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

Carolyn Buppert, NP, JD

Disclosures

January 31, 2002

In This Article

More Payer Considerations

Services for Which a Physician Can Bill Medicare

Medicare operates 2 programs, Medicare Part A and Medicare Part B. Part A covers hospitalization, skilled nursing facility services, and some home health services. Part B covers physician services, outpatient hospital services, laboratory procedures, medical equipment, and some home health expenses.

NPs may bill Medicare Part B for services which would be physician services if performed by a physician, but which are performed by an NP. Medicare defines physician services as diagnosis, therapy, surgery consultation, and care plan oversight. Specifically, physician services are those that can be described by a Current Procedural Terminology (CPT) code[5] and an International Classification of Diseases, 9th revision (ICD-9) code.[6]

A service that does not meet Medicare's definition of a "physician service" will not be reimbursed. For example, health services that are within the realm of nursing but are not "physician services" are not covered under Medicare Part B. Furthermore, Medicare does not reimburse for all physician services. For example, regular physical examinations, health maintenance screening, and counseling for well patients are assumed by the general public to be physician services, but these services are not within Medicare's definition of covered services. For a list of noncovered services, contact the local Medicare Carrier. Contact information is available online at http://www.medicare.gov/Contacts/Home.asp.

Medicare Requirement for Collaboration

Federal law defines "collaboration" as "a process in which a NP works with a physician to deliver health care services within the scope of the practitioner's professional expertise, with medical direction and appropriate supervision as provided for in jointly developed guidelines or other mechanism as defined by the law of the State in which the services are performed."[7] States vary in their requirements for collaboration between physician and NP. Information on State Boards of Nursing is available online at http://www.ncsbn.org/public/regulation/nursing_practice_acts.htm.

In 8 states, there is no requirement that an NP have a formal agreement with a physician or other healthcare provider promising collaboration or supervision. For example, Oregon law states: "The nurse practitioner is responsible for recognizing limits of knowledge and experience, and for resolving situations beyond his/her NP expertise by consulting with or referring clients to other health care providers."[8] However, most states require NPs to have a collaborative agreement with a physician. And, while Medicare generally defers to state law requirements, Federal law requires that an NP billing Medicare have a collaborative relationship with a physician. So, even in Oregon, an NP must establish a collaborative connection with a physician. For the law of each state on collaboration requirements, query the state board of nursing.[9]

NP Services as Defined by Medicare

Medicare defers to states' laws authorizing the scope of practice of NPs (ie, the types of services an NP may perform under state law). Each state defines the scope of practice for NPs in its nurse practice act. For scope of practice, contact the state board of nursing.[9]

For example, Oregon law states: "The NP is independently responsible and accountable for the continuous and comprehensive management of a broad range of health care, which may include:

  • promotion and maintenance of health

  • prevention of illness and disability

  • assessment of clients, synthesis and analysis of data and application of nursing principles and therapeutic modalities

  • management of health care during acute and chronic phases of illness

  • admission of his/her clients to hospitals and long term care facilities and management of client care in these facilities

  • counseling

  • consultation and/or collaboration with other care providers and community resources

  • referral to other health care providers and community resources

  • management and coordination of care

  • use of research skills

  • diagnosis of health/illness status

  • prescription and/or administration of therapeutic devices and measures including legend drugs and controlled substances...consistent with the definition of the practitioner's specialty category and scope of practice."[8]

Some states' laws are more vague than Oregon's. For example, South Carolina law states: "The Nurse Practitioner, Clinical Nurse Specialist functioning in the extended role, or Certified Registered Nurse Anesthetist is subject, at all times, to the scope and standards or practice established by the nationally recognized credentialing organization representing the specialty area of practice, and must function within the scope of practice of the South Carolina Nurse Practice Act and shall not be in violation of the South Carolina Medical Practice Act. The scope and standards of practice for each specialty area of nursing practice shall be on file in the Board office and available upon request."

[10]

The variation and vague language in state laws led the federal agency responsible for prosecuting Medicare fraud to complain that "most scopes of practice contain only a general statement about the responsibilities, educational requirements and a non-specific list of allowed duties and do not explicitly identify services that are complex or beyond their scope. Carriers voice concerns over non-physician practitioners performing such services as surgery and endoscopies. Further, when a service is not addressed in a scope, it cannot be assumed that a non-physician practitioner cannot provide that services."[11] Nevertheless, the CMS continues to defer to state laws on scope of practice. Any recent attempts by NPs or physicians to change or clarify state scope of practice laws[9] have resulted in costly and embarrassing turf battles.

Prohibition Against Dual Payments

Occasionally, services performed by a physician and services performed by an NP for the same patient on the same day may overlap. Medicare requires that a practice or facility billing Medicare for NP services ascertain that "no other facility or provider has charged for the furnishing of services." Physician practices and NPs must coordinate billing to avoid seeking duplicate payments.

Practice employs physicians and NPs. Potential for overlap of physician and NP services occurs when a medical practice employs an NP to evaluate, manage, and provide consultations on hospitalized patients. A physician employed by the practice may evaluate the same hospitalized patient as the NP on the same day, and perform some of the same history, examination, and medical decision-making services. The practice may submit only 1 charge for those services. The practice may bill under either the physician's provider number or the NP's provider number. If the NP has performed more extensive services than the physician, it is appropriate to bill the services under the NP's provider number, under an appropriately high-level consultation code, knowing that the reimbursement will be at 85% of the physician rate. Alternatively, the practice may choose to bill the services under the physician's provider number under a lower-level consultation code, and get 100% of the rate published in the physician fee schedule. The choice is up to the practice, as long as the services are billed only once.

Hospital is reimbursed for NP's salary through Medicare, Part A. There is potential for billing NP services when a hospital employs an NP to provide a variety of medical services to inpatients. There also is potential for double billing. The hospital must make a choice about the method of seeking reimbursement from Medicare for the NP's services. If a hospital includes the NP's salary on the Medicare cost report (seeking payment under Medicare Part A) and if the hospital receives any reimbursement under that cost report, then the hospital may not bill the NP's services to Medicare under Medicare Part B (physician's services). On the other hand, if the NP's salary is not on the cost report, or the hospital receives no reimbursement from Medicare under the cost report, then the hospital may bill Medicare for the NP's services to patients as physician services under Medicare Part B, assuming no other provider has billed those services.

In the past several years, the Medicare payment system for hospitals has gradually changed from reimbursement for reasonable costs (as stated in annual cost reports) to prospective payment based on diagnostic related groups. As hospitals have diminished opportunity to recoup NP salaries under the cost reports, it becomes more important to bill NP services where possible under Part B.

Applying physician rules to billing NP services. The laws and guidelines applicable to physicians billing Medicare apply to NPs. Those rules include:

  1. Services must be medically necessary;

  2. Services must have been provided as billed, as supported by the medical record;

  3. The clinician providing the service must have a Medicare provider number;

  4. The entity seeking payment must submit an HCFA 1500 form (available online at http://www.hcfa.gov/medicare/edi/edi5.htm#Form) appropriately completed;

  5. The entity seeking payment must accept Medicare's rates;

  6. Providers may not provide kickbacks for referrals**;

  7. Services must be billed under the provider number of the clinician performing the service; and

  8. Medicare will pay only certain parties.

Reassignment: Medicare will pay only specified parties.

Medicare's rule on reassignment requires that Medicare pay only the NP, the NP's employer, a facility that has contracted with the NP, an organized healthcare delivery system if there is a contractual arrangement between the organization and the NP, a physician under a locum tenens arrangement, a government agency, or a billing service working under contract with an NP. A medical practice, which has an independent contractor relationship with an NP, may be paid under the provision for an organized healthcare delivery system.

[12]

Obtaining a provider number. NPs, like physicians, apply for Medicare provider status by filling out and submitting an application form. The form is available at http://www.hcfa.gov/medicare/enrollment/forms/. While awaiting action on the NP's provider application, the practice should hold bills until the provider number arrives, then fill in the number and submit.

** It is illegal to solicit, pay, offer, or receive any remuneration, in cash or in kind, for the referral or to induce the referral of a patient, or for ordering, providing, recommending or arranging for the provision of any service payable by federal healthcare programs. The federal antikickback rules apply to nurse practitioners.

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