Maximizing reimbursement for physician assistant services

Is Medicare's 85% reimbursement rule fair?
Is Medicare's 85% reimbursement rule fair?

Washington, D.C. --  Physician assistants have a responsibility to ensure the care they provide is accurately reimbursed, although they often do not see insurance claims for their services or participate in the claims submission process, according to a speaker at IMPACT 2013.

“The old rule was if it isn't documented in the patient's chart, it didn't happen – and that's still true. But now there's a new rule – if it isn't medically necessary payers will often try to disallow payment,” Michael L. Powe, Vice President of Reimbursement and Professional Advocacy at the American Academy of  Physician Assistants (AAPA) told a packed audience.

Currently, there are four private companies called recovery audit contractors that conduct post-payment audits on U.S. medical services, making between 9% and 12.5% of the money they save insurance providers when they find a payment mistake.  

When fraud and abuse is detected – whether unintentionally, resulting from confusion, or as the product of a conspiracy – the consequences are serious. Retribution can range from revoked reimbursement fees to civil monetary penalties as high as $10,000 per incident to exclusion from government-related healthcare programs, such as Medicare and Medicaid.

But PAs can take several steps to protect themselves, according to Powe, by familiarizing themselves with the policies of both the state and the facility in which they practice, as well as readily available information on the current procedural terminology (CPT) codes that describe the services PAs deliver.

This is becoming particularly important as current international classification of disease (ICD)-9 codes transition to more specific ICD-10 codes in October 2014, effectively growing from 13,000 code sets to 68,000 code sets, according to Powe.

To make things even more complicated, the healthcare landscape is changing rapidly to meet healthcare reform requirements, with states establishing state health insurance exchanges, and federal agencies enacting insurance market reform, as well as expanding and enhancing Medicaid payments.

All of these developments occurring at once present significant challenges. But it also offers PAs more opportunities to play active roles in improving the quality of healthcare.

“Whether it's called an accountable care organization, primary care medical home, or shared savings model – the particular name of the evolving care model does not matter,” Powe said. “What's more important is understanding the conceptual framework surrounding those models and that PAs are front and center to participate and lead.”

Medicare Payment Percentage & “Incident To” Billing

For virtually all services in all settings, Medicare will cover PAs at 85% of the physician fee schedule, as long as state law and hospital requirements are met.

Using the PA's National Provider Identifier (NPI) triggers the 85% payment rate, but a billing work-around exists that enable practices to collect the full 100% physician rate for services that PAs perform.

“Incident to” billing is an office-based mechanism that allows healthcare providers to bill physician assistant services under the doctor's name and provider number at full 100% reimbursement.

“'Incident to' billing has no real place in the hospital setting. It has no real place in the nursing home setting. It's in the private office or clinic where it's really useful,” Powe said. “But it has a unique meaning depending on whether the payer is public or private.”

This billing mechanism requires that the physician personally treat the patient for a particular medical condition presented, and provide the diagnosis and treatment plan. This includes taking the history of personal illness, performing the physical examination and engaging in medical decision making.

PAs may provide subsequent follow-up care for that same condition without the personal involvement of the physician, but at least one physician in the group must be physically present in the suite of offices where the PA delivers care in order to use “incident to” billing.

However, certain situations may arise in which one condition is billable “incident to” a physician and another is diagnosed by a PA, Powe explained.

For example, if a patient previously diagnosed with chronic kidney disease by a physician sees a PA for CKD follow-up, but then complains of a new set of symptoms that require the PA to make an independent diagnosis and come up with an additional treatment plan, the CKD follow-up qualifies for “incident to” billing, but the second diagnosis does not.

Private Payers

It is important to remember that “incident to” billing requirements are not the same for private payers as Medicare (with the exception of Aetna, which has adopted the same policy as Medicare).

“The bottom line is that private payers have their own rules and regulations, but they are typically not as regulatory heavy as is Medicare,” Powe said.

Under many private payers, it is not fraud to bill under the physician as long as it is the payer's required method of PA recognition.

“I hear people ask ‘How can I do that? The doctor never saw the patient, never had any interaction with the patient, and yet I can still bill this service under the physician?'” Powe said. “But that's exactly right if that is what is written in the third party payer's policy.”

This makes it very important for PAs to obtain written policies from private payers to assure “incident to” billing is appropriate. Powe suggests PAs identifying the top three private payers in the region where they practice and obtain a written policy to keep in their file.

“If there is not something on the payer's website that you can print out or if you can't get something in writing I'd be very concerned about how my services are billed for a given payer. Get the facts and get it in writing,” he said. “Relying on verbal hearsay will not protect you.”

Deciding which billing options to pursue

If a practice decides to pursue “incident to” billing for PA services, be sure the appropriate guidelines are being followed.

Remember that PAs can always treat new Medicare patients and new medical conditions when billing under their name and NPI, and restrictions only exist when attempting to bill “incident to” the physician for 100% reimbursement.

It many situations it makes sense for PAs to bill at 85% reimbursement. “If you don't have to go grab a doctor out of an exam room, you will likely have a much more efficient practice, and perhaps can earn the same amount of money that you would have billing ‘incident to' the physician,” Powe said.

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