Billing Medicare for the services of NP's and PA's

By Michael R. Burke, Esq.

As reimbursements from Medicare and other third payors continue to decline, physicians are faced with the task of using their time more productively and maximizing the resources of their practices. As such, the use of physician extenders such as nurse practitioners and physician assistants has become increasingly common in the practices of many physicians. This article will provide an up-to-date primer on billing Medicare for services rendered on behalf of physician practices by nurse practitioners and physician assistants. This article focuses on the Medicare rules and regulations governing the use of these physician extenders; please note that third party payors may or may not follow Medicare’s rules in this regard.

As will be further discussed below, the services of nurse practitioners and physician assistants may be billed by a physician practice using the name and Medicare billing number of these providers. However, when certain conditions are met, the services of nurse practitioners and physician assistants may instead be billed as an “incident to” service. However, when billing for the services of these physician extenders as “incident to” services, Medicare’s rules governing payment of “incident to” services must be strictly followed. While the nuances of “incident to” billing to Medicare are extensive and an exhaustive analysis of these issues is beyond the scope of this article, the concept behind “incident to” billing is that Medicare will pay for services and supplies that are furnished incident to a physician’s or other practitioner’s services, that are commonly included in the physician’s or practitioner’s bills, and for which payment is not made under a separate Medicare benefit category. To be covered as services “incident to” the services of a physician, the services and supplies furnished by the auxiliary personnel of the physician or group must meet the following conditions:

• They must be an integral, although incidental, part of the physician’s professional service.

• They must be commonly rendered without charge or included in the physician’s bills.

• They must be of a type that is commonly furnished in physician’s offices or clinics.

• They must be furnished by the physician or by auxiliary personnel under the physician’s direct supervision.

Beyond the aforementioned basic conditions of “incident to” billing, there are other important considerations associated with such billing of which physicians should need to take note. These include but are not limited to the definition of “direct supervision” (having the physician present in the office suite and immediately available to provide assistance and direction throughout the time that the auxiliary personnel are performing “incident to” services); to the fact that an “incident to” service cannot be rendered by the physician extender or other auxiliary personnel on the patient’s first visit; and that “incident to” services cannot be billed for hospital patients and for patients in a skilled nursing facility who are in a Medicare-covered stay (with the alternative for these situations being to bill such services under the provider number of the nurse practitioner or physician assistant, as will be discussed below).

“Incident to” services are paid as if the physician provided them. As such, these services are reimbursed at 100 percent of the Medicare fee schedule. Payments for services rendered by physician assistants and nurse practitioners and billed using their individual Medicare billing numbers each have certain limits that will be further discussed below.

Nurse Practitioners

In order to bill for the services of a nurse practitioner in his or her name and Medicare billing number (and not as an “incident to” service), several requirements must be met. If a nurse practitioner already has received a Medicare billing number, a physician or physician group may add the nurse practitioner to its Medicare assignment account. If a nurse practitioner applies for a Medicare billing number for the first time on or after January 1, 2003, he or she must be licensed by the state in which he or she intends to practice and meet certain educational and certification requirements set forth in Medicare’s rules and regulations.

Coverage for the services of nurse practitioners is limited to the services that a nurse practitioner is legally authorized to perform in accordance with state law and regulations. In addition, all of the following conditions must be met for the services of a nurse practitioner to be covered when billed by a physician or physician group utilizing the nurse practitioner’s Medicare billing number:

• They are the types of services that are considered to be physician’s services when furnished by a doctor of medicine or osteopathy.

• They are furnished by a person who has received a Medicare billing number as having satisfied the aforementioned qualifications to obtain such a number.

• The nurse practitioner is legally authorized to furnish the services in the state in which they are performed.

• The services are furnished in collaboration with a physician as required by state law.

• The services are not otherwise precluded from coverage because of a statutory exclusion.

Medicare defines “collaboration” as being a process in which a nurse practitioner works with one or more physicians to deliver health care services, with medical direction and appropriate supervision as required by the law of the state in which the services are furnished. Where a state does not have a law or regulations that govern collaboration, it is to be evidenced for Medicare purposes by the nurse practitioner documenting the scope of his or her practice and the relationships that he or she has with physicians to handle issues that arise which are outside the scope of his or her practice. For Medicare billing purposes, when billing under the nurse practitioner benefit (and not as an “incident to” service), the collaborating physician does not need to be present with the nurse practitioner when the services are furnished. Supervision requirements are set by state law.

When a physician or group practice bills in the name of a nurse practitioner and uses his or her Medicare billing number, payment will be made at the lower of 80 percent of the actual charge or 85 percent of the physician fee schedule amount. Services and supplies furnished “incident to” the services of nurse practitioners may also be covered if they would have been covered when furnished “incident to” the services of a physician. Nurse practitioners may be employees or independent contractors of a physician or physician group in order to allow the physician or group to bill for their services. Nurse practitioners are also permitted to bill independently or to form their own entities to bill and receive payment from Medicare.

Physician Assistants

As is the case with nurse practitioners, Medicare has set forth certain qualifications to allow physician assistants to be providers under the Medicare program. Physician assistants who received Medicare billing numbers prior to January 1, 1998 are exempt from meeting these qualifications. As was the case with nurse practitioners, physician assistants who are applying for their Medicare billing numbers at the present time must be licensed in the state in which they intend to practice and meet certain educational and certification requirements set forth in Medicare’s rules and regulations.

Medicare coverage is limited to services that a physician assistant is legally permitted to perform in the state in which he or she is practicing. In addition to the foregoing, the following requirements must be met for the services of a physician assistant to be covered under Medicare:

• They are the types of services that are considered physician services if furnished by a doctor of medicine or osteopathy.

• The services are performed by a person who meets the qualifications for receiving a physician assistant Medicare billing number.

• The services are performed under the general supervision of a physician.

• The services are not otherwise precluded from coverage because of a statutory exclusion.

The level of supervision required under the physician assistant billing benefit is general supervision. The supervising physician does not need to be physically present while the physician assistant is performing services unless such presence is otherwise required by the law of the state in which the physician assistant practices. However, the supervising physician must be immediately available to the physician assistant for consultation. As such, the requirements of state law must also be examined in this regard to make sure that the physician assistant is complying with applicable state and Medicare rules and regulations.

Unlike nurse practitioner services, payment for the services of physician assistants may be made only to the actual qualified employer of the physician assistant. However, for purposes of the physician assistant benefit, Medicare law amended the definition of employment relationship to include independent contractor arrangements. Physician assistants may not bill and receive payment on their own or in a group of physician assistants.

As is the case with nurse practitioners, payment for physician assistant services is based on the lower of either 80 percent of the actual charge or 85 percent of the physician fee schedule amount.

The foregoing provides a basic summary of Medicare’s rules and regulations with regard to the ability of physicians and physician groups to bill for services rendered by nurse practitioners and physician assistants. However, there are specific nuances for each of these categories that are beyond the scope of this article. If you have any specific questions with regard to billing for services of these physician extenders, there is a wealth of free information that can be found at the website for CMS (www.CMS.gov) or from your local Medicare carrier (in Pennsylvania, www.HGSA.com). If you have any questions that cannot be answered by reviewing these sources of information, you should consult a health care attorney who is versed in Medicare reimbursement matters.

Michael R. Burke, Esq., is a shareholder in the health care law firm of Kalogredis, Sansweet, Dearden and Burke, Ltd. located in Wayne, Pennsylvania.