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Chapter 5 Billing and Business Practices


Partnerships With Non-Physician Healthcare Practitioners (HP)
Corporations Which Include Non-Physician Shareholders and/or Employees
Physician Billing for the Services of Another Healthcare Practitioner


Billing Medicare for Non-Physician Healthcare Practitioner Services
“Incident to” Type of Services
Billing for the Non-Employee
Billing Services Provided by a Physician Assistant
Billing by Other Healthcare Professionals
Determining How to Bill Medicare for the HP’s Services


Health Insurers
Health Care Services Plans


Ethical Problems With Associations Between Healthcare Professionals



Partnerships with non-physician healthcare practitioners (HP).

Nevada law prohibits organizations, corporations, or non-physicians from practicing medicine. AGO 219 (Oct. 3, 1977). This prohibition acts to prevent non-physician control or ownership of medical practices. Further, the law provides that the professional organization may only provide medical services through its members and employees, all of whom must be licensed to provide the medical service. NRS 89.050(2)(b). This will prevent non-physician healthcare practitioners from entering into even limited partnerships with a physician under the theory that such a partnership may compromise the medical judgment of the physician partner.

Corporations Which Include Non-Physician Shareholders and/or Employees.

Under Nevada law, no corporation may legally engage in the practice of medicine. AGO 219 (Oct. 3, 1977). However, physicians may practice medicine in corporate form if they choose to incorporate for such purpose. Such a corporation may manage additional professional corporations which are organized to render other types of professional services. Additionally, the physician corporation may contract with or hire other healthcare providers as necessary to provide care to its patients, with the requirement that any hired healthcare provider is practicing within the scope of his practice. NRS 89.020 (5).

Physician Billing for the Services of Another Healthcare Practitioner

The ability to bill for the services of another healthcare practitioner depends on a number of factors. These include the relationship between the physician and the other practitioner, the scope of the healthcare practitioners practice, and the contractual limitations imposed by the third-party payor. Generally, if the healthcare practitioner is an employee and the services provided are considered incident to a physicians service, the services may be billed by the physician. If the practitioner is one who normally provides independent service, the billing must occur in the name of that physician. Another physician billing for such a practitioners services runs the risk of being charged with submitting a false claim. Recent cases in other states have highlighted the need to abide by third-party billing requirements for services provided by non-physician healthcare practitioners. In addition to meeting the requirements of the individual payor, the physician who is overseeing various healthcare practitioners must ensure that each is providing care which is within the scope of his own license and each is properly supervised while doing so. Failure to provide this supervision can result in charges of unprofessional conduct or fraud.


Medicare requires that services provided by non-physician healthcare providers be performed under the physicians immediate personal supervision. The Medicare administration interprets this language literally and requires that dependent practitioners be monitored as required by state licensure and only provide services which are strictly within their scope of practice. Additionally, federal law makes it illegal to cause or make false statements or misrepresentations of material fact in any claim for Medicare benefits. 42 U.S.C. 1320a-7b (a)(1). This law specifically prohibits billing for services not actually performed by the billing physician. Due to this law, it is generally not possible to bill for services performed by a non-physician healthcare professional outside of the physicians office.

Billing Medicare for Non-Physician Healthcare Practitioner Services.

Medicare does allow physicians to bill for some services provided by an non-physician healthcare practitioner (HP). Depending on which profession is involved, the physician may be able to bill for the services under the incident to rules, by reassignment for healthcare practitioners who are authorized to bill Medicare directly, or for physician assistants as provided by Nevada law. The entire Medicare Carriers Manual may be found on the internet at:

Incident to Type of Services.

Medicare Part B does cover services which are incidental to the physicians normal services. These services tend to be ancillary to the physicians office practice and are normally provided without a separate charge. 42 C.F.R. 410.26. These ancillary services include those which are provided by an HP employed and supervised by the billing physician. Examples of these HP employees are nurses, psychologists, technicians, therapists, and aides. If billable, these services are billed to Medicare as though the physician provided them. There are a number of qualifications necessary to bill a service as incident to:

1)         The service must be provided under direct supervision of the billing physician. This does not require the physician to be in the same room with the HP, but Medicare does require the physician to be in the building or on the premises where the service is being provided. Also, the physician must be available to assist or consult with the HP at the time the service is being done.

2)         The physician must perform the initial service and additional services frequently enough to show that the physician is actively participating in the management of the patients treatment. This precludes the physician from delegating the entire course of treatment to an employee, and from billing as though he were an active participant.

The services must be the type of services normally provided in a physicians office or in a clinic.

4)         The services must be provided by employees of the physician generally defined as employed on a W-2 tax basis.

Medicare Carriers Manual 2050-2050.4.

Billing for the Non-Employee

Recently, Medicare has revised the Medicare Carriers Manual to allow for billing for care provided Incident to Non-Physician Employee. This new rule applies to part-time, full time or leased employees of the supervising physician or physician group. The qualifications for this non-physician leased employee incident to services are:

  • 3) There must be a written employee lease agreement which:
  1. provides that the non-physician employee is employed by a leasing company, but is providing service as an employee of the billing physician;
  2. declares that the billing physician can exercise control and supervision to the leased employee;
  3. gives the billing physician the right to fire or replace the leased employee;

differentiates the non-physician from a leased contractor.

  • 4) The non-physician provides services under this agreement as the employee of the physician;
  • 5) The physician provides the same supervision as he/she would if the leased employee were directly employed.

Failure to meet any of these requirements will result in a denial of payment and renders the incident to bill a false claim. Medicare considers such deficient claims to be fraud and may investigate and prosecute the offending physician.

Billing Services Provided by a Physician Assistant.

Medicare will not allow a Physician Assistant (PA) to bill directly for care provided. Medicare will reimburse the billing physician for PA services if certain conditions are met. These are:

1)         the type of service would be considered physician services if a physician had provided them;

  • 6) the services are provided under the supervision of a physician;

3)         the services are not being billed by another facility or physician;

  • 7) the services are within the State recognized scope of practice for the PA.

42 U.S.C. 1395x(s)(2)(K).

Since the PA may not bill Medicare directly for services rendered, the payment can only be made on an assignment basis and may only be made to the employing physician. The PA is required to have an employment relationship with the billing physician although this may include status as an independent contractor. According to the federal statutes, Nevada law dictates the relationship between the physician and the PA. 42 U.S.C. 1395u(b)(6). There is no longer an onsite requirement for physician assistants (or nurse practitioners and clinical nurse specialists). This permits greater latitude in the employment of these HPs.

Billing by Other Healthcare Professionals.

Healthcare practitioners who are allowed, by statute, to provide care independently of a supervising physician may opt to bill Medicare directly. Independent healthcare providers have their own billing numbers which are used to receive payment for services on a reassignment basis.

Additionally, there are some types of healthcare practitioners, such as nurse practitioners or clinical nurse specialists, who do not operate completely independently of physicians but are still allowed to receive direct payment from Medicare. Despite the collaborative effort, these HPs are authorized to receive direct payment if the services provided were within their scope of practice. 42 U.S.C. 1395.(s)(2)(K)ii. Medicare requires such nurse practitioner or clinical nurse specialist to possess a Masters degree in nursing and be certified by the American Nurses Credentialing Center, or another recognized national certifying body with established standards. 42 C.F.R. 410.75, 410.76. Again, the service must be one which would be considered physician services and must not be billed by another physician or facility. In addition, certified nurse midwives and certified registered nurse anesthetists are allowed to bill Medicare directly . 42 U.S.C. 1395x(s)(L); 1395x(s)(11).

Physical and occupational therapists who are independent practitioners may also bill Medicare directly for their services. However, there are a number of requirements that the therapist must meet to qualify for direct payment. One of the primary requirements is that the therapist must provide services that are free of control by another professional or employer. Certain psychologists and clinical social workers (as defined by 42 U.S.C. 1395x(hh)) are also allowed to receive direct payment. Payment to these practitioners can only be made on an assignment related basis. 42 U.S.C. 1395l(a)(1).

Determining How to Bill Medicare for the HPs Services.

Medicare pays 100% for services billed as incident to physicians services but only 85% of services performed by a PA, nurse practitioner, or clinical nurse specialist. 42 C.F.R.1395l(a)(1). The physician must consider whether the HP is an employee or an independent practitioner, and if the physician is always available and in geographic proximity to the HP. If the physician is available, he may bill services as incident to unless the HP is an independent contractor.


Health Insurers

Whether the HP may directly bill private insurance depends, in part, on what type of service is provided and which insurance is being billed. If the HP is totally independent from the physician, such as a physical therapist with his own office, and the physician includes the service in the physicians bill, a court may determine that the physicians bill is fraudulent. Also, if the physician agrees to provide some form of reimbursement to the HP, there is the risk that the agreement violates state or federal anti-kickback law.

There is no specific statutory language which requires insurers to allow the HP to directly bill for services rendered. There is a statute which requires the insurer to reimburse the insured for services provided by registered nurses authorized by statute to provide emergency or other special conditions as prescribed by the state board of nursing, and which would be reimbursed if provided by another provider of health care. NRS 689.0495. But this statute appears to allow the insured to collect reimbursement rather than allow the nurse to bill the insurer directly.

Health Care Services Plans

Physicians or medical partnerships that have contracted with health care services plans may contract with other healthcare providers such as dentists, nurses, podiatrists, optometrists, and other professionals within the healthcare industry, who are licensed within their fields of practice. If such contracts allow direct billing by the non-physician providers, there is nothing in the Nevada codes which prohibits this billing.


Federal law forbids compensation for the referral of patients by any healthcare provider. Additionally, federal law limits the ability of a physician to refer patients to non-physician providers in whom the physician has a financial interest. 42 U.S.C. 1320a-7(b). For further information, refer to the chapter on Kickbacks and Fee-Splitting in this text.


Ethical problems with associations between healthcare professionals

In general, there are no ethical prohibitions for physicians entering into a legally accepted business relationship with another healthcare professional. The AMAs Principles of Medical Ethics present the physician with some issues which should be considered.

A physician shall continue to study, apply and advance scientific knowledge, make relevant information available to patients, colleagues, and the public, obtain consultation, and use the talents of other health professionals when indicated.

A physician shall, in the provision of appropriate patient care, except in emergencies, be free to choose whom to serve, with whom to associate, and the environment in which to provide medical services.

The AMAs Current Opinions of the Council on Ethical and Judicial Affairs offers more specific guidance to the physician. Opinion 3.01 states:

It is unethical to engage in or to aid and abet in treatment which has no scientific basis and is dangerous, is calculated to deceive the patient by giving false hope, or which may cause the patient to delay in seeking proper care.

Physicians should also be mindful of state laws which prohibit a physician from aiding and abetting an unlicensed person in the practice of medicine, aiding or abetting a person with a limited license in providing services beyond the scope of his or her license, or undertaking the joint medical treatment of patients under the foregoing circumstances.

Physicians are otherwise free to accept or decline to serve anyone who seeks their services, regardless of who has recommended that the individual see the physician.

Opinion 3.03 further states:

Physicians often practice in concert with allied health professionals such as, but not limited to, optometrists, nurse anesthetists, nurse midwives, and physician assistants in the course of delivering appropriate medical care to their patients. In doing so, physicians should be guided by the following principles:

  • It is ethical for a physician to work in consultation with or employ allied health professionals, as long as they are appropriately trained and duly licensed to perform the activities being requested.
  • Physicians have an ethical obligation to the patients for whom they are responsible to insure that medical and surgical conditions are appropriately evaluated and treated.
  • Physicians may teach in recognized schools for the allied health professionals for the purpose of improving the quality of their education. The scope of teaching may embrace subjects that are within the legitimate scope of the allied health profession and which are designed to prepare students to engage in the practice of the profession within the limits prescribed by law.
  • It is inappropriate to substitute the services of an allied health professional for those of a physician when the allied health professional is not appropriately trained and duly licensed to provide the medical services being requested.

Additional opinions regarding the relationship with nurses and chiropractors are available in Opinions No. 3.02 and 3.041. The full text of relevant Nevada Attorney General Opinions are available through: