How to Bill for Nurse Practitioner Services: The Basics

Carolyn Buppert, MSN, JD

Disclosures

April 07, 2020

Billing for nurse practitioner (NP) services is a complex jumble of rules, policies, laws, and exceptions. Those who employ NPs have billing options, but it can be hard to determine what is best for any one medical practice. This introduction to billing for NP services distills the essential rules, explaining the significant differences between direct and incident-to billing.

Carolyn Buppert, MSN, JD, Healthcare attorney

Billing Medicare

For physician services, Medicare pays 80% of the patient's bill and the patient pays 20%. Medicare reimburses NPs at a rate of 85% of the physician fee, as stated in Medicare's Physician Fee Schedule. So, Medicare pays the NP 80% of the 85% of the Physician Fee Schedule rate for a procedure. The total amount that the practice receives is the Medicare payment plus the patient's payment.

For example, assume that the Physician Fee Schedule rate for a particular service is $100. If a physician performs the service, Medicare pays the physician $80; the patient pays $20. If an NP performs the service, Medicare pays the NP $68 (85% of $80), and the patient pays the NP $17.

Incident-to Billing: Billing an NP's Service Under a Physician's Provider Number

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, in which services provided by a supervised employee, under certain circumstances, can be submitted under a physician's provider number. If billing an NP's services "incident to" a physician's service, practices may be reimbursed at 100% of the Physician Fee Schedule rate.

If an NP and a physician work together to provide physician services, the services can be billed under the physician's provider number to get the full physician fee, under the Medicare provision for "incident-to billing." However, certain rules must be followed when billing services under the incident-to provisions. The rules on incident-to billing differ, depending on the location where the services are provided. The rules for billing visits provided in a physician office or clinic are:

  1. The services are an integral, although incidental, part of the physician's professional service.

  2. The services are of a type commonly furnished in physician's offices or clinics.

  3. The services are furnished under the physician's direct personal supervision and are furnished by the physician or by an individual who is an employee or independent contractor of the physician. Direct supervision does not require the physician's presence in the same room, but the physician must be present in the same office suite and immediately available.

  4. The physician must perform "the initial service and subsequent services of a frequency which reflect his or her active participation in the management of the course of treatment."

  5. The physician or other provider under whose name and number the bill is submitted must be the individual present in the office suite when the service is provided.

The rules on incident-to billing are stated in the Medicare Claims Processing Manual (Chapter 12, Section 30.6.4).

If the services are provided in a hospital, whether to inpatients, outpatients, or those in an emergency department, the rules on "shared visits" govern when an NP's services may be billed under a physician's name. Under Medicare's rules on shared visits, a physician in the same group as an NP may bill for the services of the NP if the physician has visited the patient the same calendar day and recorded a face-to-face visit. The rules on shared visits are found in the Medicare Claims Processing Manual (Chapter 12, Section 30.6.1.B)

Incident-to billing: appropriate use scenario. A physician seeing a patient in the office evaluates a patient, and diagnoses hypertension. The physician initiates treatment. The physician employs an NP. The NP conducts follow-up visits with the patient, monitoring and treating the hypertension over weeks, months, or years. The physician sees the patient every third visit, under a policy adopted by the practice. The NP's work may be billed under the physician's provider number, and the practice will receive 100% of the Physician Fee Schedule rate for the services performed by the NP.

Incident-to billing: inappropriate use scenario. If the scenario described above continued, but one day the hypertensive patient arrived for a follow-up visit with the NP and announced a new complaint—a persistent cough, for example—incident-to billing would be inappropriate. The physician has not performed the initial service relating to the cough. The options for appropriate billing when a practice wants to bill incident-to and a patient comes in with a new problem are (1) have a physician evaluate the new symptom; (2) bill the entire visit under the NP's name; and (3) bill incident-to, but only for the level of service required to evaluate and manage the hypertension—that is, the diagnosis that the physician initiated.

Incident-to billing: illegal use. A physician employs an NP to work in a satellite office. The physician is never present. Incident-to billing is illegal, because the requirements are not met. However, the NP services may be billed under the NP's provider number, and Medicare will pay 85% of the physician rate for the services.

Billing an assistant's services under an NP's provider number. A medical practice may bill the services of a non-nurse practitioner—a nurse or medical assistant, in some cases—incident to an NP's services (ie, bill an assistant's services under an NP's provider number), if the rules for incident-to billing are followed. For example, if an NP sees a patient and wants the patient to return in 2 weeks for a blood pressure check, and a nurse or medical assistant takes and records the blood pressure, the NP may bill for the visit as if the NP had performed it, under the incident-to billing provision.

Services for Which an NP Can Bill Medicare

Medicare operates four parts, two of which—A and B—are relevant to this article. 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. Medicare defines "physician services" as diagnosis, therapy, surgery consultation, and care plan oversight. Physician services are those that can be described by a Current Procedural Terminology (CPT) code and an International Classification of Diseases, 10th revision (ICD-9), code.

NPs may bill Medicare Part B for services that would be considered physician services if performed by a physician, but which are performed by an NP and if that service is permitted by the NP's scope of practice.

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, such as changing a wound dressing, but are not "physician services" are not covered under Medicare Part B. For a list of noncovered services, contact the local Medicare Carrier.

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." Physicians and NPs must coordinate billing to avoid seeking duplicate payments.

Applying Physician Billing Rules to NPs

The laws and guidelines applicable to physicians billing Medicare also apply to NPs. Those rules include the following:

  • Services must be medically necessary;

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

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

  • The entity seeking payment must submit a claim, appropriately completed;

  • The entity seeking payment must accept Medicare's rates;

  • Providers may not provide monetary or nonmonetary compensation in return for referrals;

  • Services must be billed under the provider number of the clinician rendering the service; and

  • Medicare will pay only certain parties.

Reassignment

In cases of reassignment, Medicare will pay only specified parties.

Medicare's rule on reassignment require that Medicare pay only the NP, the NP's employer, a facility that has contracted with the NP, or an organized healthcare delivery system. These payments can only be made 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 that has an independent contractor relationship with an NP may be paid under the provision for an organized healthcare delivery system.

Home Visits Conducted by an NP

Because NPs are authorized by law to perform both nursing and physician services, it is important to keep the distinction clearly in mind when an NP makes a home visit. If an NP is performing a service in the home billable to Medicare Part B as a physician service—in general, a service described by a code found in CPT made necessary by a diagnosis described by an ICD-10 code—the NP could bill Medicare under the NP's provider number. However, if an NP is providing nursing services—billable under Medicare Part A—the NP would need a physician's order for the home visit, the visit would need to be conducted through a home care agency enrolled as a Medicare provider, and the bill would be submitted by and paid to the agency under the prospective payment system.

An NP may bill Medicare for physician services performed in a nursing home with the following provisos:

  • An NP may perform the admission evaluation—the comprehensive evaluation—in a long-term care facility only if state law authorizes an NP to perform that function and only if a physician delegates that function to an NP. Otherwise, a physician must do the admission evaluation. In a skilled nursing facility, a physician must perform the admission evaluation.

  • In a skilled nursing facility, an NP may alternate conducting "required physician visits" (ie, a visit every 30 days for the first 90 days after admission, then once every 60 days) with a physician. Additional requirements are that the state must authorize the NP to do so, the NP must not be employed by the nursing facility, and the NP must be working in collaboration with a physician.

  • An NP may conduct and bill for visits to evaluate and manage illnesses, as medically necessary.

An NP may provide physician services to a hospitalized patient if the services are within the scope of practice of an NP under state law, or, in some states, if a physician delegates to the NP the authority to perform the services.

NPs are not free to take over the care of hospitalized patients on their own, however, even in states where NPs have full practice authority (ie, in states where physician collaboration is not required). A physician must be involved in the process of care for hospitalized patients because under federal law governing hospitals—Medicare conditions of participation—a hospital must require that "every patient be under the care of a physician."

The general conditions for billing Medicare for physician services performed by NPs in hospitals are:

  1. The services must be billed under the NP's provider number, unless the entity doing the billing is following Medicare's rules on "shared visits." If those rules are followed, the services may be billed under the physician's provider number. The rules on shared visits require that the NP and physician be in the same group, and that the physician, as well as the NP, perform and document a face-to-face visit with the patient that calendar day. The rules on shared visits apply to hospitalized patients, and those seen in the emergency department and outpatient clinics of a hospital.

  2. If the services an NP is providing are part of a surgical or maternity package, reimbursed under a global fee, and if a surgeon or obstetrician has billed the global fee, then the NP's services may not be billed, because the surgeon or obstetrician already has billed those services. However, when a service is reimbursed under a global fee, there are mechanisms for transferring care and for separating the components of the global fee, which would allow an NP's services to be billed.

  3. Hospitals should not include NP costs in the hospital's cost report.

Reimbursement Under Medicare Advantage 

The laws addressing Medicare Advantage (the Medicare managed care program) do not specifically address NPs. Reimbursement from Medicare to a managed care plan and from a managed care plan to a physician or physician group is made under the terms of contracts between Medicare and managed care plan and between managed care plan and physician group. In general, a managed care plan reimburses only those providers admitted to the organization's provider panel. Many managed care plans admit NPs to provider panels; some do not. Some managed care plans will pay for services rendered by NPs if delegated by a physician who is on the provider panel; others will not.

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