By Lawrence S. Simon, CPA

Published September 2001

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Patient Services

PAs and NPs, if properly trained and supervised, can perform many of the more routine services physicians would otherwise have to provide directly. They can take medical histories, perform physicals, order medication, lab tests and x-rays, provide patient education, and perform many of the indirect patient care responsibilities. This will free up the physician’s time to focus their attention and skills on those patients who require a higher level of care and allow the practice to treat more patients daily.

PAs and NPs can also be used for telephone triage. When practices have periods of high telephone traffic, especially pediatric practices, the PA and NP can step in. They can help determine the patient’s problem and the urgency for the physician to see him or her. They can also determine if it is a routine matter or if the patient must be seen that day. The PAs and NPs can assist practices with the scheduling of patients.

Compensation

PAs or NPs command compensation at approximately 75 percent of the starting salary of a new physician. Although they will expect raises based on performance, these compensation increases will usually be less than will be awarded to physicians and they, of course, will usually not expect shareholder status or incentive bonuses.

Billing For "Incident To" Services

Medicare Provider numbers are available to Physician Assistants, Nurse Practitioners and Clinical Nurse Specialists. When these charges are submitted to Medicare under the Non-Physician Practitioner name and provider number, the covered services will be paid at 85 percent of Medicare’s allowable for physicians. However, if the services meet the "incident to," requirements, these non-physician provider services could be paid at 100 percent. According to the Trailblazer Health Enterprises, LLC publication, "1999 Medicare Part B Infofair" the four requirements are as follows:

• The PA, NP or CNS must be an employee.

• The physician has to have initially seen the patient.

• The physician has to provide direct supervision, be within the office suite and be available to render assistance if necessary.

• The physician must have an active participation in the care of the patient.

Trailblazers emphasized the definition of items three and four. Direct supervision requires the physician to be in the same suite; they cannot be across the hall. If the place of service code is 21, 22, or 23 (hospital setting), "incident to" cannot be billed. However, if the services rendered are in a nursing home, "incident to" can be billed but the physician must be in the same wing of the nursing home. There are no written requirements to document the physician’s involvement in the care of the patient. However, the best documentation is to have the physician review and sign off on the notes to show the physician’s participation.

If these requirements are met, the services meet "incident to" and should be billed with a YR modifier under the physician’s name and provider number. The covered services will then be 100 percent of Medicare’s allowed fee, rather than the 85 percent the non-physician provider would receive when billing under their own provider number.

Other Issues

Malpractice costs for these providers usually runs 25 percent to 33 percent of a primary care physician’s premium. Also, be sure to check with other participating health plans to ascertain what their guidelines are for using PAs and NPs for medical care and what reimbursement will be for their services. Ask each plan what is the correct way to submit for these services. When considering the decision to hire a non-physician provider, you need to look at community standards as well as the practices of competing physicians. After hiring a physician extender, introduce them individually to your patients and monitor their reactions carefully. PAs and NPs also should be introduced to your referral sources. They make excellent goodwill ambassadors for the practice.

PAs and NPs can also be used by physicians who have a large surgical practice. They can take patient histories in the hospital and answer patients’ questions and assist with patient discharge. They can update the patient’s billing records to insure the proper information is on record and ensure that the proper parties are billed.

The proper use of a PA and NP should provide the physician with more time to provide higher quality of care. This will also allow physicians to provide additional services to their patients. The additional fees they are able to bill for their services will cover the compensation and benefits paid to a PA and NP. The majority of case studies have ascertained that the use of PAs and NPs, when properly trained and utilized, enables practices to provide a higher quality of services and allows the physician to treat more patients in a timely manner.

With good training, orientation and careful implementation, your new NP or PA should be well accepted by patients and should enhance the productivity of your practice.

Lawrence S. Simon, CPA is Principal-in-Charge of the Health Care Services Group of Margolis & Company P.C., one of Philadelphia’s largest regional accounting and business consulting firms.