Physician Assistant Clinic Ownership: What To Report & Why

At PPS, we routinely start PA owned clinics and ownership requirements often catch physician assistants by surprise.  As a result of this important detail being overlooked, clinic openings are often stalled or tabled completely.  It is confusing as some states allow PAs to operate independently which contradicts in some ways Medicare’s requirement for PAs to have at least one other owner.  Unfortunately, there is conflicting information out there regarding PA ownership requirements due to state specific legislation regarding what types of providers/non-providers can own a medical clinic. There are also state specific laws that govern what kind of organization can employ a physician.  Due to the conflicting and often confusing information out there regarding PA clinics, it’s critical that you consult with a healthcare attorney in your state to ensure your corporate entity is formed correctly to comply with state and federal law.

From CMS: “Due to existing direction from CMS for the completion of the CMS-855B application(in PECOS or on paper), you are only required to disclose individuals who have 5% or greater direct/indirect ownership. In addition, physician assistants (PAs) may not have total (100 percent) ownership of an organization/group. As a result, applications received to enroll a group that is reported to be solely owned by a PA are denied for PA ownership since the group cannot report individuals who have less than 5% ownership. 

One or more PAs can have ownership in a group as long as the entity is eligible to enroll as a provider or supplier in the Medicare program, meaning one or more physician or non-physician practitioner (NPP) also has at least one percent ownership in the group in addition to the PA owner(s).
 
To prevent the denial of your application if you have qualified owners (a PA owner and non-PA owners with less than 5% direct/indirect ownership) OR to appeal a previous denial for 100% PA ownership, please provide documentation to demonstrate the group’s ownership with the submission of your application. The documentation can include a letter, chart, or other written documentation that clarifies that the group is not solely owned by a PA. Please ensure the documentation is submitted with your application or within the specified appeal timeframe”
 
 
PAs & Practice Ownership
 
Practices that plan to bill Medicare must structure the business accordingly. Medicare policy allows PAs to own up to 99 percent of a state-approved corporation that is authorized to bill the Medicare program, but a corporation owned entirely by PAs cannot bill Medicare.
 
Medicare’s PA ownership policy does not affect PAs who own certified Rural Health Clinics (cRHCs). Medicare regulations allow PAs to fully own cRHCs. Reimbursement is paid to the clinic
 
 
 
We encourage you to view the CMS claims handbook for additional information regarding PA practice policies.
 
U.S. Department of Health and Human Services, Centers for Medicare and Medicaid Services. Medicare Carriers Manual Part 3 – Claims Process. Transmittal 1744, Section 2156.D. March 12, 2002. https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/downloads/R1744B3.pdf