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Fam Pract Manag. 1998;5(5):12-15

Documentation Guidelines Likely to Change

In testimony presented last month at a Congressional field hearing on Medicare fraud and abuse, Nancy Dickey, MD, president-elect of the AMA, gave the strongest indication to date that the revised E/M documentation guidelines developed by the AMA and HCFA will change.

“We ... hope to have available for discussion a new framework for E/M documentation as well as alternate formats that may ease considerably their use in a variety of clinical situations,” Dickey said. She suggested that the new framework might be available in time for an AMA-sponsored April 27 meeting for representatives of national medical specialty societies, state medical associations, the CPT Editorial Panel and HCFA that has been in the works for a few months.

Dickey also indicated that the grace period currently scheduled to end on June 30 would likely be extended to allow time for pilot testing and education. “We have already begun serious discussions with HCFA about an extension of ... at least an additional six months and are optimistic that we will have a favorable decision.”

We will update you on further developments in the June issue of Family Practice Management.

Billing for NP Services: What You Need to Know

The 1997 Balanced Budget Act (BBA) liberalized Medicare coverage of nurse practitioner (NP) services effective Jan. 1, 1998. Consequently, many practices that don't use NPs are reconsidering that choice, and practices that do use NPs are rethinking how best to use them. Here's what you need to know, regardless of your situation.

What's covered — and when

Medicare covers NP services under two sets of rules: those related to services incident to a physician's care and those related to NP services covered and reimbursed separately, under an NP's own provider number. It's the latter set of rules that the BBA has liberalized. Now Medicare Part B may cover NP services billed separately if these 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 an NP,

  • They are not otherwise excluded from coverage by law,

  • They are performed in collaboration with a physician,

  • State law allows NPs to perform the services.

Medicare also once limited coverage by setting and place of service (i.e., coverage was limited to rural areas or nursing facilities). But under the BBA, Medicare now may cover NP services regardless of the setting or place of service. Also, Medicare may cover services and supplies furnished incident to an NP's covered services.

Although this liberalized coverage took effect Jan. 1, HCFA won't actually begin paying for services billed under NPs' provider numbers until July. HCFA imposed the delay in February to allow time for the agency to program its computers to accommodate the changes in coverage. The delayed payments will include interest.

Who's an NP?

To be considered an NP under Medicare's definition, a provider must meet several conditions. The provider must be a registered professional nurse licensed to practice in the state in which the services are furnished. He or she must meet the qualifications required for NPs in that state. And he or she must meet at least one of the following requirements:

  • The provider must be currently certified as a primary care nurse practitioner by the American Nurses Association or the National Certification Board of Pediatric Nurse Practitioners and Nurses;

  • The provider must have completed a formal educational program (of at least one academic year) that prepares registered nurses for an expanded role in primary care; it must include supervised clinical practice and at least four months of classroom instruction and must award a degree, diploma or certification;

  • The provider must have completed a formal educational program that prepares registered nurses for an expanded role in primary care but doesn't meet the criteria above and must have performed that expanded role for a total of 12 months during the 18-month period immediately preceding Feb. 8, 1978.

What's “collaboration”?

For Medicare, collaboration means “a process whereby an NP works with an MD or DO to deliver health care services within the scope of the NP's professional expertise, with medical direction and appropriate supervision as provided for in jointly developed guidelines or other mechanisms defined by federal regulations and the law of the state in which the services are performed.” Here's the translation: Collaboration is defined in relation to state law and therefore varies somewhat from state to state. Physicians who collaborate with NPs and comply with state law will satisfy Medicare requirements.

Billing for NP services

To bill Medicare for NP services (other than “incident to” services), the NP needs a performing provider number, which you can get from your Medicare carrier.

NPs are allowed either to bill Medicare directly under their own provider numbers or to reassign their billing rights to employers or other contracting entities. For your practice to receive payment for services provided by NPs whom you employ or contract with, the NPs must reassign their payment rights to the practice.

Furthermore, you may need to attach an HCPCS modifier to the CPT codes you bill for NP services. These modifiers include -AK (NP, rural, team member), -AV (NP, rural, not a team member) and -AL (NP, non-rural, team member).

One service, one payment

An NP's services (other than “incident to” services) are reimbursed at 85 percent of the amount shown on the participating physician fee schedule. Note that Medicare will make this payment as long as it has not already paid a facility or provider for the same NP services. For example, when an NP employed by a hospital treats a Medicare patient, Medicare will not pay the hospital under Part B for those services if it has already paid the hospital for the NP's services under Part A. In short, Medicare will not pay twice for the same NP service.

The “incident to” dilemma

By law, Medicare also covers services and supplies furnished as “incident to a physician's professional service, of kinds which are commonly furnished in physicians' offices and are commonly either rendered without charge or included in the physicians' bills.” To be billed as “incident to,” the services of nonphysicians, such as NPs, must meet four criteria:

  • The services must be performed under a physician's “direct supervision”;

  • The services must be performed by employees (including leased employees) of the supervising physician, the physician's group or the physician's employer;

  • The physician must initiate the course of treatment of which the NP's services are a part;

  • The physician must perform subsequent services of sufficient frequency to reflect the physician's continuing active participation in managing the course of treatment.

The BBA didn't change the “incident to” rules related to NP services. This means an NP can still provide, and a practice can still be paid for, services incident to those of a physician. The benefit 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.

However, one of the disadvantages of billing for “incident to” services is that more supervision is required. Because these services require direct supervision, the physician must be in the office suite when the service is rendered and immediately available to provide direction. Reimbursements for NP services billed separately don't require a physician's presence.

The choice may be yours

If you use NPs in your practice, how do you decide whether to bill separately or “incident to”? Ask yourself these questions to guide your choice:

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

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

Finally, consider the relative payment amounts. If you can bill “incident to,” you might as well. There's no reason to discount your practice's reimbursement if you don't have to.

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Copyright © 1998 by the American Academy of Family Physicians.

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