Capture the Full Scope of Secondary Provider Reimbursement

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  • September 1, 2008
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Incident-to and Shared Services from the Provider Prospective

By Susan Theuns, PA-C, CPC, CHC
In recent years, the industry renamed “mid-level providers” “non-physician providers” (NPPs). NPPs are chiefly certified registered nurse practitioners (CRNPs or NPs) and physician assistants–certified (PA-Cs). There are also clinical nurse specialists (CNS) who are considered NPPs as well as nurse midwives, nurse anesthetists, and clinical psychologists.

New Acronym Brings Rule Changes

NPP direct supervision regulations are determined on the state level so requirements vary. In some states, the supervising physician does not need to be on-site for office settings, house calls, hospitals, or skilled nursing facilities. Each practice needs to check with its state board to find out applicable regulation details in its area. Keep in mind, though, that state rules govern the clinical requirements for NPP services. Billing requirements from individual payers may differ from clinical requirements from government regulators.

NPPs Must Be Licensed

On a national level, there are basic requirements for NPPs’ employment eligibility and the ability to provide medical care as an NPP. They must graduate from an accredited program, pass a certification exam, and carry a license in the state in which they practice. Non-certified or unlicensed NPPs cannot be employed as an NPP to provide the usual scope of services associated with the title.

Weigh Incident-to Billing Options

One of the biggest decisions is whether to bill incident-to the supervising physician. Incident-to means the service and/or procedure provided by the NPP is billed under the physician’s National Provider Identifier (NPI) and not the NPP’s NPI. There are pros and cons for each billing option and very often, the payer makes the decision for the NPP.
Since incident-to was developed by the Centers for Medicare & Medicaid Services (CMS), you should verify with commercial payers to check specific billing guidelines for these services and to compare their definitions. Commercial payers may, for example, allow NPPs to see new or existing patients with new problems whereas Medicare does not.
Pro: The pro to billing incident-to is that no special distinction is necessary for supervising physician billing. When billing as incident-to, staff must assure that all CMS guideline criteria are met. The criteria includes that (1) services must be performed under a physician’s supervision and (2) the services must be an integral, although incidental part of the physician’s personal professional services.
Other limitations of using CMS incident-to guidelines include the following:

  • The NPP cannot bill incident-to if the supervising physician is not present in the office suite when the service is provided.
  • Services provided by NPPs who do not have their own NPI recognized by the patient’s payer, and are working without on-site supervision, cannot be billed under any circumstances (unless the rural exception applies).
  • The NPP cannot provide incident-to services to any patients new to the practice.
  • The NPP cannot treat an established patient for a new problem.

The last two bullets can exasperate physicians who employ a NPP as an extender to help accommodate urgent care patients. The problem is not that NPPs cannot see these patients. They can, although documentation and supervision should be done in a different way.
For example, an NPP can see a new patient but the supervising physician also needs to see the patient face-to-face. The physician needs to document the history and physical exam elements and establish the treatment plan. The final evaluation and management (E/M) code is based on the physician documentation only. The service is billed under the physician’s NPI rather than directly billed by the NPP.
If an established patient sees the NPP with a new problem such as bronchitis, the patient must also see, at least briefly, the supervising physician. The supervising physician must document the new treatment plan for the new problem. In both of these examples, the NPP can initiate the E/M visit. The difference is if it’s a new patient, or an established patient with a new problem, the supervising physician must determine the diagnosis and establish a treatment plan. Once the patient has an established problem, such as the bronchitis diagnosis, and he or she presents with an exacerbation or recurrent or chronic bronchitis, the NPP can see the patient alone incident-to if the supervising physician is in the office in some capacity at the same time. If the physician is not in the office when services are provided by the NPP, the services should be billed directly under the NPP’s provider number. This is state-dependent since some states do not allow certain NPPs to provide services unless the supervising physician is on-site.
Although new patients as a general rule under CMS cannot be seen by an NPP, Medicare allows NPPs to see new Medicare patients for the Initial Preventive Physical Exam (IPPE) using G0344 Initial preventive physical examination; face-to-face visit, services limited to new beneficiary during the first six months of Medicare enrollment.
In rural areas with a shortage of physicians, a practice or facility can obtain an exception from CMS allowing an NPP to see patients without the supervising physician on-site. These exceptions are health professional shortage areas. With the exception allowance, the supervising physician must still be available to the NPP by phone or other means and aware of the NPP’s diagnosis and treatment of patients.
Con: One of the perceived cons of incident-to is that NPPs billing with their NPI directly will be paid at a lower rate than if billed incident-to the supervising physician. Incident-to services are paid at 100 percent of the physician fee schedule. The reduction for direct NPP billing is generally 15-20 percent by most payers and CMS uses 15 percent for Medicare. Medicare pays 85 percent of the Medicare physician fee schedule (MPFS) with the patient being responsible for 20 percent of the 85 percent. Midwives are reimbursed at 65 percent of the MPFS. With Medicare claims, assignment of benefits is mandatory for NPPs.
Many offices prefer the direct method of billing as it allows the NPP to work more independently in the practice, it frees the physician’s schedule to see his or her own patients, and it increases overall productivity for the office. Many office practices only use the incident-to provision when the payer does not recognize the NPP as an independent provider. For this reason, it is helpful to make a grid of all contracted payers and indicate whether they allow NPP direct billing. This “cheat sheet” can be used as a guide for both the NPP and billing staff to determine when to bill directly versus incident-to. The practice should contact all contracted payers to determine if they have specific documentation requirements or if they follow Medicare incident-to policy. You should get this in writing or at least document the conversation, with whom you spoke, and the date and time. If an NPP bills directly to a payer not recognizing the provider as an independent provider, the claim will be denied.
In the very rare circumstance when an NPP provides a service in his or her capacity and within the scope of employment that does not fulfill E/M code requirements, CMS instructs the NPP to bill 99499 Unlisted evaluation and management service. Code 99499 may be used for a service such as taking a comprehensive history only. If not enough key components are performed and documented to meet the criteria of the E/M code, CMS instructs a partial E/M service to be billed with 99499 because you cannot bill an E/M code with modifier 52 reduced services.

Follow Shared Visit Rules

Incident-to only applies to outpatient and office services. Incident-to does not apply to inpatient care—the inpatient side is known as a “shared visit.”
In 2002, CMS issued billing guidelines for when more than one provider employed by an entity (same tax identification number (TIN) provide care for the same patient on the same day. The combined work can be billed under a single provider’s NPI for 100 percent reimbursement (in the case of an NPP and physician, it would be billed under the physician’s NPI regardless of how much each contributed). This does not apply to consultations, procedures, critical care services, or services in other settings (i.e., skilled nursing facility (SNF), home care). According to Medicare transmittal 1776, either the NPP or physician can bill for a shared visit in a split services situation. Because the physician reimbursement is 100 percent and the NPP is 85 percent, it is financially advisable to bill under the physician’s NPI.
Physician and NPP shared visit requirements include the following requirements:

  • The physician and NPP must have the same employer.
  • The visit must be an E/M service only.
  • Both E/M services must occur on the same calendar day.
  • The physician and NPP should personally document in the medical record his or her portion of the E/M visit.
  • Documentation must support the combined service level billed and medical necessity.
  • The physician must have face-to-face time with the patient.
  • The visit is usually for inpatient care only.

One exception for inpatient care only is if a patient is seen in the office and the decision to admit the patient on the same day is made, then the documentation for the hospital admission E/M service can be combined with the documentation for the office E/M service. The combined work for the two providers can be counted toward the admission documentation, which may result in a higher level code billed, in some instances.

Report First Assisting in Surgery Services

CMS reimburses PA-Cs, NPs, and some clinical nurse specialists (CNS) for first assisting in surgery at 13.6 percent of the primary surgeon fee for the procedure(s), which is 85 percent of the physician first assist rate of 16 percent. Bill for these services using the CPT® or the HCPCS Level II code for the procedure, appended with modifier AS Physician assistant, nurse practitioner, or clinical nurse specialist services for assistant-at-surgery.
If the procedure does not warrant an assistant surgeon under CMS guidelines, the NPP claim with modifier AS services will be denied. Since most payers follow CMS guidelines, check that first assisting in surgery is covered prior to providing the service(s). Many organizations certifying NPPs provide up-dated lists of first assisting in surgery procedures on their Web sites, such as the American Academy of Physician Assistants (AAPA) CMS also published a General Surgery Billing Guide in May for download at
The basic guidelines of section 4107 of the Omnibus Budget Reconciliation Act of 1990 (OBRA 90) state that Medicare nationally does not reimburse an assistant surgeon for procedures using an assistant less than five percent of the time. These claims cannot be appealed if denied and the patient cannot be balance-billed for surgical assist—even if the patient signed an Advance Beneficiary Notice (ABN). You should still bill for the service using modifier AS and modifier GZ Item or service not reasonable and necessary to let Medicare know the surgery did require an assistant and you know it will not be covered. If you do not report that an assistant was needed, it will not be noted and the five percent threshold will never be crossed for that particular procedure.

Stay Within Guidelines and Know Your Options

NPPs nationally certified with their practicing state’s NPP license can provide services similar to physician’s services within the scope of state guidelines. Part B’s service range can be billed in a variety of ways, depending on provision circumstances and surroundings. Although there are often reductions in reimbursement for services directly billed under the NPP’s NPI, there are advantages to NPP NPI billing and alternatives where billing under their supervising physician’s NPI is acceptable. Practices need to weigh the pros and cons of each carefully and follow the guidelines set by the payer.

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