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Captain of the Ship doctrine and NPs.

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cessnadriver cessnadriver (Member)

Hello all, I have been informed in another thread by a PA that NPs can now practice independently. As the thread was approved by a moderator I assume is an NP or CRNA, this appears to be the truth. My not knowing this caused me to make a misstatement about NPs.

My question is now that you can practice without a collaborative agreement, ie independently, how has this affected the price of you professional Liability Insurance. And will " Captain of the Ship" doctrine of legal defense still hold true for those of you not independent paractioners?

Thank you in advance for any replies and information.

traumaRUs, MSN, APRN, CNS

Specializes in Nephrology, Cardiology, ER, ICU. Has 27 years experience.

Independent APN (advanced practice nursing) is not available in every state. For instance, I live in IL and we have just pushed thru to our state legislature to get rid of collaborative agreements. That does indeed mean we can practice more independently. However, our independence is tempered by what the hospitals will allow us to do in regards to admitting pts.

So it is possible , in some states at least, to contract with a rural hospital to provide whatever the NP speciality is on a sole provider basis?

You could replace a physician in the ER if you were an ER NP, peds, FP etc? Condidering the static CRNAs get form anesthesiologists who would like to limit solo practice. How did you deal with opposition form the Subspecialty grous ie ER physicians, pediatricians etc.

Were there lawsuits involved, such as restraint of trade or how was this done? Has it affected salaries much. In the CRNA community a rural solo practitioner can expect to make approx 100% more than an urban counterpart.

Do you bill directly to insurance companies? Has Medicare approved payments?

Edited by cessnadriver
spelling and syntax

So it is possible , in some states at least, to contract with a rural hospital to provide whatever the NP speciality is on a sole provider basis?

You could replace a physician in the ER if you were an ER NP, peds, FP etc? Condidering the static CRNAs get form anesthesiologists who would like to limit solo practice. How did you deal with opposition form the Subspecialty grous ie ER physicians, pediatricians etc.

Were there lawsuits involved, such as restraint of trade or how was this done? Has it affected salaries much. In the CRNA community a rural solo practitioner can expect to make approx 100% more than an urban counterpart.

Do you bill directly to insurance companies? Has Medicare approved payments?

First you have to differentiate between independence and autonomy.

There are no independent PA practices. An NP can practice with no collaborative agreement for prescribing, diagnosis or treatment in these states (this may have changed I haven't updated it in about a year):

Alaska

Arizona

District of Columbia

Idaho

Iowa

Maine*

Montana

New Hampshire

New Mexico

Oregon

Washington

Wyoming

However, to bill Medicare or Medicaid you need a collaborating physician. In addition Medicare guidelines require a collaborating physician to see inpatients. So if you want to practice completely independently you cannot see Medicare or Medicaid patients

As far as specialty practice given today's liability I have a hard time seeing a hospital giving you privileges to practice independently in any hospital setting including an ER. There are numerous rural ERs that are staffed by PAs and NP with remote physician supervision on the other hand.

The term you are looking for is autonomy. Basically the ability to direct your own destiny. In most cases this is intertwined with the ability to own a practice. Both PAs and NPs own their own practice. The amount is roughly two percent of each profession. For the most part these tend to be in rural or urban underserved areas. They also tend to be pretty much confined to primary care (although aesthetics seems to be growing). The structure is usually the same although the mechanics are somewhat different.

Both PAs and NPs can bill Medicare. NPs can receive the money directly. For PAs the receipts must either go to the practice or the physician. Most PAs structure their practice as either a PC (if allowed) or LLC where the PA owns 99% (by Medicare rules the other 1% must be owned by someone else). The receipts are paid to the practice then the PA pays themselves out of the profits. Many NPs structure their practice this way for tax reasons. Most state regulations also prohibit the PA from directly employing the supervising physician. Instead they are employed by the LLC or PC which is legal. Once again in a number of states the NPs must structure their practices in the same way.

PAs and NPs can also contract directly with insurance companies. However, there is case law that shows that insurance companies do not have to contract with non-physicians (or particular physicians) if they do not want to. The only restraint of trade suit that I am aware of is here:

http://www.thefreelibrary.com/APRN+independent+practice+threatened.-a0176690680

There are also some in the CNM literature.

As far as salaries Advance shows NP owned practices are third in salaries but the difference between this and other practices is relatively small.

In short its possible to practice autonomously either within a physician practice or as an owner of a practice. Ownership of a business has substantial barriers that should not be underestimated.

David Carpenter, PA-C

Dr. Tammy, FNP/GNP-C

Specializes in ER; CCT.

However, our independence is tempered by what the hospitals will allow us to do in regards to admitting pts.

Just curious. If a hospital refuses admitting privileges in an independent state, would the APN have a legitimate claim related to restraint of trade lawsuit?

traumaRUs, MSN, APRN, CNS

Specializes in Nephrology, Cardiology, ER, ICU. Has 27 years experience.

Well I guess you could try it. The differences in credentialling at different hospitals impacts my practice immensely. For instance, I work at a small (100 bed) hospital in the ER. I am not allowed to see pts w/o a physician also seeing them. However, I am also credentialled at four other hospitals, where I see pts, order and interpret tests all w/o a physician seeing them!

My next question is about compensation. On every web site I can find, it appears the annual salary for an NP is between approx, 75K and 85K with 82K being the 75th percentile. Why so low? Are you billing directly ( For those of you in autonomous practice.) Or is the depressed income a result of overproduction of NPs? What mechanisms are in place to prevent over production. Do you comptete with PAs for positions?

With autonomy you would expect you salaries to be on a par with CRNAs. What are the reasons they are not?

Well I guess you could try it. The differences in credentialling at different hospitals impacts my practice immensely. For instance, I work at a small (100 bed) hospital in the ER. I am not allowed to see pts w/o a physician also seeing them. However, I am also credentialled at four other hospitals, where I see pts, order and interpret tests all w/o a physician seeing them!

I think that what the OP was asking was could an NP replace a physician specialist. Ie instead of the EM group, the hospital contracts or hires ENPs (whatever they are) to replace the physicians and run the ER independently. I don't know of any hospital that would do this. Same goes for an NP doing specialty work without a physician in a hospital.

David Carpenter, PA-C

My next question is about compensation. On every web site I can find, it appears the annual salary for an NP is between approx, 75K and 85K with 82K being the 75th percentile. Why so low? Are you billing directly ( For those of you in autonomous practice.) Or is the depressed income a result of overproduction of NPs? What mechanisms are in place to prevent over production. Do you comptete with PAs for positions?

With autonomy you would expect you salaries to be on a par with CRNAs. What are the reasons they are not?

I'll let the NPs address the rest, but you should realize that CRNA reimbursement is completely different from other APN reimbursement. CRNAs are reimbursed at 100% of the physician rate. In addition they are eligible for Medicare pass through for rural hospitals. Anesthesia is a low overhead procedure rich specialty. The opposite of primary care (where most autonomous NPs practice). Finally a hospital that does surgery or deliveries must have some type of anesthesia to stay open. The procedure rich nature allows CRNAs in non-rural practices to make more on average than NPs. The pass through and regional need for rural PAs is why you see especially big bucks there. None of these factors applies to NPs.

David Carpenter, PA-C

I understand reimbursment for CRNAs as I have been a CRNA for many years. My question is now.. WHY are not NPs reimbursed 100% of the physician rate ?.. Are PAs? If not, why not? are not all APNs equal?

I was informed in this forum that NPs could practice autonomously. If they can do this I would expect reimbursment to be done on exactly the same model as that used for CRNAs.

I understand reimbursment for CRNAs as I have been a CRNA for many years. My question is now.. WHY are not NPs reimbursed 100% of the physician rate ?.. Are PAs? If not, why not? are not all APNs equal?

I was informed in this forum that NPs could practice autonomously. If they can do this I would expect reimbursment to be done on exactly the same model as that used for CRNAs.

Both PAs and NPs are reimbursed the same. When I speak about reimbursement I am talking for the most part about Medicare reimbursement. For private payors most reimburse at 100% of the physician rate when billed under the physician. NP and PA owned practices must contract seperately with each private payor and in many states there is no requirement to contract with a given provider or pay all providers equally.

For Medicare the payment system evolved over the years as Medicare evolved. PAs and NPs were included in the original Medicare payment legislation but mostly in terms of rural services. Into the 90's the system evolved such that PAs and NPs were paid between 65% and 85% for services in rural areas, nursing homes, and surgical assisting. They were also reimbursed 100% for providing incident to services in all areas. The balanced budget act of 1997 equalized the rules across all environments. It provided for reimbursement at 85% for all services and 100% for incident to services. It also allowed NPs to directly bill Medicare.

The reason for the 85% rate is a little harder to tease out. In one sense it was the rate that existed before the BBA 1997. There were proposals to increase the rate to 97% of the physician rate during the hearings for the bill. Given that Medicare reimbursement is a zero sum game, that idea had little traction. The reasons for the 85% are somewhat lost to history. On of the reasons that I have heard is that during the 70's and 80's as Medicare payment expanded PAs and NPs were being touted as a lower cost alternative to the physician. This led to the deduction.

The explanation that appears to be supported by the Congressional record is a little more complicated. Physician compensation is based on Relative Value Units (RVUs). An RVU is composed of three components

1. Physician work component which measures time skill and intensity associated with the service provided.

2. Practice expenses which measure such things as office rents and employee wages.

3. Malpractice expenses.

There are references to the NPPs in the record in regard to RVUs and that the discount was arrived by evaluating these three items which arrived at a RVU of 85% for the NPP.

NPs and PAs that own their own practice make similar money to physicians in the same area. The difficulties they face relate mostly to contracting with private payors.

CRNA salaries are largely the result of the profession being able to leverage TEFRA billing into direct billing by CRNAs. In addition the billing formula used for anesthesia has significant discordances over the the RVU system used by the rest of medicine.

David Carpenter, PA-C

I'm a psych NP and reside in an independent practice state. I practice completely autonomously in both my private practice and at a local psych hospital where I work 2 days/week and occasional weekends. I function in essentially the same capacity as a psychiatrist.

I am also a clinical psychologist and can bill both Medicare and Medicaid independently for my services. I don't know if this is possible because I am also a psychologist and I have never inquired with CMS about this, but reimbursement has never been an issue. My Medicare/Medicaid billings are minimal, however, as most of my patients are self-pay in my private practice. I don't know exactly how the hospital reimbursement works, and it is possible that the hospital bills under an MD for my services - I have not inquired about this. They pay me hourly and that is all I typically pay attention to. But, no MD reviews, co-signs, or is otherwise involved with my charts or patient care.

As far as malpractice insurance rates, they do not rise based on your level of autonomy or expanded scope of practice. Rates are based on actuarial data, meaning that malpractice rates will only increase if the rate at which a provider is sued increases. In fact, my malpractice rates as a psych NP are lower than my malpractice rates as a psychologist.

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