Use of physician extenders poses coding problems for practices

Doctors hiring physician assistants and nurse practitioners should keep in mind that billing requirements for their services may vary.

By Julie A. Jacob, amednews staff. Feb. 26, 2001.

Many physicians are using the increasing number of nurse practitioners and physician assistants to help them increase productivity. However, their presence also may increase confusion over how to bill Medicare and commercial insurers.

The number of physician assistants in the United States, currently about 66,000, is expected to grow 48% by 2008, according to the federal Bureau of Labor Statistics. Likewise, the number of nurse practitioners, currently about 70,000, is also increasing, according to the American Academy of Nurse Practitioners.

However, if a physician chooses to employ physician extenders in his or her practice, it's important to be aware of Medicare and commercial insurer requirements for billing for services performed by physician extenders. Billing regulations for physician extender services vary from insurer to insurer. In addition, physician extender billing requirements may also vary for the same insurer depending on the type of service the physician extender performs.

The Kentucky Medical Assn. has received numerous inquiries from physicians who are confused about how to bill for services performed by physician extenders who work in their practices, said Pat Paget, the KMA's communications director.

The Texas Medical Assn. has also gotten many phone calls from doctors who are unsure of how to bill for physician extender services, said Teresa Devine, TMA's director of health care financing. In fact, the TMA received so many questions regarding billing for physician extender services that it held a series of workshops on the issue.

The experience of family physician Baretta Casey, MD, who has a solo practice in Pikeville, Ky., illustrates the maze of different billing guidelines for physician extender services she encountered when she hired a physician assistant last summer. One insurer wanted physician extender services to be billed under the physician extender's own provider number, while another wanted the physician assistant's services billed under the physician's provider number as services "incident to" the physician's services.

"Every insurer has a different application form; the policy by which you code is different, and there's no set standard," said Dr. Casey.

Physician extender billing guidelines

Although the best way to find out exactly how to code and bill for physician extender services is to contact commercial insurers and the Health Care Financing Administration directly, here are some general billing guidelines.

Medicare allows physician extender services to be billed in two ways, explained Mary Stanfill, coding and practice manager for the American Health Information Management Assn.

"They can either be billed to the physician services or they can be billed independently," said Stanfill.

Direct billing is when the physician extender bills for his or her services using his or her own provider number. Physician extenders can obtain a provider identification number by filling out HCFA form 855 for general enrollment, which is available online at the HCFA Web site (http://www.hcfa.gov/medicare/enrollment/forms/).

Services that physician extenders bill for independently are reimbursed at 85% of the physician's fees, according to a TMA guide to physician extender billing, which is available online Web site (http://www.texmed.org/pmt/prs/bgl.asp).

Medicare regulations also allow physician extender services to be billed as "incident to" physician services. Services billed as such are submitted to Medicare under the physician's provider number and are reimbursed at 100% of the Medicare fee schedule for physicians.

However, physicians should keep in mind that services performed by physician extenders must meet several requirements to qualify for "incident to" billing, said Todd Welter, a Medical Group Management Assn. consultant based in Denver.

To bill a physician extender's services as "incident to," said Welter, the physician extender must be employed by the physician, the physician must perform the initial examination of the patient and the physician must directly supervise the physician extender who treats the patient.

In regard to commercial insurer regulations, physicians should keep in mind that each commercial insurer has its own policy for billing for physician extender services.

Some require physician extender services to be billed using the physician extender's provider number, while other commercial insurers require physician extender services to be billed under the physician's provider number, said Stanfill. Some insurers, like Medicare, allow both direct and "incident to" billing depending on the circumstances.

If a physician is unsure how to bill, he or she should call the insurer's director of provider relations, recommended David Allen, MD, Kentucky network medical director for Aetna Inc.

Doctors should also make sure they are aware of state laws regarding billing for physician extenders, said Dr. Allen.

"Some of these payment mechanisms hinge on what state regulations might pass," he said.

Doctors should also keep in mind that each insurer's policies for billing for physician extender services may evolve over time, said Dr. Allen. "I don't think there is an ultimate, perfect answer yet whether physician extender billing should be independent billing or collaborative billing," he said.

If a physician is unable to find out what an insurer's policy is regarding physician extender billing, the best policy is to follow Medicare regulations, noted Welter.