Medicare Update

New Options for Billing for PA Services

Covered in FPM Quiz

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, page 12.) 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.
• 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, Medicare will provide 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.
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