

Regional Inspector General for Evaluation and Inspections in the  

San Francisco regional office, and Deborah W. Harvey, Deputy Regional 

Inspector General. 
   
Steven Zerebecki served as the team leader for this study.  Other 

principal Office of Evaluation and Inspections staff from the 
  
San Francisco regional office who contributed to the report include 

Veronica Gonzalez, Scott Hutchison, and Marcia Wong; central office 

staff who contributed include Robert Gibbons, Doris Jackson, and Rita 

Wurm. 

 
  OEI-09-06-00430   NONPHYSICIANS  WHO  PERFORMED  MEDICARE  PHYSICIAN  SERVICES   33