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Weigh the risks and benefits of incident to billing carefully

Issue: August 2012

ByJennifer Van Atta, MS PA-C

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The use of non-physician providers has been a benefit to orthopedic practices for many years. In 2009, the Medical Group Management Association reported that 84% of orthopedic surgery practices used non-physician providers for the provision of patient care services. It was forecasted at that time that in the next 10 years, the growth rate across medicine would be 24% for nurse practitioners and 27% for physician assistants (PAs).

Why the tremendous growth? It has been demonstrated time and again that by using non-physician providers, medical practices can improve productivity levels without significantly increasing costs. In physician-owned multispecialty groups using non-physician providers in 2008, the median total medical revenue per full-time employee physician was $218,281 greater than practices that did not use non-physician providers. Even accounting for increased operating expenses, compensation and benefits, practices that used non-physician providers increased their bottom line by $67,518.

Mid-level providers

Medicare offers a tempting reimbursement scenario that allows non-physician providers, also called mid-level providers, to bill under a physician’s NPI number at 100% of the physician fee rate. This applies to nurse practitioners and PAs, who are commonly used mid-level providers in orthopedic practices. Unfortunately, this provision, called “incident to” billing, is also a commonly misunderstood and misused billing practice and, if not done correctly, can lead to accusations of fraudulent claims and requests for monetary return. In fact, incident to billing recently has come under significant scrutiny by health care agencies. Although submitting incident to billing may not place you at increased risk of audit, you will want to be certain you are billing these visits correctly to avoid exposing your practice to unnecessary financial and compliance risk.

 

Jennifer Van Atta

Incident to billing was originally devised to provide a means for mid-level providers to bill for services customarily provided to Medicare patients without charge, i.e., incidental to the physician’s service. As currently structured, it allows mid-level providers to bill and receive 100% of the physician rate for services rendered to Medicare patients, as though the physician had performed these services. Under incident to billing, the mid-level services are actually billed under the physician’s NPI number and not under their own number. It helps if you remember this concept as incident to billing has a large physician role that must be performed and documented in order to qualify for the 100% reimbursement.

Unfortunately, in the hurry to obtain 100% reimbursement from Medicare for mid-level services, practices will often misunderstand or misapply the conditions for incident to billing. The requirements for Medicare incident to billing are stringent and center around criteria that must be met to qualify for legitimate billing. If any of these criteria are not met, then billing submitted under incident to may be looked upon as a fraudulent claim.

1.Services must be provided in a physician’s office or clinic.

2.The physician must have seen the new Medicare patient for his/her first visit to the clinic and have established a diagnosis and treatment plan.

3.The physician must see established Medicare patients for their first visits for new problems.

4.The physician (or a physician from the group) must be onsite when the PA is seeing the Medicare patient within the suite of offices.

But keep reading – there is more.

Although these are the basic requirements, Medicare specifies a few details that also need to be in place to bill as incident to – things that define the kinds of visits considered acceptable for incident to billing, services not included because they have their own benefit level, context for PA practice within state law, etc.

Your responsibilities

I find it helpful to think about the incident to criteria in a little different format – one organized by area of responsibility.

In order for PAs to bill for Medicare patient care as incident to consider:

1.Location: Services must be provided in the physician’s office or clinic.

2.Physician’s role:

a. Physician must see new Medicare patients for their first visit to clinic and have established a diagnosis and treatment plan.

b. Physician must see Medicare patients with a new complaint for their first visit for the new complaint.

c. Physician or a physician from the practice group must be onsite when the PA is seeing the patient, within the suite of offices, although a physician is not required to see the patient during PA visits.

d. Physician must continue seeing the patient in such a way that it reflects ongoing involvement with the patient’s care.

3.PA’s role:

a. Services provided must be an integral part of the physician’s professional services (i.e., part of the physician’s treatment plan).

b. PA must be a “direct expense” to the physician.

c. PAs may not see new Medicare patients on their first visit to the clinic.

d. PAs may not see established Medicare patients on their first visit for a new complaint.

e. PAs may only practice within their state law’s scope of practice and must be licensed in the state where service is provided.

Criteria c and d only apply if you are seeking to bill incident to. They do not apply if billing under the PA’s NPI number.

In addition, there are a couple things to be aware of when meeting the criteria for incident to billing:

1.Physician initial and new complaint visits must be personal visits – where the physician actually sees and treats the patient, and performs the evaluation and management service. Simply co-signing a PA’s note, briefly meeting the patient, or a co-visit using both the PA and physician, etc., do not meet this requirement. This is perhaps the most misinterpreted and misused aspect of incident to billing.

2.PAs must perform the service in the state where they are licensed to practice, which means they may only practice within their state law’s scope of practice.

3.The requirement of “physician onsite” is sometimes referred to in Medicare language as “direct supervision.” However, this is a different requirement from the supervision levels designated by many states for PA practice. Many states allow PAs to practice under general supervision, where the physician is not required to physically be onsite for any of the services provided. Many clinics are set up this way. However, the general supervision allowed by the PA’s scope of practice under state law does not suffice for the Medicare direct supervision (physician onsite) requirement for incident to billing.

4.These criteria for incident to billing do not necessarily apply to another type of assistant sometimes found in orthopedic practices, the orthopedic physician assistant (OPA). There are some services that an OPA may be able to bill Medicare for incident to a physician’s service. A billing and coding specialist can explain this.

Challenges

Medicare incident to billing has its own set of challenges to meet in return for that 100% physician rate reimbursement. Instead of struggling to meet this stringent criteria on a fail-safe basis, most practices choose to bill for Medicare patients under the PA’s NPI number across the board because, for a small reduction in dollar reimbursement per visit, productivity of the practice increases significantly and offset the reduction. This is because the Medicare incident to guidelines do not apply when your PAs bill for their services under their own NPI numbers. When billing for PA services under the PA’s own NPI number, there are no Medicare-specific new patient or new complaint requirements, and no physician supervision or location requirements; only those requirements you already meet relative to the PAs state supervision and scope of practice. Orthopedic physician assistants cannot bill Medicare for Part B covered services as a provider.

Is incident to billing worth the risk of audit and potential allegations of false claims due to practice habits that do not conform to criteria? Many people think not. In an age of increasing government participation in health care, audits, investigations, overpayment demands, multiple clinic sites and busy physician schedules, many practices believe the Medicare criteria for incident to billing are cumbersome and not worth the overall cost. But in your practice, this may be different.