MedPAC Wants to End 'Incident-to' Billing by APRNs, PAs

Kerry Dooley Young

June 24, 2019

WASHINGTON — Medicare should end a policy that lets medical practices bill at higher physician rates for services provided by certain other members of medical teams, an influential panel said.

In an annual report to Congress, released June 14, the Medicare Payment Advisory Commission (MedPAC) recommended eliminating "incident-to" billing for advanced practice registered nurses (APRNs) and physician assistants (PAs). Instead, APRNs and PAs should consistently bill Medicare directly under their own national provider identifier for the services they provide, MedPAC said.

Medicare pays 85% of the amount set in the physician fee schedule when nurse practitioners (NPs) and PAs bill directly for the services they provide to people enrolled in the federal health program. Under certain conditions, though, those services may be billed by supervising physicians as being "incident to" their care, generating reimbursement at 100% of the physician fee schedule rate, MedPAC said.

Ending incident-to billing could reduce Medicare spending by $1 billion to $5 billion over the first 5 years following the implementation of this policy change, MedPAC said. First-year savings alone could be $50 million to $250 million, MedPAC said. In contrast, some medical practices "would experience a decline in revenues" because of the change, MedPAC said.

Divergent Reactions

The proposal elicited diverging reactions in the medical community. The American Medical Association (AMA) opposes the proposal to end incident-to billing. In a statement provided to Medscape Medical News, the AMA described its opposition in terms of a concern about fracturing the team approach increasingly used in patient care.

"Nurse practitioners and physician assistants are valuable members of this team, and patients win when each member of their health care team plays the role they are educated and trained to play," the AMA said.

The AMA described the MedPAC proposal as a step toward more autonomous practice by APRNs and PAs.

This "approach would further compartmentalize and fragment health care delivery; while team-based care fosters greater integration and coordination," the AMA said. "That is why the AMA opposes the independent practice of nurse practitioners and physician assistants."

The MedPAC proposal was strongly endorsed by groups representing APRNs and PAs.

The American Association of Nurse Practitioners (AANP) told Medscape Medical News that it "applauds" the MedPAC proposal. "We urge Congress to act on this recommendation as soon as possible," said Joyce Knestrick, PhD, president of AANP.

The American Academy of Physician Assistants (AAPA) said in a statement that Congress should act on MedPAC's recommendation. According to a June 17 statement, Jonathan E. Sobel, DMSc, MBA, president and chair of the AAPA's board of directors, said incident-to billing can hide "the volume, types, or quality of medical services PAs deliver to patients.

"Transparency in health care is essential to ensure that data and information provided to patients, health professionals, policymakers, and researchers is accurate and actionable," Sobel said.

Outdated Policy?

MedPAC members and staff have depicted incident-to billing as an outdated policy that adds extra costs and that it muddies the picture of how the nation's seniors get their medical care.

"Incident-to billing is a relic of the Medicare of the late 1960s, where the program was completely passive," MedPAC member Paul Ginsburg, PhD, said at the panel's October 2018 meeting. "It just wanted to pay bills for whatever was going on.

"We have a different Medicare today," added Ginsburg, who also is a researcher with the nonpartisan Brookings Institution. "We have a Medicare that's more accountable, that's more interested in quality issues, that wants to know what's going on in the program."

Medicare currently covers about 64 million people aged 65 years or older or who have disabilities, according to the nonprofit Kaiser Family Foundation.

Of this population, about 42 million remain in traditional fee-for-service Medicare, for which the proposed elimination of incident-to billing would apply. About 22 million people are enrolled in Medicare Advantage (MA) plans, in which insurers set reimbursement policies. MA plans sometimes but not always follow fee-for-service incident-to rules, MedPAC analyst Brian O'Donnell, MPP, told the commission at a December meeting.

MedPAC said its recommendation would not change the coverage of any services or any state supervision or collaboration requirements. It is not intended to alter how healthcare is delivered but to reflect the expanded role of APRNs and PAs, according to MedPAC. State governments in recent years have steadily increased the scope of practice for NPs and PAs, allowing them increased authority and autonomy, MedPAC said.

Members of MedPAC said during deliberations on the recommendation that APRNs and PAs can play a key role in helping patients live healthier lives, which includes changing habits to avoid or better manage diseases such as diabetes.

"We're trying to focus healthcare on issues that extend beyond the four walls of the healthcare setting to where patients live and work, helping them with the behavior changes that they need in order to manage a chronic condition they already have or prevent one that they are at risk for," MedPAC member Dana Gelb Safran, ScD, said at the October 2018 meeting.

MedPAC staff and members of the panel spent months developing this recommendation as part of its June 2019 report to Congress. Each year, MedPAC uses its June report to suggest broad changes in Medicare intended to reduce costs and improve care. MedPAC's March report examines whether Medicare's existing set of annual payment rules and policy updates require changes.

Report May Influence Legislation

Lawmakers have no obligation to act on any of MedPAC's recommendations, but members of Congress and the staff of key House and Senate committees pay close attention to the commission's well-regarded reports. MedPAC's work in recent years has influenced not only major health laws but also budget deals. Lawmakers sometimes seek to balance extra funding for other federal programs with reductions in Medicare spending. Citing MedPAC's work helps lawmakers bolster the case for such cuts.

In discussions about the proposed recommendation, MedPAC members had considered how this billing change might affect medical practice and access to care. NPs and PAs are playing an increasingly large role in the care of older Americans, with much of their care billed directly by them to Medicare.

In 2010, about 8.4 million people who were enrolled in Medicare's traditional fee-for-service program received at least one service that was billed by an NP or a PA. This represents roughly 26% of this population, MedPAC said. By 2017, the number had increased to 16.0 million beneficiaries, or 48%.

The observed growth in this field supports MedPAC's view that the proposed elimination of incident-to billing would not make it more difficult for older Americans to find primary care, according to the report.

"Most of these clinicians' services are already paid at this lower rate, and yet the supply of these clinicians has increased dramatically over the last several years," MedPAC said.

Incident-to billing for APRN and PA services imposes an administrative burden on practices, said Michael Powe, AAPA's vice president of reimbursement and professional advocacy, in a June 17 blog post. Incident-to billing only applies in the office or clinic setting and requires that certain additional conditions be met. He said these include ensuring that physicians treat patients during initial visits for a specific medical condition and that they be on site when a PA or APRN renders a follow-up service.

Shedding the administrative burden of incident-to billing thus could offset revenue that would be lost if Congress were to act on MedPAC's recommendation, Powe wrote. He also said incident-to billing can confuse patients who receive Medicare summary notices (MSNs) that list a healthcare professional who did not treat them.

"The MSN may list the name of a physician when the patient had all of their care delivered by a PA," Powe wrote. "In addition, a patient's test results may be misdirected to a physician when the results should be directed to the PA who is treating the patient."

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