The Balanced Budget Act of 1997: Reimbursement and the Advanced Practice Nurse

William J. Mazzocco Jr.


January 28, 2000

In This Article


Despite these sweeping changes, APNs almost immediately ran into regulatory and interpretation conflicts. Some of these problems were related to the massive enrollment of a large number of neophyte providers and some were secondary to arbitrary interpretation of the legislation by local Medicare carriers. Typically, these problems fell into three broad categories.

1. The first is oversimplification.

The Balanced Budget Act of 1997 has absolutely no effect on other private insurance carriers!

The act only permitted APNs to enroll as Medicare providers. Many new providers presumed they were automatically enrolled with other insurers as well. However, although state law may permit APNs to see patients, that does not mean any insurers are required to pay for these services! Each private insurance plan (ie, Blue Cross) has its own list of authorized providers. It is possible to deal with this issue successfully if the practice properly utilizes "incident-to" billing techniques. "Incident-to" is an archaic billing method that permits the practice to bill for NP services under a supervising physician's billing number at 100% of the physician's fee schedule, as long as the physician is physically in the office at the time the service is rendered. It is important to note that not all insurance companies recognize this method so the APN must verify and comply with the individual insurer's policy guidelines.

2. The second problem is ignorance.

Neophyte providers may be at increased risk of fraud and abuse.

The APN's enrollment into the Medicare program carries with it increased personal responsibility. Medicare has the most aggressive fraud and abuse guidelines of any insurance product. It is imperative that the new provider has a clear understanding of how to bill for services (ie, ICD-9 and CPT coding) and how to use the evaluation and management (E&M) codes. These codes are the only method that the insurance carrier can use to substantiate that the level of service provided was equal to the severity and complexity of the presenting problem. Ignorance is not seen as an acceptable defense!

3. The third issue is regulation and interpretation.

The HCFA has very little enforcement capability over its carriers and individual medical directors have the ability to exercise a wide degree of flexibility in interpreting the regulations.

An extreme example of this occurred when some carriers tried to "down code" E&M services because they were provided by APNs. For example, United Healthcare attempted to down code NPs in Minnesota by suggesting that NPs could not treat complex patients (using codes 99204, 99205, and 99214 or 99215). Both NPs and physician assistants (PAs) countered that claim which has gone to litigation.

HCFA has also indicated a readiness to "modify" the act through its own regulatory process. Before the ink was even dry, HCFA attempted to force APNs to have a practice agreement with a physician in order to bill Medicare for their services, despite the fact that many states do not require an affiliation agreement. Finally, only intense 11th-hour lobbying prevented thousands of NPs from being disenrolled from Medicare because they did not possess a master's degree in nursing (MSN). The act specifies that only a CNS is required to have an MSN.


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