Decoding PA Reimbursement Guidelines for Medicare

I get a lot of questions from physicians, administrators, and others about not only the utilization of physician assistants (PA) in the healthcare system, but also the process of reimbursement for their services. This year, I plan to do a series of blogs specifically related to reimbursement for healthcare services provided by PAs. Hopefully, this information will help physicians better understand this issue and more accurately and efficiently bill for the healthcare services provided by the PA with whom they work.

It is well documented that PAs work with physicians to ensure the best possible care for patients in every practice setting. The rigorous training of PAs in medical education, versatility, and commitment to personalize care helps practices function more efficiently while providing increased revenues and enhanced continuity of care to patients.

There are several types of third-party reimbursement avenues available for PAs. Contributing to the reimbursement challenges is the issue that each payer has its own guidelines regarding service coverage and payment. In this blog, I'm going to cover how physician assistants can be covered through Medicare for services in various clinical settings.

Coverage of PAs by Medicare was first authorized by the Rural Health Clinic Services Act of 1977. Over the subsequent decades, Congress incrementally expanded Medicare part B payment for services provided by PAs, authorizing coverage in hospitals, nursing facilities, rural health professional shortage areas, and for first assisting in surgery.

In January 1998, legislation was passed that allowed for the PA's employer to be reimbursed in all settings at 85 percent of the physician’s fee schedule for services provided by the PA. The claim for payment is submitted at the full physician rate and the PA’s national provider identification (NPI) number on the claim alerts Medicare to reduce the payment to 85 percent of the physician’s fee schedule. Hospitals that employ PAs must bills for their clinical services under Medicare part B.

A lot of confusion arises out of the “incident to” provision of Medicare. There is a more restrictive set of billing guidelines which, if met, allow payment at 100 percent of the physician’s fee schedule. Here are the requirements:

1. The physician personally treats and establishes the diagnoses for Medicare patients on their first visit for a particular medical problem (PAs may provide the subsequent care);

2. The physician is physically onsite when the PA provides subsequent care; and

3. Established Medicare patients with new medical problems are personally treated and diagnosed by be physician (PAs may provide the subsequent care).

The devil is in the details with incident to billing. The providers themselves are responsible for any errors in billing. The billers for your practice must understand the rules governing incident to billing or you may be the target of an investigation, paying back over billed amounts, and paying fines.

Many practices opt to avoid all of these pitfalls by just sticking with the 85 percent reimbursement level for PAs. However, if your practice can be set up in such a way that you can meet all of the above criteria for incident to billing, you get a 15 percent bonus for your efforts.

There is a set of rules that deal with "shared visits” specifically for inpatient care. This means that if both the physician and the PA deliver care to the same patient on the same calendar day, the physician can bill for the combined services that they delivered on one claim. Both the physician and the PA must be employed by the same practice, group, hospital or corporate entity. However, PAs may be W-2 or leased employees. The employer/physician must still bill Medicare for the services provided by the PA.

Everything that you do when billing Medicare needs to be supported by the documentation. Especially when dealing with shared visit billing. If it isn't documented, it didn't happen and you were at risk for having the claim denied, or when audited, having to pay back the money that you received in reimbursement.

A couple of final details. All healthcare professionals who transmit or receive healthcare information electronically must have a NPI number. The NPI number is the identification number used by public and private third-party payers. It replaces Medicare's PIN, UPIN and the various provider numbers issues by all other payers. An NPI number can be obtained at https://nppes.cms.hhs.gov. All PAs and physicians who treat Medicare patients should enroll in the Medicare program by submitting the appropriate 855 application to their local Medicare carrier or Medicare administrative contractor. You'll need your NPI number for this application.

The reimbursement side of the business of medicine is critical to making physician-PA teams efficient and effective in treating patients. For more information, see the AAPA’s reimbursement page.