Jul-Aug 1998 Table of Contents

Reimbursement Strategies

Medicare Update



FREE PREVIEW Log in or buy this issue to read the full article. AAFP members and paid subscribers get free access to all articles. Subscribe now.


FREE PREVIEW Subscribe or buy this issue. AAFP members and paid subscribers get free access to all articles.

Fam Pract Manag. 1998 Jul-Aug;5(7):23.

This content conforms to AAFP CME criteria. See FPM CME Quiz.

AMA House Rejects ‘New Framework,’ Votes to Oppose Quantitative Documentation Guidelines

The AMA House of Delegates passed a resolution at its annual meeting in June to “oppose any documentation system that requires quantitative formulas or assigns numeric values to elements in the medical record to qualify as clinically appropriate medical record-keeping.” At press time, it was still unclear what effect the resolution would have on the documentation guidelines or on the AMA-HCFA collaboration that has produced them.

Douglas E. Henley, MD, family physician and member of the AMA's CPT Editorial Panel, says the panel's work “has come to a screeching halt” pending the results of AMA-HCFA negotiations.

A HCFA official says that HCFA must move forward with development and implementation of a set of documentation guidelines, “regardless of the outcome of those discussions.” Robert Berenson, MD, director of HCFA's Center for Health Plans and Providers, says “the resolution would essentially nullify the guidelines without providing any viable alternative.”

Henley hopes the AMA will continue to be part of the development process. “It appears that HCFA feels very strongly that some sort of quantitative system of guidelines will be necessary,” he says. “If HCFA maintains that stance, and I think they will, the question will become whether the AMA wants to be involved. If the AMA opts out, we'll probably have to live with ‘black box’ criteria developed by HCFA.”

The CPT Editorial Panel, HCFA and AMA leaders have been working for several months to develop a “new framework” for the documentation guidelines. The new framework is a simplified version of the revised guidelines that drew widespread criticism upon their release last year. In April, HCFA consented to appeals from organized medicine to delay implementation of the revised guidelines so that further changes could be made. However, random prepayment reviews of Medicare claims have continued, and physicians' documentation must comply with either the original 1994 guidelines or the revised version released last year.

New Options for Billing for PA Services

The 1997 Balanced Budget Act (BBA) liberalized Medicare coverage of physician assistant (PA) services effective Jan. 1, 1998, by removing limits based on setting and place of service. Similar changes were made for reimbursing nurse practitioner (NP) services. (See “Billing for NP Services: What You Need to Know,” May 1998.) Here's an explanation of Medicare's PA policy:

What's covered?

In addition to covering PA services that are billed incident to a physician's care, Medicare now covers PA services billed separately under a PA's own provider identification number (PIN), provided the following conditions are met:

  • They are considered physicians' services when furnished by an allopathic or osteopathic physician,

  • They are performed by a person who meets the definition of a PA,

  • They are not otherwise excluded from coverage by law,

  • They are performed under the supervision of a physician,

  • State law allows PAs to perform the services.

Medicare also covers services and supplies furnished incident to a PA's covered services.

Defining “PA”

To be considered a PA under Medicare's definition, a provider's qualifications must meet the applicable state requirements for PAs and at least one of the following conditions:

  • The provider must be currently certified by the National Commission on Certification of Physician Assistants to assist primary care physicians.

  • The provider must have satisfactorily completed a formal educational program that prepares PAs to assist primary care physicians. The program must be at least one academic year in length, consist of supervised clinical practice and at least four months of classroom instruction, and be accredited by the AMA's Committee on Allied Health Education and Accreditation.

  • The provider must have satisfactorily completed a formal educational program that prepares PAs to assist primary care physicians but that does not meet the requirements above and must have been assisting primary care physicians for a total of 12 months during the 18 months immediately preceding Jan. 1, 1987.

Defining “supervision”

To satisfy Medicare requirements, the PA must work with a physician supervisor who is primarily responsible for the overall direction and management of the PA's professional activities and for ensuring that the services provided are medically appropriate. The physician supervisor need not be present when the PA furnishes a service, unless state law provides otherwise. If the physician supervisor is not present, he or she must be immediately available to the PA for telephone consultation.

Billing for PA services

To bill Medicare for PA services (other than “incident to” services), the PA must have a PIN. Ask your carrier's provider relations office for a HCFA 855 form to apply for a PIN. Services furnished by a PA must be billed by the employer using the PA's PIN.

The BBA provides that “an employment relationship may include any independent contractor arrangement, and employer status shall be determined in accordance with the law of the state in which the services … are performed.” Thus, a physician who contracts with a PA will be considered that PA's employer for billing purposes. Note that this definition of employment is broader than the definition of employment that determines eligibility for “incident to” billing, which we'll discuss later.

Finally, assignment is mandatory, and you need to attach modifier -AS to the CPT codes you bill for assistant-at-surgery claims.

Getting paid

Medicare will reimburse PA services (other than “incident to” services) based on 85 percent of the amount shown on the physician fee schedule. In some situations, this rate marks an increase. For example, before Jan. 1, Medicare based reimbursement for PA services in hospitals on 75 percent of the physician-fee-schedule amount. As with NP services, reimbursement as long as it has not already paid a facility or provider for the same PA services. Payment for PA services is made only to the PA's employer; the BBA did not authorize direct reimbursement to PAs.

What about “incident to” reimbursement?

The BBA did not change the “incident to” rules for PA services. One of the advantages of billing “incident to” is that the payment is the same as if the physician had performed the service — 100 percent of the fee-schedule amount.

One disadvantage is that more supervision is required. The physician must be in the office suite when the service is provided and immediately available to provide direction to the PA.

Ask yourself these questions in deciding whether to bill separately or “incident to”:

  • Is the PA an employee (leased or otherwise) or an independent contractor? If the PA is an independent contractor, you can never bill the services as “incident to”; if the PA is an employee, you have the option.

  • Was the doctor in the office suite when the PA provided the services? If not, you cannot bill them as “incident to”; if so, you have the option.

Finally, consider the relative payment amounts. If your answers suggest that you can bill “incident to,” you probably should. Why discount your practice's services if you don't have to?

Kent J. Moore is the AAFP's manager for reimbursement issues and a contributing editor to Family Practice Management.

Copyright © 1998 by the American Academy of Family Physicians.
This content is owned by the AAFP. A person viewing it online may make one printout of the material and may use that printout only for his or her personal, non-commercial reference. This material may not otherwise be downloaded, copied, printed, stored, transmitted or reproduced in any medium, whether now known or later invented, except as authorized in writing by the AAFP. Contact fpmserv@aafp.org for copyright questions and/or permission requests.

Want to use this article elsewhere? Get Permissions


Article Tools

  • Print page
  • Share this page
  • FPM CME Quiz

Information From Industry