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"STANDING ORDERS" VERSUS "INCIDENT TO" SERVICE
by Deborah Green - Attorney at Law
In many multi-disciplinary settings, the chiropractor is employed by a medical practice to render chiropractic services. An MD or DO (referred to hereinafter as the "MD") sees the patient when the patient first presents, or in some instances a few visits later, recommends chiropractic care (or approves the chiropractic care that has already been rendered retroactively) and then sees the patient again, if at all, many weeks later. The patient is treated by the chiropractor but the treatment is billed as if the MD were rendering the services to the patient personally or as if the MD was physically present in the office. This scenario is performed under the fiction of the "standing order" and apart from being fraudulent and abusive of the system, it is ripe for a federal or state "False Claims Act" prosecution. The penalties are straight forward. Presenting or causing to be presented a claim for physician's services, knowing that the individual who furnished the services was not a licensed physician will cost you $25,000.00 for each such claim submitted, imprisonment for up to five years, or both, by the federal government. The states have their own set of criminal and civil penalties, however, you do get free television exposure on the evening news when you are arrested. If you think that your operation is too small for the government to take notice, think again. Many actions are brought by disgruntled ex-employees and, if they are successful, they get to share in the fines that the practice will have to pay the government. (Think about that the next time you decide to fire the receptionist). These actions are known as qui tam actions and will be discussed in a future article.
Many of my clients have asked me whether they can rely on "standing orders" to treat patients when the MD is not physically present in the office. My "standing" response is a categorical "NO!!!". My clients then tell me that "everybody is doing it". I then tell my clients that the Federal government has allocated over Two Hundred Million dollars in additional funds towards the eradication of fraud and abuse in the health care industry.
To understand why a "standing order" is inappropriate one must first understand exactly what a "standing order" is. A "standing order" (which include protocols) is an order conditioned upon the occurrence of certain clinical events. All patients who meet those clinical events are treated the same way. "Standing orders" are frequently used in hospitals or public health clinics that treat specific diseases. For example, a venereal disease control program will use protocols for antibiotic dosages promulgated by the Center for Disease Control ("CDC"). Once the medical director has identified the specific type of venereal disease the patient has, the nurse will administer the antibiotics as specified by the CDC protocol and authorized by the physician who has diagnosed the patient. In such a circumstance, the CDC protocol for the administration of the specific antibiotic is considered the "standing order" and the event which sparks the use of this "standing order" is the diagnosis of the specific venereal disease. The nurse is allowed no discretion or judgment.(1)
Therefore, if a chiropractor is employed in a medical office and no MD is present when she is treating patients, she can treat only to the extent of her license limits. If a MD examines the patient before the chiropractor treats the patient but leaves the physical premises before or while the chiropractor is treating the patient, that patient's treatment may not be billed as if the MD performed the treatment but must be billed as having been performed by the chiropractor.
Despite what "everybody is doing", state and federal laws are quite strict with respect to requirements as to who may or may not perform certain functions and under what circumstances. These laws include, but are not limited to, medical practice acts, state and federal controlled substance laws, various administrative rules governing protocol-oriented quality assurance activities and laws and regulations limiting physician reimbursement when the work is in fact performed by physician extenders ("PEs")(This term will be used to describe physician's assistants, nurse practitioners, child health associates, public health nurses, anesthetists, psychologists, technicians, occupational and physical therapists and other aides engaged in medical practice under the MD's authority).
What I recommend to my clients is that they comply with their state's "incident to" laws. The term "incident to" a physician's professional services means that the services or supplies are furnished as an integral, although incidental, part of the physician's personal professional services in the course of diagnosis or treatment of an injury or illness. The "incident-to" service need not be directly linked to a specific physician action; the service can simply be part of a doctor's "course of treatment". Broadly speaking, under "incident-to" services, Medicare and many other third party payors will pay for the services rendered by PEs who are a MD's employees as if the MD herself actually rendered the service. Coverage of services and supplies "incident to" the professional services of a MD in private practice is limited to situations in which there is direct personal MD supervision. Thus, where a MD employs PEs to assist her in rendering services to patients, directly supervises such PEs and includes the charges for their services in her own bills, the services of such PEs are considered "incident-to" the MD's service. HCFA has set no limits on who can perform services "incident-to" as long as that person is an employee of the MD (this can include a leased employee), the MD directly supervises the services and all other criteria for billing "incident-to" are met. There is no reference to state licensure because the physician is directly responsible for the actions of the PEs treating patients under her supervision. However, the most prudent course of action is to check with both state licensing requirements and your carrier's requirements, as both the individual states and/or carriers do have leeway to impose more stringent requirements than HCFA if they so choose.
Certain rules must be followed in order to be able to bill for "incident to" services. The services (and supplies including drugs and biologicals which cannot be self-administered) must be:
Services include not only services ordinarily rendered by a MD's office staff person (e.g., medical services such as taking blood pressures and temperatures, giving injections, and changing dressings) but also services ordinarily performed by the MD herself such as minor surgery, setting casts or simple fractures, reading x-rays, and other activities that involve evaluation or treatment of a patient's condition.
To be covered, supplies, including drugs and biologicals, must represent an expense to the MD. For example, in a situation where a patient purchases a drug and the MD administers it, or where the the supplies in question are usually not found in an office setting or the services rendered are usually not performed in an office setting, the cost of the drug, the supplies and/or the services would not be covered under the "incident-to" provision.
This does not mean that in order to be considered "incident-to" there must be a service rendered or a supply furnished by the MD each time there is a service rendered by the PE. Such a service or supply could be considered to be "incident-to" when furnished during a course of treatment where the MD performs the initial service and subsequent services with sufficient frequency to reflect her active participation in, and management of, the patient's course of treatment. (However, the direct personal supervision requirement must still be met with respect to every non-MD service.)
Direct personal supervision in an office setting does not mean that the MD must be present in the same room with the PE. However, the MD must be present in the office suite and immediately available to provide assistance and direction throughout the time the PE is performing services. Telephone contact is not sufficient.
Services provided by PEs who are not employed by the MD, even if provided on the MD's order or included in the MD's bill, are not covered as "incident- to" since the law requires that the services be rendered by the MD's employee. To be considered an employee for purposes of "incident-to", the PE performing an "incident to" service must be a part-time, full-time, or a leased employee of the supervising MD, MD group practice, or of the legal entity that employs the MD who is providing the direct personal supervision.
A non-MD practitioner such as a physician's assistant or a nurse practitioner may be licensed under State law to perform a specific medical procedure and may be able to perform the procedure without MD supervision and have the service separately covered and paid for by Medicare as a physician's assistant's or nurse practitioner's service. However, in order to have that same service covered as "incident-to" the services of a MD, the service must be performed under the direct personal supervision of the MD as an integral part of the MD's personal in-office service.
Although "incident-to" assistance can help a MD service many more patients than she could were she required to work without such assistance, the MD must ascertain whether the PEs she has hired have been excluded from any federal health care programs. Pursuant to the recently enacted Balanced Budget Act of 1997, any doctor who contracts with a provider that the doctor "knew or should have known" was excluded from a federal health care program for the provision of items or services payable by such a program may be liable for civil money penalties in the amount of $10,000.00 for each "incident-to" service billed to the federal government as well as being required to refund up to three times the amount of such billings. Therefore, it would seem to be expedient for the MD to obtain as much information as possible about her PEs and to obtain sworn statements from them and any agency which referred them, that they have not been excluded from any health care program. The proper credentialing of employees will be addressed in a future issue.
1. Richards III JD, Edward P. and Katherine C. Rathbun, MD. Law and the Physician: A Practical Guide. Boston. Little, Brown and Company. (1993) 215-231.
If you have any questions with regard to the above or with respect to any other legal heath care issues, please feel free to FAX me your questions to the Law Office of Deborah A. Green, 16 Caren Court, Mt. Kisco, NY 10549, FAX No. 914-666-9266; Tel. No. 914-666-9264; or E-Mail me at dgreen3686@AOL.com. I will be answering those questions which are of interest to the broadest audience.
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