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OIG, in a Departure, Approves Hospital Provision of Nurse Practitioner Services

Traditionally, the Office of the Inspector General for the U.S. Department of Health and Human Services (“OIG”) would take a hard stance on any arrangements that might involve some form of remuneration from a hospital to a referring physician, but the winds of change may be blowing. In Advisory Opinion 22-20, published in December of 2022, the OIG has given a green light, albeit in a limited context, to an arrangement in which a hospital may have its employee nurse practitioners perform some services traditionally performed by the patients’ primary care physicians. This is a small step in the direction of a more flexible OIG stance on the federal Anti-Kickback Statute (“AKS”), but it doesn’t completely sidestep risks.

The new opinion was requested by an acute care hospital that uses its nurse practitioners (“NPs”) to handle certain tasks for patients of participating physicians when those patients are receiving inpatient care or under observation in two designated medical units. These NPs perform a range of tasks similar to those the participating physicians would have performed, such as:

  • Initiating plans of care through existing protocols;
  • Implementing any applicable care protocols instituted by the hospital;
  • Making rounds on assigned units;
  • Responding to laboratory or imaging studies;
  • Addressing rapid changes in patient condition;
  • Educating and supporting patients and families;
  • Coaching, educating, and otherwise supporting nurses on the unit;
  • Overseeing and supporting unit-based quality improvement projects; and
  • Discharge planning.

While the OIG noted that this system does implicate the AKS in that it is a form of remuneration that may influence referral decisions, the agency determined that the risk of fraud was low. To start, the services are limited to non-surgical, non-specialty units instead of the more specialized or surgical units where referrals would be more lucrative. There are also multiple safeguards that mitigate the risk of fraud. Finally, this arrangement is unlikely to increase costs to federal healthcare programs, as the hospital itself is not billing for the NPs’ services, and there are safeguards in place to ensure that the participating physicians aren’t also billing for the work performed by the NPs.

There is cause to be cautiously optimistic that the OIG may be loosening its grip on newer and novel forms of staffing arrangements. The implication is that these agreements may pass muster under the AKS provided that great care is taken, the potential benefit to quality care is high and the potential for fraud is low. On the other hand, it should be noted the analysis only involves the AKS and not the Stark Law, so there may still be outstanding issues with the structure of such agreements. It does appear, however, that the OIG is opening up its interpretation of staffing arrangements, and this is cause for at least muted celebration.

Lisa English Hinkle is a Member of McBrayer law. Ms. Hinkle chairs the healthcare law practice and is located in the firm’s Lexington office. Contact Ms. Hinkle at lhinkle@mcbrayerfirm.com or (859) 231-8780, ext. 1256.

Chris S

Christopher J. Shaughnessy is a member at McBrayer law. Mr. Shaughnessy concentrates his practice area in healthcare law and is located in the firm’s Lexington office.  He can be reached at cshaughnessy@mcbrayerfirm.com or at
(859) 231-8780, ext. 1251, or contact any of the attorneys at McBrayer.  

Services may be performed by others.

This article does not constitute legal advice.

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