The Generous Reimbursement of Non-Physician Clinical Services

Further, substantial reforms to nurse practitioner education that would mimic those that followed the Flexner Report for medical education are indicated.

Introduction

This is the second Perspective of a two-art series discussing the topic of reimbursements provided to non-physicians for the clinical services they furnish. The March/April 2024 edition of Missouri Medicine led with compelling evidence that non-physician led care is less safe and more costly than physician-led care. What followed was an overview of the white paper from the Robert Wood Johnson Foundation that underlies and explains non-physicians’ seeking of scope creep, an overview of what Full Practice Authority (FPA) is, where FPA has been granted to Advanced Nurse Practitioners (ANPs), general factors that influence payment for medical services rendered under the Resource-Based Relative Value Scale (RBRVS), and what is necessary to enable a physician to legally bill under their name when providing care in conjunction with a non-physician, such as an ANP or a Physician Assistant (PA).

Having established these basic points, this Missouri Medicine Perspective commentary covers why pay parity with physicians for non-physician-directed care would not be consistent with Medicare law, why current Medicare payments to non-physicians are excessive (they do not conform with RBRVS methodology), a numeric suggestion for a payment range that would be justified for reimbursement to non-physicians in a manner consistent with the RBRVS, and why pervasive current deficits in ANPs’ clinical training should inform advocacy for meaningful reform of ANPs’ educational processes. Many ANP programs retain an apprenticeship model for student’s supervised clinical rotations. Apprenticeships were eradicated from medical education after the Flexner report of 1910.

85% of Physician Reimbursement Rate Granted by Medicare for Care Delivery by ANPs and PAs Is Not Grounded in RBRVS

When medical care is billed by a non-physician, that care is typically reimbursed at 85% of the physician’s rate.¹ This 85% figure appears to be an arbitrary percentage. No mathematical rationale explaining this 85% figure appears to exist in any publication discussing reimbursement for care, when delivered by non-physicians. Further, no evidence exists that this 85% figure is at all grounded in RBRVS methodology.

How Can One Assert that the 85% Figure Is Not Grounded in RBRVS Methodology and Is Excessive?

The formula that governs the calculation of the Relative Value Units (RVU) that corresponds to the Resource-Based Relative Value (RBRV) for any medical service or procedure under the RBRVS is:²

• RBRV = (TW) * (1+RPC)*(1+AST)

Above, RBRV represents Resource-Based Relative Value, also known as Relative Value Units (RVU). TW represents Total Work by the clinician, a figure which factors a physician’s time and the complexity of the service provided. RPC represents the Relative Specialty Practice Costs. Finally, and importantly, AST represents the Amortized Value of Specialty Training, the opportunity costs expended by the clinician to obtain the necessary specialized training.

Proof that non-physicians are not reimbursed in a manner consistent with RBRVS methodology lies in an understanding of the AST term. The value of the opportunity cost or AST for physicians far exceeds the AST for ANPs and PAs, because AST captures the amount of time needed to prepare to be able to provide any given service. A physician’s training is obtained not only at much greater depth, but more importantly, over a much greater length of time than is the case for any ANP or PA. Thus, the current 85% figure for reimbursement is excessive, because no ANP or PA spends 85% of the amount of time a physician spends to complete their training.

If 85% Is an Inappropriate Figure, What Could Be Appropriate?

Consider that after completing high school, all physicians have first completed an undergraduate degree, and then completed four years of medical school, and at least three years of residency training. This typically requires at least 11 years. (Graduates of programs such as the University of Missouri-Kansas City’s combined BS-MD six-year program represent the relatively few exceptions to this 11-year figure, but their more rapid training is uniquely enabled by not having summer sessions free of academic responsibilities while pursuing the Bachelor’s degree.)

In contrast, an ANP who has completed high school and obtained a Bachelor of Science degree in nursing will have completed four years of nursing training and an additional two to four years of graduate education.³ However, an ANP need not have obtained an undergraduate degree before matriculation to nursing school. In some cases, a future nurse will have directly entered nursing school after high school. In these cases, they are typically promoted to the final two years of training only if they achieve a sufficient grade point average during the two pre-clinical years of their training.⁴ Other nurses complete some of their necessary prerequisite courses at a university before becoming eligible for admission to nursing school, and some complete an undergraduate degree. However, to be degreed is not a requirement. Further, after completing ANP training, no ANP residency training programs exist. Thus, an ANP generally spends six to eight years after completing high school directly preparing for their clinical role.³

A PA must have completed an undergraduate degree, followed by PA training, which generally requires two years.⁵ In some cases, a PA will subsequently complete a 12 to 18-month residency program. Thus, a PA typically commits between six and seven and a half years after completing high school directly preparing for their clinical role.

Perhaps too complex to introduce into calculations is the fact that medical school classes teach their students the pre-clinical and clinical sciences at a greater depth, and over a longer total of class contact hours per month or year, than characterizes ANP and PA programs.

Thus, upon close examination of the RBRVS formula, while considering the necessary preparation times for physicians versus non-physicians, it becomes clear why and how the 85% figure utilized by the Medicare program (and also by most commercial insurers) is not only completely arbitrary, but also unjustifiably generous.

When quantified strictly by years, and without also adding allowance for the fact that physicians undergo both more hours per year of coursework, and more intense coursework, the length of time for the training of an ANP or PA falls far short of any physician’s. ANPs’ and PAs’ direct preparation periods of six years or seven and a half years or eight years, as detailed above, does not approach 85% of the 11-year minimum length of time spent in training by physicians who have completed a residency.

Further, many physicians obtain specialty training that adds to the 11-year figure. To credit all non-physicians who bill Medicare or commercial insurers with six years to obtain training would suggest that their reimbursement should be made at no greater than 6/11, or 54.5%, of the physician rate. Seven years would correspond to 63.6%, and eight years would correspond to 72.7%.

The inescapable conclusion is that current reimbursement rates for ANP-directed and PA-directed care are currently completely arbitrary and overly generous. The 85% figure is not compliant with RBRVS methodology, which is embedded within federal law. Thus, physicians can argue that ANP and PA care is reimbursed at an overly generous rate, without provoking fears of anti-trust litigation for engaging in such advocacy, because that advocacy would be grounded directly within RBRVS methodology.

Other Factors that Influence RVUs

For completeness, other factors also are considered before fully converting an RVU value to a clinical reimbursement. The reimbursement for any service is governed by this equation:²

• Reimbursement amount (in US$) = [(RVU_W*GP CI_W)+(RVU_PE*GPCI_PE)+(RVU_MP*GPCI_MP)*CF

RVU_W is the RVU for the work provided, as per Hsaio et al.² This value may or may not be further modified by the Relative Value Scale Update Committee (RUC) of the American Medical Association. The RUC is an expert panel of physicians that makes recommendations to the federal government regarding the resources required to provide a medical service.⁶

In the formula, GPCI_W is the Geographic Practice Cost Index for the physician’s work.^2,7 The GPCI_W varies by location. For instance, the GPCI_W for my friend, a transplant surgeon in Bronx, NY, is 1.056. The GPCI_W for St. Louis, MO is 1.000.

RVU_PE is the RVU for practice expense. A standard and unique value for RVU_PE exists for every specialty.

GPCI_PE is the Location-Adjusted Cost Index.^2,7 The GPCI_PE for my friend in Bronx, NY, is 1.212. The GPCI_PE for me in St. Louis, MO is 0.964.

RVU_MP is the local adjustment for malpractice coverage expense in that clinician’s specialty.² For example, Obstetrics/Gynecology has higher RVU_MP than Family Medicine. Non-physicians’ malpractice coverage expense is a wild card, because some states’ nursing practice acts preclude nurses from making a medical diagnosis. In such cases, the ability of plaintiffs to recover from these non-physicians if they commit alleged malpractice is constrained, when compared to physician-led care.

GPCI_MP is related to the location of practice.^2,7 For example, malpractice coverage generally costs more in Florida than in Missouri.

CF ($$ per net RVU) is the Conversion Factor which multiplies the other term to yield a dollar figure.²

When a side-by-side comparison is made between physicians and non-physicians working at a common location, their GPCI_W and GPCI_PE should not substantively differ, so these terms will not be further discussed. They were introduced for the sake of completeness. However, the GPCI_MP for any non-physician will not exceed the value assigned for a physician.

The logical consequence of consideration of the factors that help derive an RBRVS-based RVU value is this: If proper and consistent application of the RBRVS formula were applied for non-physician directed care, the result would be an even more markedly decreased reimbursement for that non-physician led care. The chief reasons lie chiefly in the lower amount of time non-physicians invest in their training, which would lead to a much lower value for AST for non-physicians. As noted above, AST is the amortized value of opportunity costs encountered to obtaining the necessary specialized training. AST for a non-physician, be they a PA or an ANP, is much less than 85% of the corresponding value for a physician.

Another influence that could drive down non-physician reimbursement rates is the GPCI_MP, as noted.

This is quite the opposite of the reimbursement parity being sought by non-physicians, who demonstrate by their advocacy a convenient and self-serving ignorance of the legal underpinning of Medicare reimbursement methodology.^8–10

Principal Conclusions: Reimbursement-Related Matters

First, ANPs and PAs who seek reimbursement parity with physicians, when billing directly for their services provided without physician supervision, overlook that their training is less extensive than physicians’ training. A methodologically-consistent RBRVS-derived reimbursement rate for non-physician led care that comports with applicable law would be markedly lower than 85% of that enjoyed by physicians, because of the influences that AST and GPCI_MP would provide. These influences are detailed above. Therefore, to remain compliant with the RBRVS formula, the Medicare program should revise downward the reimbursement rates of any current or future ANPs, and any future PAs, who are providing medical care not directly supervised by a physician who provides a substantive portion of the medical service. Such a revision could yield significant financial savings to our nation’s financially-stressed Medicare system.

Another salutatory effect would accrue to physicians. To decrease ANP and PA reimbursement rates to comport with RBRVS methodology would favor the hiring of more physicians and less non-physicians as employees of insurers or health care systems, because health care systems would recover even less revenue from the care provided independently by the non-physician clinicians that they now employ. As established in Part I of this series, it is only when physicians provide a substantive portion of the medical service that reimbursement for care partly provided by non-physicians can legally be reimbursed at 100% of the physician rate.

Principal Conclusions: Safety and Efficacy Matters

Given the data from the Hattiesburg study¹¹ and the VA study,¹² both of which indicate that non-physicians provide less efficient care, and given AMA data that most patients prefer that their care team be led by a physician,¹³ more effective and efficient care would ensue, with less specialty consults and less emergency department referrals. Indeed, the Hattiesburg study¹¹ and the VA study¹² support the assertion that the most avoidably expensive instrument in the hospital or clinician’s office isn’t a computer or a piece of medical hardware. It’s the finger of the non-physician, which uses an Electronic Health Record to select more expensive diagnostic and treatment options than physicians would typically choose to complete their patient’s work-up and care.

Further, non-physician practitioners are much more likely to prescribe opiate medications to patients than are physicians.¹⁴ The importance of this should be clear to anyone familiar with the number of opioid-related deaths that have been occurring in the United States.

A New Opening for Physician Advocacy

For organized medicine to advocate for downward revision of the 85% multiplier for independently-provided ANP and/or PA care to a lesser figure, in a manner consistent with RBRVS methodology, would also insulate physicians and physician organizations from needless anti-trust concerns, because physician advocacy on this matter would be grounded precisely in RBRVS methodology, which has been adopted by law for the Medicare program.

ANP Education Must Be Improved to Fulfill the Vision of the 2011 RWJF Statement

No examination of issues related to non-physician led care would be complete without re-examination of one of the four key points of the 2011 RWJF report that spurred the proliferation of ANP programs.¹⁵ That report advocated that: “Nurses should achieve higher levels of education and training through an improved education system that promotes seamless academic progression.” Unfortunately, such long-overdue improvements in ANP’s educational systems have not yet happened.

Many ANP programs deserve a special degree of scorn that is not merited for MD, DO or PA training programs, for several reasons.

At least twenty ANP programs exist that have accepted 100% of their applicants who meet their admissions criteria in recent years.¹⁶ One of these is the Western Governors University-Missouri, which maintains an affiliation with the State of Missouri.¹⁷ Such acceptance rates would be unthinkable for PA, MD or DO training programs.

Many ANPs have received degrees after being required themselves to arrange their own for their clinical rotation, their capstone experience. Whether a student needs to find their own site and preceptor depends upon the school. Some schools arrange one’s clinical rotations, but many others rely fully upon students to find their capstone clinical sites.¹⁸ This obligation would be unthinkable for PA, MD, or DO training programs. Further, the preceptor evaluation of that capstone clinical rotation is often been provided by a person who is not a faculty member of the degree-granting institution.¹⁸ An on-line resource suggests: “If you are responsible for finding your own clinical site, you should be looking for your preceptors as soon as possible.”¹⁸ This type of slipshod academic oversight would be unthinkable for PA, MD, or DO training programs.

Yet, further criticism is appropriate. An ANP’s capstone rotation occurs all too often, at sites such as private physicians’ offices, sites that have seldom been visited by a member of the institution’s faculty, to evaluate each site’s fitness for clinical training. This demonstrates a lack of appropriate educational oversight on the part of the degree-granting institution. This would also be unthinkable for PA, MD, or DO training programs.

The inescapable conclusion is that by flouting typical university standards for their degree-granting schools and programs, the ANP community invites disrespect for their educational processes.

Key Take-Away Messages

1. When judged against would be the case if proper and consistent application of RBRVS methodology were applied, Medicare and commercial insurers have long been and continue to be paying too much for clinical care provided independently by non-physicians. The conclusions of this article should be leveraged via physician advocacy toward downward revision of ANP and PA reimbursement rates, via employing an RBRVS-concordant reimbursement methodology for non-physician-led care.

2. PA training is closely regulated and appropriately supervised. However, ANPs clinical preparation is often woefully deficient, as is detailed above. Such lack of proper institutional oversight should be troubling to all who obtain care from an independently-practicing ANP, and all who advocate for the scope creep sought by many PAs and ANPs.

3. It is an unassailable fact that ANP training has not yet benefitted from the type of useful reforms visited upon medical school training by the Flexner report, released more than a century ago in 1910.¹⁹ In contrast, these deficiencies do not occur in PA training programs. The ANP community has bumbled along with little if any evidence that they plan to remediate their educational system’s numerous deficiencies, while focusing their efforts upon seeking to gain unjustified pay parity with physicians.^8–10 In that regard, the ANP community is falling far short of the educational reforms envisioned within the 2011 RWJF report.¹⁵

4. Indeed, many of the current deficiencies in ANP training programs arguably represent a form of academic fraud, which should never be allowed by any institution of higher learning, and should invite sanctions from accrediting bodies. Universities that host programs which require their ANP students to secure their own clinical rotation site and/or clinical preceptor would be well-served to have their university’s board of trustees investigate why such an embarrassing lack of academic oversight is occurring within their institutions. Could you imagine any other department within an accredited state university sanctioning such management?

5. The time has long passed for ANP programs to discard their apprenticeship clinical educational model, and focus upon Flexnerian-type educational reforms. Once they accomplish this, the next indicated step would be to establish residency programs to remediate the huge clinical training gap that currently exists between ANPs and physicians. Until then, any discussion of proposed pay parity between physicians and non-physicians remain based solely upon opinions that can be exploded by the numerous facts discussed in this manuscript.