PPE 75-1

NURSE PRACTITIONER’S

BUSINESS
PRACTICE AND
LEGAL GUIDE

Sixth Ec!ition

CAROLYN BUPPERT

NURSE PRACTITIONER’S
BUSINESS PRACTICE
AND LEGAL GUIDE
Sixth Edition

Carolyn Buppert, JD, MSN
Attorney Boulder, Colorado

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Library of Congress Cataloging-in-Publication
Data
Names: Buppert, Carolyn, author.
Title: Nurse practitioner’s business practice and
legal guide / Carolyn Buppert.

Description: Sixth edition. | Burlington,
Massachusetts : Jones & Bartlett Learning, [2018] |
Includes bibliographical references and index.
Identifiers: LCCN 2016047295 | ISBN
9781284117165 (hardcover)
Subjects: | MESH: Nurse Practitioners–legislation &
jurisprudence | Nurse Practitioners–standards |
Practice Management–organization &
administration | Risk Management–methods |
United States
Classification: LCC RT86.73 | NLM WY 33 AA1 |
DDC 610.7306/92–dc23
LC record available at
https://lccn.loc.gov/2016047295

6048

Printed in the United States of America
21 20 19 18 17 10 9 8 7 6 5 4 3 2

https://lccn.loc.gov/2016047295

Contents
Preface

Chapter 1 What Is a Nurse Practitioner?
Definition of Nurse Practitioner
An NP, by Any Other Name . . .
Services Provided by NPs
Preparation and License

Requirements
Initials
Areas of Practice
Legal History of NPs
Demographics
NPs in Primary Care
NP Versus Physician Assistant:

What Is the Difference?
NP Versus Physician: What Is the

Difference?
NP Versus RN: What Is the

Difference?
NP Versus Clincial Nurse

Specialist: What Is the
Difference?

Where Do Nurse Practitioners
Practice?

The NP Doctorate
Use of the Title “Doctor”
Appendix 1-A: State-by-State

Definitions of Nurse Practitioner
Appendix 1-B: State-by-State Titles

for Nurse Practitioners

Chapter 2 Legal Nurse Practitioner
Scope of Practice
Professional Association

Definition of Scope of Practice
Statutory Versus Regulatory NP

Scope of Practice
Physician Challenges to NP Scope

of Practice
Need for Clarity of Scope of

Practice
NP Scope of Practice Compared

with Registered Nurse Scope of
Practice

NP and Physician Scope of
Practice Compared

Can an NP Work Outside the NP’s
Certification?

An Individual NP’s Portfolio
Mandated Physician Involvement

with NP Practice

Appendix 2-A: Scope of Practice
Appendix 2-B: Physician

Collaboration

Chapter 3 State Regulation of Nurse
Practitioner Practice
How Laws About NP Practice

Evolve
What Is Regulated?
Appendix 3-A: State-by-State List

of Agencies That Regulate Nurse
Practitioners

Appendix 3-B: State-by-State
Nurse Practitioner Qualifications
Required by Law

Chapter 4 Federal Regulation of the
Nurse Practitioner Profession
Medicare
Medicaid
Nursing Homes
In-Office and Hospital Laboratories

Under the Clinical Laboratory
Improvement Amendments

Self-Referral by Healthcare
Providers Under the Stark Acts

Prescription of Controlled
Substances Under the DEA

Reporting to the National
Practitioner Data Bank

Patient Confidentiality
Discrimination in Hiring and Firing
Requirements Under the

Americans with Disabilities Act
Appendix 4-A: Documentation

Guidelines for Evaluation and
Management Services

Chapter 5 Prescribing
Controlled Substances
Guidelines for Prescribing Legally
Appendix 5-A: State-by-State Law

Prescriptive Authority

Chapter 6 Hospital Privileges
Are Hospital Privileges an Issue

for NPs?
Do PCPs Need Hospital

Privileges?
Do NPs Need Hospital Privileges

for Advancement of the
Profession?

Do Individual NPs Need Hospital
Privileges?

Who Has Hospital Privileges?

Does Federal Law Support Full
Hospital Privileges for NPs?

What Does It Mean to Have
Hospital Privileges?

Levels of Privilege
The Application Process
Expense
Denial of Privileges
Change on the Horizon

Chapter 7 Negligence and Malpractice
What Can Happen to an NP Who Is

Sued?
Life Cycle of a Lawsuit
What Is Malpractice?
Elements of Malpractice
Examples of Lawsuits Against NPs
The National Practitioner Data

Bank
Working with Practice Guidelines
How to Prevent Lawsuits
What to Do If Sued
Communication
Liability of Collaborating

Physicians
Malpractice Insurance

Chapter 8 Risk Management
Risk of Making a Clinical Error
Risk of Being Sued for Malpractice

When There Was No Clinical
Error

Risk of Public Perception That the
Individual NP Is a Poor-Quality
Provider

Risk of Breaching Patient
Confidentiality

Risk of Violating a Patient’s Right
to Informed Consent

Risk of Negligent Nondisclosure
Risk of Poor-Quality Ratings
Risk of Disciplinary Action
Risk of Medicare Fraud
Business Risk Management
Dealing with High-Risk Patients
Risk of Being Accused of

Prescribing or Dispensing
Controlled Drugs Inappropriately

Electronic Medical Records: 18
Ways to Reduce Legal Risks

Chapter 9 Reimbursement for Nurse
Practitioner Services
Payers

Medicare
Medicaid
Indemnity Insurers
Direct Contracts for Health

Services
Billing Third-Party Payers
Billing Self-Paying Patients
Conclusion
Appendix 9-A: Credentialing

Information

Chapter 10 The Employed Nurse
Practitioner
What Rights Does an Employed

NP Have?
Does an NP Need a Contract?
Three Difficult Clauses
How to Negotiate a Reasonable

Agreement
Interviewing
Responsibilities of an NP

Employee
Employer’s Evaluation of the NP’s

Performance
Malpractice Insurance
Collaborative Practice Agreements

Appendix 10-A: Sample Nurse
Practitioner Collaborative
Practice Agreement from the
Indiana Board of Nursing

Appendix 10-B: Sample
Employment Agreement

Chapter 11 Practice Ownership: Legal
and Business Considerations
for the Nurse Practitioner
Owner
Advantages of Practice Ownership
Decisions Before Starting a

Practice
Business Planning
Doing Business
Appendix 11-A: A Checklist for

Setting Up a Practice
Appendix 11-B: Sample

Independent Contractor
Agreement

Appendix 11-C: Sample NP
Business Plan

Appendix 11-D: Sample
Professional Services
Agreement

Chapter 12 Lawmaking and Health Policy
The Legal Process

The Judicial System
Health Policy
Laws and Rules That Affect NPs
Changing Laws
Understanding the Big Picture
The Process of Changing the Law
Conclusion

Chapter 13 Promoting the Profession to
the Public
Public Relations Steps
The Substance of the Message
Supporting Data
Collecting Impressive Facts
Not-So-Impressive Facts About

NPs
Dealing with the Downside
Appendix 13-A: A Simple PR Plan

for a State NP Organization
Appendix 13-B: Tips for Promoting

a Practice or an Individual NP’s
Expertise on Social Media

Appendix 13-C: Some Talking
Points for NPs

Appendix 13-D: Sample Fact Sheet
on NPs

Chapter 14 Standards of Care for Nurse
Practitioner Practice
Who Is Monitoring the Standard of

Care?
How Should NPs Keep Current on

Standard of Care?
Credentialing
NP Competencies

Chapter 15 Measuring Nurse Practitioner
Performance
Measuring Quality
Multiple Measures, Multiple

Measurers
Productivity
Housekeeping Performance

Measures
National Committee for Quality

Assurance Measures of Clinical
Performance

Other Measures
Formal Research
Patient Ratings
Peer Review
Utilization
How to Get an “A” on Performance

Report Cards

Ensuring Compliance
Appendix 15-A: NP Self-Evaluation
Appendix 15-B: Health

Maintenance Flowchart

Chapter 16 Resolving Ethical Dilemmas
The Basics of Biomedical Ethics
Examples
Analyzing the Ethical Choices

Inherent in These Situations
Ethical Analyses

Chapter 17 Strategies for Nurse
Practitioners
Opportunities in a Changing Field
Opponents of the See-a-Nurse-

First System
Challenges for NPs Attempting to

Advance the Profession
Strategies to Implement

Collectively
Ten Organizational Strategies

Chapter 18 Frequently Asked Questions
from Nurse Practioners

Index

Preface
This text contains the answers to many questions
asked of me in my 25 years of practice as an
attorney. I specialize in legal issues affecting nurse
practitioners. The questions came from nurse
practitioners, employers of nurse practitioners,
hospital and nursing facility executives, student
nurse practitioners and their professors, other
attorneys, bureaucrats, and legislators conducting
hearings about bills that addressed nurse
practitioners.

Nurse practitioners frequently ask questions such as
these:

A physician (or hospital or group) wants to hire
me to do [fill in a particular healthcare service].
Can I legally do that?
An insurance company refuses to pay the bill for
a patient’s visit with me. What can I do?
A hospital bought my group’s practice. The
hospital is not sure what to do with me. How can
I help the administrators understand what nurse
practitioners can offer?
What should be covered in my employment
contract?

Can I incorporate in a business with physicians?
I have been working in a trauma center for 4
years. Now, I hear that my notes need to be
cosigned by a physician. Is that true?
An Internet-based pharmacist refuses to fill a
prescription I wrote because I am not a
physician. I have the legal authority to prescribe
in my state. What can I do?
I have been working without a contract. Now, the
company wants me to be on call 3 nights a
week. Do I have to do it?
I am writing a paper for my “nurse practitioner
role” class on legislative issues affecting nurse
practitioners. What are these issues?
How can I get on a health plan’s provider panel?
A group wants to pay me a base salary plus a
percentage of billings over $250,000. Is this
reasonable?
What does “incident to a physician’s professional
services” mean?
How do I start my own practice?
I know nothing about how billing is done. Can
you tell me how to get reimbursed for my
services?

Legislators and bureaucrats frequently ask such
questions as these:

How is a nurse practitioner different from a
registered nurse?
Which states allow nurse practitioners to practice
independently?
How does a nurse practitioner know when to
consult a physician?
Does a physician have to supervise everything a
nurse practitioner does?
In how many states can nurse practitioners write
prescriptions?

Employers of nurse practitioners frequently ask
such questions as these:

I want the nurse practitioner to see my
hospitalized patients. Can we get reimbursed for
that?
How can we get paid by Medicare for patient
visits to the nurse practitioner?
We want to put nurse practitioners in nursing
homes. What can the nurse practitioner do?
Admit patients? Perform the yearly visit?
Perform illness-related visits? Recertify?
Who is liable if the nurse practitioner makes a
mistake, the nurse practitioner or the physician?

Other attorneys ask such questions as these:

A nursing home I represent has hired a nurse
practitioner to do administrative work and to see

patients. How can we bill for his or her services?
My clients want to start a network of nurse
practitioner practices. What can you tell me
about that? Do you know anything about [fill in
any state] law on nurse practitioners?

Some of the questioners have become clients, and I
have done the necessary legal research to answer
their questions and completed the necessary legal
documents to carry out their plans. Others will now
benefit from the work done for those clients.

Nurse practitioners who read this book will have a
solid knowledge base to use, whether it be in
developing an employment relationship, undertaking
a business venture, giving testimony before a state
legislature, composing a letter to an insurance
company about an unpaid bill, teaching at a school
of nursing, or serving as president of a state or
national organization. My hope is that once nurse
practitioners have this base of knowledge about the
business of health care and the legal foundation on
which nurse practitioners function, they can hasten
the advancement of their careers.

Chapter 1: What Is a Nurse
Practitioner?
Individuals who have never experienced the care of
a nurse practitioner (NP)—whether they are
physicians, journalists, lawmakers, bureaucrats,
lobbyists, or new patients—often request
clarification about just who NPs are and what they
do.

It is their combination of the skills of both a
physician and a nurse that seems to confuse
people. Yet it is that combination of skills that makes
an NP unique.

Definition of Nurse Practitioner
The term nurse practitioner has been given a variety
of definitions.

According to a state NP organization, “Nurse
practitioners are registered professional nurses
who are prepared, through advanced graduate
education and clinical training, to provide a
range of health services, including the diagnosis

and management of common as well as complex
medical conditions to individuals of all ages.”
According to a national NP organization, “NPs
are quickly becoming the health partner of
choice for millions of Americans. As clinicians
that blend clinical expertise in diagnosing and
treating health conditions with an added
emphasis on disease prevention and health
management, NPs bring a comprehensive
perspective to health care.”
A board of nursing defines an NP as follows: “A
nurse practitioner (NP) is an RN [registered
nurse] who has earned a separate license as an
NP through additional education and experience
in a distinct specialty area of practice. Nurse
practitioners may diagnose, treat, and prescribe
for a patient’s condition that falls within their
specialty areas of practice. This is done in
collaboration with a licensed physician qualified
in the specialty involved and in accordance with
an approved written practice agreement and
protocols. Nurse practitioners are autonomous
and do not practice under the supervision of the
collaborating physician.”
According to federal law, “Nurse practitioner
means a nurse practitioner who performs such
services as such individual is legally authorized
to perform (in the state in which the individual

1

2

3

performs such services) in accordance with state
laws and who meets such training, education,
and experience required as the Secretary has
prescribed in regulations” [42 U.S.C.A. §
1395x(aa)(5)(A)].
In California state law, “nurse practitioner means
a registered nurse who possesses additional
preparation and skills in physical diagnosis,
psych-social assessment, and management of
health-illness needs in primary health care and
who has been prepared in a program conforming
to board standards as specified in Section 1484”
[CAL. CODE REGS. tit. 16, § 1480(a)].

For state-by-state definitions of the term nurse
practitioner, see Appendix 1-A.

An NP, by Any Other Name . . .
Other designations sometimes given to NPs include
physician extender, mid-level practitioner,
nonphysician practitioner, and advanced practice
nurse. For a state-by-state listing of official terms for
NPs, see Appendix 1-B.

Physician Extender
The term physician extender is used by physicians’
associations and publications aimed at the
physician market and usually refers collectively to

NPs, clinical nurse specialists, nurse anesthetists,
nurse midwives, and physician assistants.

Mid-Level Practitioner
The term mid-level practitioner is used by some
physician groups, some states, and the federal
government in the Code of Federal Regulation
sections dealing with Drug Enforcement
Administration (DEA) registration. The DEA defines
a mid-level practitioner as follows:

The term mid-level practitioner means
an individual practitioner other than a
physician, dentist, veterinarian, or
podiatrist, who is licensed, registered,
or otherwise permitted by the United
States or the jurisdiction in which
he/she practices to dispense
controlled dangerous substances in
the course of professional practice.
Examples of mid-level practitioners
include, but are not limited to,
healthcare providers such as nurse
practitioners, nurse midwives, nurse
anesthetists, clinical nurse specialists,
and physician assistants who are
authorized to dispense controlled

substances by the state in which they
practice.

Citation: 21 C.F.R. § 1300.01(b).

Some state laws provide a definition of mid-level
practitioner. For example, in Minnesota, “‘Mid-level
practitioner’ means a nurse practitioner, nurse
midwife, nurse anesthetist, advanced clinical nurse
specialist, or physician assistant” [MINN. STAT. §
144.1501(f)].

Nonphysician Practitioner
The term nonphysician practitioner is used by the
Centers for Medicare & Medicaid Services and
Medicare administrative contractors. Here is the
definition from one administrator’s website:

For Medicare purposes, the term
nonphysician practitioner (NPP)
includes:

Nurse practitioner or clinical nurse specialist, as
those terms are defined in section 1861(aa)(5) of
the Social Security Act, who is working in
collaboration with the physician in accordance
with State law

4

Certified nurse–midwife, as defined in section
1861(gg) of the Social Security Act, as
authorized by State law
A physician assistant, as defined in section
1861(aa)(5) of the Social Security Act, under the
supervision of the physician

Advanced Practice Nurse
Advanced practice nurse is an umbrella term used
by some states and some nursing associations to
cover, collectively, NPs, clinical nurse specialists,
nurse–midwives, and nurse anesthetists. NPs differ
from other advanced practice nurses in that they
offer a wider range of services to a wider portion of
the population. Other advanced practice nurses
compare with NPs in the following ways:

Nurse anesthetist: Narrow range of services
(preoperative assessment, administration of
anesthesia, management of postanesthesia
recovery) to a narrow base of patients (people
having anesthesia).
Clinical nurse specialist: Medium range of
services (consultation, research, education,
administration, coordination of care, case
management, direct care within the definition of
a registered nurse) to a narrow patient base
(people under the care of a medical specialist).

Certified nurse–midwife: Narrow range of
services (well-women gynecologic care,
management of pregnancy and childbirth,
antepartum and postpartum care) to a medium-
sized base of patients (childbearing women).
Nurse practitioner: Wide range of services
(evaluation, diagnosis, treatment, education, risk
assessment, health promotion, case
management, coordination of care, counseling)
to a wide base of patients, depending on area of
certification; a family nurse practitioner can have
a patient base of any age, gender, or problem.

Services Provided by NPs
NPs may perform any service authorized by a state
nurse practice act. Some nurse practice acts are so
broad as to allow any service agreed on by an NP
and a collaborating physician. Generally, NP
services include:

Obtaining medical histories and performing
physical examinations
Diagnosing and treating health problems
Ordering and interpreting laboratory tests and X-
rays
Prescribing medications and other treatments
Providing prenatal care and family planning
services
Providing well-child care and immunizations

Providing gynecologic examinations and Pap
smears
Providing education about health risks, illness
prevention, and health maintenance
Providing counseling regarding the need for
compliance with a diagnostic and/or treatment
plan, course of illness, side effects of treatment,
and/or prognosis
Coordinating care and case management

Typically, an NP has the following duties and
responsibilities:

Conducts comprehensive medical and social
history of individuals, including those who are
healthy and those with acute illnesses and
chronic diseases
Conducts physical examination of individuals,
either comprehensive or problem focused
Orders, performs, and interprets laboratory tests
for screening and for diagnosing
Prescribes medications
Performs therapeutic or corrective measures,
including urgent care, tertiary care, or critical
care
Refers individuals to appropriate specialist
nurses, physicians, or other healthcare providers
Makes independent decisions regarding
management and treatment of medical problems

identified
Performs various invasive/clinical procedures,
such as suturing, biopsy of skin lesions, and
endometrial biopsy, depending on education,
training, patient needs, and written agreement
with physician collaborator
Prescribes and orders appropriate diet and other
forms of treatment, such as physical therapy
Provides information, instruction, and counseling
on health maintenance, health promotion, social
problems, illness prevention, illness
management, and medication use
Evaluates the effectiveness of instruction and
counseling and provides additional instruction
and counseling as necessary
Initiates and participates in research studies and
projects
Teaches groups of clients about health-related
topics
Provides outreach health education services in
the community
Serves as preceptor for medical, nursing, NP, or
physician assistant students
Accepts after-hours calls and handles after-
hours problems on a rotating schedule
Participates in development of pertinent health
education materials

Participates in development of clinical practice
guidelines
Initiates and maintains follow-up of noncompliant
patients
Makes client home visits and provides care in
the home as necessary
Makes hospital visits and follows hospital care of
established patients
Consults with other healthcare providers about
established clients who have been admitted to
hospital, home care, rehabilitation, or nursing
homes
Corresponds with insurers, employers,
government agencies, and other healthcare
providers about established clients as necessary
Manages care of clients; develops plan of
treatment and/or follow-up and monitors
progress, determines when referral to another
provider is necessary, makes necessary
arrangements for further care, determines when
hospital admission or emergency room visit is
necessary, and determines when illness is
resolved
Assesses social/economic factors for each client
and tailors care to those factors
Manages care of clients in a way that balances
quality and cost

Tracks outcome of interventions and alters
interventions to achieve optimum results
Obtains informed consent from clients as
appropriate and necessary
Maintains familiarity with community resources
and connects clients with appropriate resources
Contracts with clients regarding provider
responsibilities and client responsibilities
Supervises and teaches registered nurses and
nonlicensed healthcare workers
Participates in community programs and health
fairs, school programs, and workplace programs
Represents the practice or the profession as an
NP before local and state governing bodies,
agencies, and private businesses as needed

Preparation and License
Requirements
All NPs are registered nurses (RNs) with education
beyond the basic requirements for RN licensure.
Most NPs have master’s degrees, and some have
doctorates. Master’s degrees for NPs are required
by law in 40 states. NPs without master’s degrees
have completed a program that meets requirements
of state law.

State-required qualifications vary widely. For
example, in Alaska, NPs must have completed a 1-
year academic course, have an RN license, be

certified by a national certifying agency, and have
30 hours of continuing education every 2 years. In
Pennsylvania, NPs must have an RN license, a
master’s degree, and certification by a national
organization; must provide evidence of continuing
competence in medical diagnosis and therapeutics;
and must have 30 hours of continuing education per
year and 45 hours of advanced pharmacology.
Federal law defers to state law regarding NP
qualifications (42 C.F.R. § 440.166).

In 45 states, NPs are required by state law to take
and pass a national certification exam. A state
requirement that an NP be nationally certified leads
to a requirement of master’s education because the
certifying agencies of adult and pediatric NPs
require a master’s degree to sit for the certification
examination.

Initials
Among the initials used to designate NPs are CRNP
(certified registered nurse practitioner); ANP-C
(adult nurse practitioner–certified); CPNP (certified
pediatric nurse practitioner); CGNP (certified
geriatric nurse practitioner); RN, CS (registered
nurse, certified specialist); ARNP (advanced
registered nurse practitioner); and APRN (advanced
practice registered nurse).

Areas of Practice
NPs may be certified in the following areas:

Adult primary care
Family …

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