On December 19, 2022, OIG posted Advisory Opinion 22-20, responding to a request submitted by an acute care hospital (the Hospital) regarding the utilization of its employed nurse practitioners (NPs) to perform services that traditionally have been performed by the patient’s attending physician in two general care units (the Units) of one of its hospital campuses. Although OIG considered the use of the Hospital’s NPs to take on duties for which the physicians would otherwise be responsible to be “remuneration” to those physicians within the meaning of the Anti-Kickback Statute (AKS), OIG ultimately determined the arrangement presented minimal risk of fraud and abuse. Citing several factors that mitigated the risk of abuse in the arrangement, OIG determined that it would not impose administrative sanctions in connection with the AKS or the Civil Monetary Penalty (CMP) Law.

The Arrangement

Physicians who choose to participate in the arrangement may have Hospital-employed NPs render certain care to their patients who are inpatients or in observation status in the Units. OIG cited the following examples of such care, some of which the physicians would otherwise perform:

• promptly initiating plans of care through existing protocols;
• implementing any applicable care protocols instituted by the Hospital (e.g., stroke or community-acquired pneumonia protocols);
• making rounds on assigned units, during which the NPs address concerns of patients, their families, nurses, and other clinicians;
• responding to laboratory or imaging studies, including arranging prompt follow-up testing and attending to abnormal results as needed;
• addressing rapid changes in patient condition, including adjusting care plans and ordering diagnostic tools or interventions in real time;
• educating and supporting patients and families;
• coaching, educating, and otherwise supporting nurses on the unit, including providing certified continuing education;
• overseeing and supporting unit-based quality improvement projects; and
• discharge planning, which at times includes obtaining insurance authorizations for post-acute care and scheduling follow-up testing and appointments.

The Hospital still requires physicians participating in the arrangement to round daily, communicate and collaborate with NPs in rendering care to their patients, and maintain the same accountability for patient care that non-participating physicians do. Per the Hospital, patients in the Units are undergoing active evaluation to determine the cause and extent of their illnesses, which often requires ongoing attention throughout the day and real-time responses to changes in their condition. According to OIG, the Hospital’s experience shows that providing readily available NPs allows for improvements in patient care, with greater efficiency in diagnosis and treatment.

With respect to the process for physicians to participate in this arrangement, the Hospital noted that it sends an annual offer letter describing the arrangement to all physicians with privileges to the Hospital who regularly admit patients to the Units, including physicians employed by Hospital affiliates and physicians in independent practices. The Hospital certified that when offering this arrangement, it does not consider a physician’s volume or value of expected or past referrals. OIG states that there are no ancillary agreements with participating physicians that would induce or reward referrals, and compensation paid to participating physicians outside of the arrangement does not account for any services performed by NPs under the arrangement. Participating physicians are not allowed to bill for the services rendered by NPs, nor rely on the NPs’ documentation in billing for their own services. In addition, the Hospital does not bill payors separately for the NPs’ services.

OIG Determination

OIG advises that the proposal would implicate the AKS due to the remunerative value of NPs providing services to participating physicians’ patients, especially in the Medicare context where physicians are reimbursed for one daily evaluation and management service regardless of the number of visits the physician actually performs in a day. Such renumeration could induce referrals from participating physicians, according to OIG. However, OIG has determined that because the proposed arrangement presents a minimal risk of fraud and abuse under the AKS, OIG will exercise its discretion and not impose sanctions under the AKS. OIG identifies several factors supporting this decision:

1. The arrangement is restricted to two non-surgical, general care units at one of the Hospital’s campuses. Because the Units are geared towards primary care, the potential referrals are not as profitable to the Hospital as they would be if the Units were surgical units or specialized in nature. OIG noted that it would view the arrangement differently if the Units were specialized or otherwise presented more lucrative opportunities to the Hospital.
2. Importantly, the Hospital certified that the compensation it pays to participating physicians outside of this arrangement does not account for any services performed by NPs under the arrangement, nor does the Hospital consider a physician’s volume or value of expected or past referrals when offering the arrangement.
3. Safeguards are in place that lower the potential for fraud or abuse under the AKS. For instance, the Hospital still requires participating physicians to round daily, communicate and collaborate with NPs in rendering care to their patients, and maintain accountability for patient care. The Hospital makes no payments to physicians under the arrangement and there are no ancillary agreements with participating physicians that would induce or reward referrals. Participating physicians are not allowed to bill for the services rendered by NPs, nor rely on the NPs’ documentation in billing for their services. OIG distinguishes these facts about the arrangements from “suspect arrangements where, for example, hospitals permit their employed NPs to provide services to physicians’ patients at no cost to the physicians, and the physicians then bill payors, including Federal health care programs, for the services performed by these NPs.”
4. OIG found that services rendered by NPs in this arrangement appear reasonably designed to improve patient care by making diagnosis and treatment more efficient. In addition, the risk of inappropriately increased costs to Federal health care programs is mitigated since the Hospital does not bill for the services of the NPs.

The Advisory Opinion includes the customary note that it may not be relied upon by anyone other than the requestor Hospital. A copy of Advisory Opinion 22-20 is available here.