Billing For Nurse Practitioner Services: Guidelines for NPs, Physicians, Employers, and Insurers

Carolyn Buppert, NP, JD


January 31, 2002

In This Article

NP Services: Reimbursement Basics -- The Payers

The categories of third-party payers who may reimburse for NP services are:

  • Medicare

  • Medicaid

  • Commercial indemnity insurers

  • Commercial managed care organizations (MCOs)/health maintenance organizations

  • Businesses or schools wanting health services for employees or students

Each of these categories of payers and each of the commercial insurers has different rules on reimbursing NP services. The basics for each category of payer are described below.

Medicare Considerations

Medicare's rules for NPs. Medicare pays NPs under the following terms and conditions:

  1. The NP meets Medicare qualification requirements;

  2. The practice or facility accepts Medicare's payment, which is 85% of the physician fee schedule rate for bills submitted under an NP's provider number*;

  3. The services performed are "physician services" or those for which a physician can bill Medicare[4];

  4. The services are performed in collaboration with a physician;

  5. The services are within the NP's scope of practice as defined in state law; and

  6. No facility or other provider charges or is paid with respect to the furnishing of the services.

Each of these rules or conditions is explained in greater detail below.

Medicare qualifications for NPs. To qualify as an NP eligible to become a Medicare provider, an individual must hold a state license as an NP and be certified as an NP by a recognized national certifying body. The recognized NP national certifying bodies are:

Effective January 1, 2003, individuals applying for Medicare provider numbers as NPs must possess a master's degree from an NP program, as well as national certification and state licensure.

Medicare pays NPs 85% of physician rate. Medicare pays 80% of the patient's bill for physician services and the patient pays 20%. Medicare reimburses NPs at a rate of 85% of the physician fee, as stated in Medicare's Physicians Fee Schedule.† So, Medicare pays NPs 80% of the 85% of the Physicians Fee Schedule rate for a procedure.

For example, assume the Physicians Fee Schedule rate for a particular service is $100. If a physician performs the service, Medicare pays the physician $80; the patient pays the physician $20. If an NP performs the service, Medicare pays the NP $68; the patient pays the NP $17.

* In general, Medicare requires that practices bill services under the provider number of the individual clinician performing the service. However, Medicare rules allow "incident-to" billing -- submitting bills under a physician's provider number for services provided by a supervised employee -- under certain circumstances. If billing an NP's services "incident to" a physician's service, practices may be reimbursed at 100% of the Physicians Fee Schedule rate. To submit bills under the "incident-to" provision, certain rules must be followed. See "Incident-to Billing: Billing an NP's Service Under a Physician's Provider Number," below.
The US Department of Health and Human Services, Center for Medicare and Medicaid Services, publishes the Physicians Fee Schedule annually. It appears in the Federal Register, and Medicare providers can request copies from their local Medicare carrier.


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