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Third Party Reimbursement for Physician Assistants
Medicare Coverage for Physician Assistants The first Medicare coverage of physician services provided by physician assistants was authorized by the Rural Health Clinic Services Act in 1977. In the following two decades, Congress incrementally expanded Medicare Part B payment for services provided by PAs, authorizing coverage in hospitals, nursing facilities, Rural Health Professional Shortage Areas, and for first assisting at surgery. In 1997, the Balanced Budget Act extended coverage of PA-performed medical and surgical services to all practice settings.
As of January 1, 1998, Medicare pays PAs' employers for medical services provided by PAs at 85 percent of the physician fee schedule. This rate applies to PAs practicing in all care settings including hospitals (inpatient, outpatient, and emergency departments), nursing facilities, homes, offices, and clinics; it also applies to first assisting at surgery. All visits should be billed at the full physician rate; the PA's NPI number (or PIN) will signal the Medicare carrier to implement the 15 percent discount. Two notable exceptions to the physician assistant 85 percent reimbursement rate, "incident to" and shared visit billing, are available for services meeting strict Medicare criteria.
For more information on how to obtain and use an NPI number, click here to download AAPA's NPI Fact Sheet.
Medicare Eligibility Information For a physician assistant to be an eligible Medicare provider, he or she must meet the following requirements:
- Have graduated from a physician assistant education program that is accredited by the Accreditation Review Commission on Education for the Physician Assistant or, prior to 2001, either by the Committee on Allied Health Education and Accreditation or the Commission on Accreditation of Allied Health Education Programs; OR
- Have passed the national certification examination administered by the National Commission on Certification of Physician Assistants (NCCPA); AND
- Be licensed or certified by any states in which he or she wishes to practice as a physician assistant.
Supervision
PAs practice medicine with physician supervision. Medicare follows the supervision regulations established in each state. Unless required by state law or hospital regulation, physician supervisors are not required to be present on-site while PAs furnish care to Medicare patients. It is imperative, however, that a PA's physician supervisor (or his or her physician designee) be available to the PA for consultation purposes by telephone or other reliable means of communication. Unless otherwise noted, Medicare defers to state law regarding PA scope of practice and allows PAs to prescribe medication and durable medical equipment per their state laws.
Ownership Interest
Effective April 1, 2002, the Centers for Medicare and Medicaid Services (CMS) issued new Medicare Carrier Manual instructions that expand employment and practice ownership opportunities for PAs. The new policy removes a restriction on PA ownership by allowing a PA to have an ownership interest in an approved corporate entity (e.g., a professional medical corporation) that bills the Medicare program as long as the business entity is consistent with state law. Previously, CMS prevented payment to corporate entities in which a PA had any ownership interest.
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Billing in an Office or Clinic Setting Medicare covers services provided by physician assistants in an office or clinic setting at 85 percent of the physician fee schedule. Supervising physicians need not be on-site while the physician assistant performs services unless required by state law.
The CMS 1500 Claim Form should indicate that the physician assistant provided the service by including the physician assistant's National Provider Identifier (NPI) number in box 24J. The charge reported for the service should be at the physician fee schedule; the use of the physician assistant's NPI number will indicate to the Medicare carrier to pay at the 85 percent rate. The NPI number of the physician assistant's employer should go in box 33 and indicates where Medicare should send payment. Payment must always go to the physician assistant's employer.
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"Incident to" Billing in an Office or Clinic Setting "Incident to" is a Medicare billing provision that allows services provided by PAs in an office or clinic setting to be reimbursed at 100 percent of the physician fee schedule by billing using the physician's NPI number (or PIN). The Medicare Carrier Manual defines "incident to" as "services furnished as an integral although incidental part of a physician's personal professional services."
In order for a practice to bill for services provided by a PA as "incident to", all of the following criteria must be met:
- The service performed must be one that is typically performed in a physician's office.
- The service performed should be within the scope of practice of the PA and in accordance with state law.
- The physician must personally treat the patient on the patient's first visit to the practice or treat any established patient who comes to the office with a new medical condition. PAs may provide follow-up care.
- The physician should be in the suite of offices (on-site) when the PA is rendering the service.
Click here for Frequently Asked Questions about "Incident to".
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Medicare Coverage for Services Provided in Hospitals Since January 1, 1987, PAs have been covered under Medicare Part B for services provided to Medicare beneficiaries in all hospital practices, including inpatient, outpatient, and emergency settings. Medicare will generally reimburse for any professional service performed by a physician assistant for which they would reimburse a physician.
Supervision
Medicare follows regulations established in each state regarding the degree of physician supervision required in hospitals. The physician supervisor need not be physically present with the PA in the hospital when a service is being furnished to a Medicare patient unless on-site supervision is required by state law or by the hospital's bylaws. If the physician supervisor (or physician designee) is not physically present with the PA, he or she must be immediately available to the PA for consultation purposes by telephone or other effective reliable means of communication.
Reimbursement
Claims for reimbursement should be submitted with the PA's NPI number and will be reimbursed at 85 percent of the physician fee schedule, as specified in the Balanced Budget Act of 1997, unless the shared visit billing exception applies.
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Shared Visit Billing in a Hospital Setting On October 25, 2002, CMS issued new rules giving PAs and their supervising physicians increased latitude in hospital and office billing for E/M services. The new requirement (Medicare Transmittal 1776) allows PAs and physicians who work for the same employer/entity to share visits made to patients the same day by billing the combined work under the physician's NPI number for reimbursement at 100 percent of the fee schedule even if the PA did the majority of the work.
This billing option does not apply to consults (per Medicare Transmittal 788) or extend to procedures, or critical care services. The criteria for shared visit billing are s follows:
- Both the PA and the physician must work for the same employer (e.g., same group practice, same hospital, or PA is employed by a solo physician).
- The service provided is a non-consultation E/M service, not a procedure and not a critical care service.
- The physician must provided some face-to-face portion of the E/M visit; simply reviewing or signing the patient's chart is not sufficient.
- Both the PA and the physician must see the patient on the same calendar day.
If the physician does not provide some face-to-face portion of the E/M encounter, then the service is appropriately billed at the full fee schedule amount under the PA's NPI number (or PIN) with reimbursement paid at the 85 percent rate.
Click here for Frequently Asked Questions about Shared Visit Billing.
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Billing for First Assisting at Surgery Medicare covers PAs for first assisting at surgery at 85 percent of the physician fee schedule or 13.6 percent of the primary surgeon's fee for the surgery (85 percent of the physician first assistant rate, 16 percent). PAs can provide the same range of first assistant services as physicians. A claim for first assisting at surgery should be submitted with the PA's NPI number (or PIN) and the AS modifier to the surgical code.
Click here to view a list of CPT codes for which Medicare will not reimburse a first assistant.
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Medicare Billing in Nursing and Skilled Nursing Facilities Services provided by PAs in nursing facilities should be billed under the PA's NPI number (or PIN); reimbursement will be at 85 percent of the physician fee schedule. However, PAs practicing in a nursing facility must be aware of Medicare rules governing who must perform visits with nursing facility patients.
Physicians managing nursing facility patient care may delegate visits to PAs. However, at a minimum, Medicare requires that the initial comprehensive nursing facility patient visit must be performed by a physician. Additionally, Medicare regulations dictate that nursing home patients be seen at least once every 30 days for the first 90 days of care and every 60 days thereafter. Of these visits, a physician and a PA may alternate visits and a PA may perform any necessary unscheduled visits without disrupting the established alternating visit pattern.
In skilled nursing facilities, services assigned to a physician must be performed by a physician and not delegated to a PA. If allowed by state law, Medicare allows PAs practicing in nursing facilities to provide services that are designated as physician services.
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Medicare Policy Chart for Physician Assistants
SETTING SUPERVISION
REQUIREMENTREIMBURSEMENT RATE SERVICES Office/Clinic when physician is not on site State Law 85% of physician fee schedule All services PA is legally authorized to provide that would have been covered if provided personally by a physician Office/Clinic when physician is on site Physician must be in the suite of offices 100% of physician fee schedule 1 Any service provided to an established patient of the practice and related to an ongoing condition for which a plan of care was established by a physician of the practice Home visit/
House CallState Law 85% of physician fee schedule All services PA is legally authorized to provide that would have been covered if provided personally by a physician Skilled Nursing Facility & Nursing Facility State Law 85% of physician fee schedule Same As Above Hospital; non-shared visit service State Law 85% of physician fee schedule Same As Above Hospital; shared visit service State Law 100% of physician fee schedule Any non-consultation E/M service; no procedures, no critical care First assisting at surgery in all settings State Law 85% of physician first assist fee schedule2 All services PA is legally authorized to provide that would have been covered if provided personally by a physician Federally Certified Rural Health Clinics State Law Cost-based reimbursement Same As Above HMO State Law Reimbursement is on capitation basis All services contracted for as part of an HMO contract 1 Using carrier guidelines for "incident to" services.
2 i.e. 85% x 16% = 13.6% of surgeon's fee.
Click here to download a printable version of this chart for easy reference.
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Medicaid Coverage Currently, 50 states cover medical services provided by PAs under their Medicaid fee-for-service or managed care programs. The rate of reimbursement is either same as or slightly lower than that paid to physicians.
Click here to download a chart with information about the Medicaid program in all 50 states.
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Private Payer Coverage Almost all private insurance companies cover medical and surgical services provided by PAs. However, with scores of different payers and plans, including preferred provider organizations (PPOs), health maintenance organizations (HMOs), and fee-for-service programs operating in the United States, there may be differences both in how services delivered by PAs are covered and how claim forms should be submitted. Even within the same insurance company, PA coverage policies can change based on the particular plan type, the specific type of service being provided, and the part of the country in which the service is delivered.
Some companies require that the service provided by Pas be billed under the name of the supervising physician, while others ask that claims be submitted with the name of the PA. A practice must determine how to submit claims for the plans held by patients. Although many private payers do not separately credential or issue provider numbers to PAs, PAs are still covered for most services they provide. When plans do not credential or issue provider numbers to PAs, they typically want the service billed under the name of the supervising physician, occasionally with a modifier code attached. As mergers and acquisitions continue to consolidate the health care marketplace, coverage policies for PAs are becoming much more consistent throughout the country.
Click here to view profiles of private insurance companies in your state (Login with AAPA Member Number Required).
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Workers' Compensation Coverage The Workers' Compensation Program provides insurance coverage for liabilities imposed on certain employers to pay benefits and furnish care to employees who are injured on the job. Physician assistant scope of practice, supervision requirements, reimbursement rates, and other conditions of participation in the Workers' Compensation Program vary by state and, in some cases, depend upon the Workers' Compensation insurance policy.
Click here to download a chart with information about the Workers' Compensation programs in all 50 states.
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TRICARE Coverage TRICARE, formerly known as the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS), covers all medically necessary services provided by PAs. PAs must be supervised in accordance with state law and their supervising physicians must be authorized TRICARE providers. As with other payers, the employer must bill for the services provided by the PA.
The allowable charge for all medical services provided by PAs under TRICARE Standard, the fee-for-service program, except assisting at surgery, is 85 percent of the allowable fee for comparable services rendered by a physician in a similar location. Reimbursement for assisting at surgery is 65 percent of the physician's allowable fee for comparable services.
PAs are eligible providers of care under TRICARE's two managed care programs, TRICARE Prime and Extra. TRICARE Prime is similar to an HMO. TRICARE Extra is run like a preferred provider organization in which practitioners agree to accept a predetermined discounted fee for their services.
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Avoiding Fraud and Abuse Pitfalls In this presentation, a leading health care attorney explains why the Justice Department and CMS are spending millions of dollars to identify those practitioners and practices that do not adhere to federal guidelines regarding payment policy, nonphysician employment status, and a host of other issues. Recent changes have expanded what PAs can do in practice, but that expansion comes with additional rules and sizable penalties for noncompliance.
- What is your responsibility if you discover that services are being improperly billed?
- What are the basic safeguards in establishing a billing compliance plan?
- What penalties may be assessed if services are improperly billed?
- Find out about qui tam "whistleblower" cases and how to prevent your practice from being a target. Stark II requirements detail business and referral relationships that should be avoided. Learn which aspects of the physician/nonphysician relationship are directly affected by Stark II.
View the Thomas L. Sparks presentation
"Avoiding Fraud and Abuse Allegations"
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Policy and Reimbursement Issue Briefs Antitrust Implications of Negotiating with Third Party Payers
Coverage and Payment for Services: Antitrust Issues
Expanded Coverage for Medical Services Provided by PAs Under Medicare
Medicare Provisions Affecting PAs in the Balanced Budget Act of 1997
PAs as Shareholders in Professional Corporations
Updated Hospital Shared-billing Guidelines: Medicare and Shared Visits
PAs and Innovative Solutions for Rural Hospitals
PAs as Medicaid Managed Care Providers
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Additional Resources To obtain additional information on reimbursement issues, you may call AAPA directly at 703/836-2272, ext. 3218 or 3219.
ALSO AVAILABLE: Physician Assistant Third-Party Coverage, a comprehensive summary of coverage and billing information for services provided by physician assistants. Order your copy from the on-line AAPA Store at http://www.aapa.org/aapastore/index.html.
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Last Revised: 2/8/08
