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CHAPTER 2: REIMBURSEMENT ISSUES
Many APNs erroneously assume that getting an APN license removes all barriers to
getting their services reimbursed by insurance companies. Obviously, the goal is
“direct reimbursement”; that is, being able to bill in the APN’s name, not that of a
physician, because billing under a physician's name simply perpetuates the
invisibility of APNs. To achieve the goal of direct reimbursement APNs have to get
"provider status” or be “empanelled” by a reimburser. For Medicare, the process had
involved getting a Provider Identification Number (PIN), which has now transitioned
into the National Provider Identifier (NPI). Actually, Medicare was issuing PINs to
Illinois APNs a full two years before the APN rules for our practice were written. And
Medicaid in Illinois was willing to directly reimburse APNs even before Medicare.
Many APNs have heard the adage, “as goes Medicare, so does everybody else.” The
common misconception is that if a provider gets a Medicare number, s/he
automatically will be reimbursed by every other insurance company, including HMOs
and PPOs. WRONG! Insurance companies can and do develop their own policies;
what one company "allows" another one doesn't. And what one company allows in
one state may not be allowed in another state. In fact, if one company has three
product lines (indemnity/fee-for-service, HMO, PPO), it may have three different
policies for APNs. In order to become a credentialed provider for every insurance
plan that patients have, an APN must apply for provider status with each and every
insurance company, including Medicaid. By the way, this is exactly what physicians
have to do. Simply having a physician license doesn’t ensure reimbursement.
That said, there are some basics about Medicare that every provider should be very
clear about. First of all, there is Medicare Part A, which covers hospital, skilled
nursing home, and home health charges, and Medicare Part B, which covers most
outpatient services, specifically the care patients receive from “doctor’s offices.” The
remarks below refer to only Medicare Part B billing.
When it comes to an APN’s services (as well as physician assistant services), an
office practice has two billing options for Medicare Part B:
1. An APN's services can be billed under a physician's name, and Medicare
reimburses the practice 100% of whatever Medicare thinks is "usual and customary."
However, if a practice chooses to bill under a physician's name, the physician and
APN must abide by the "incident to” rules of which there are three basic criteria:
(a) The physician has to be in the office when the APN/PA renders care (in the suite
of offices, not across the street making rounds in the hospital!),
(b) the APN cannot see patients new to the practice, and
(c) the APN cannot see established patients with a new problem.
The reasons for criteria (b) and (c) is that billing under the physician’s name implies
that s/he initiates and updates the patient’s plan of care. Meeting all of the incident
to criteria can be logistically difficult. If a physician has to suddenly leave the office,
then the practice can't bill for the services that the APN renders to Medicare patients
while the physician is absent. And meeting criteria (c) can be complicated for a busy
office, because if a patient comes for a routine monitoring visit (e.g., diabetes
monitoring) and suddenly reveals to the APN that s/he has a new problem (e.g., leg
ulcers), the APN has to pull the physician in to assess--and chart on--the patient. It
is not acceptable for the APN to perform the entire history and physical, chart on the
patient, and have the physician simply co-sign the APN’s charting. The physician is
responsible for personally performing the necessary components of the history and
physical and personally documenting the care (i.e., the new treatment plan). It is
clear that meeting this expectation can send APNs' and physicians’ schedules into a
tailspin if very many patients come to see the APN for “routine” monitoring and
suddenly launch into a lengthy “Oh, by the way...” mode. One more thing: neither
incident to billing nor direct billing require a physician to co-sign an APN's charting!
2. For many years, APNs in Illinois obtained her/his own Provider Identification
Number (PIN) from Medicare (meaning from Wisconsin Physician Services the
company that serves as the carrier for Medicare in Illinois). National Provider
Identifiers are easily obtained via an electronic process on the Centers for Medicare
and Medicaid Web site, the link for which can be found at the end of this chapter.
Billing under the APN's NPI means that the practice gets 85% of the physician rate,
but it has the advantage that the incident rules do NOT apply. Therefore, the
physician does not have to be on site when the APN renders care, the APN can see
patients new to the practice, and the APN can see established patients with new
problems. Some practices express concern about billing under the APNs' own PINs
because of the "loss of 15%." However, a practice actually can make more money by
billing under the APN's number because:
(a) As noted above, abiding by incident to rules involves complicated logistics for the
office personnel, and
(b) Since there are no restrictions of the types of patient an APN can see, s/he is
more likely to be able to bill using higher E/M codes.
(c) Furthermore, since most APNs make less than 85% of a physician's salary, the
practice is still making a profit from APN visits.
Last, but not least, billing “incident to” exposes a practice to more frequent and
careful audits, since Medicare is very concerned that practices really do abide by the
incident to rules. This, in turn, carries greater risk of being accused of Medicare fraud
or abuse than billing under the APN's provider number. Such accusations minimally
can lead to a practice having to give money back to Medicare; however, if the fraud
and abuse is deemed egregious, a practice may be fined--in the thousands of dollars.
Finally, it is theoretically possible that people in the practice (including clinicians)
could go to jail. Needless to say, a practice should avoid anything that might indicate
fraud and abuse.
It should be noted that in Illinois, Medicaid does NOT require that practices abide by
incident to rules, and it is very common to bill for APN services under the physician's
name even if the physician is rarely on site where the APN renders care. APNs can
get their own Medicaid numbers. In the past, APNs were reimbursed only 70% of the
physician's rate, so very few Illinois APNs bothered to do this. However, since
January 1, 2006, the Department of Health and Family Services (Illinois’ “Medicaid
Department”), began reimbursing APNs at 100% of the physician rate, with the
exception of those APNs who provide specific services under certain specific
As noted previously, there are no standard rules for private insurers (indemnity
plans, PPOs, HMOs). Any insurance company can establish its own policies. Most
insurers are "silent" on the issue of APNs rendering care and billing under the
physician's name. The only way to know what the policies of all the different insurers
are is to read their respective policy manuals. Bear in mind that if one calls insurers
to ask what their policies are, the person who answers the phone may not have the
proper information. Indeed, the terms "advanced practice nurse", "nurse
practitioner", etc. are still foreign to many people, even in the insurance world.
Therefore, one has to be prepared to be bounced around from department to
department and to have to leave a lot of messages, since invariably the person who
really has the information won't be sitting at his/her desk when the call is placed. In
any case, if one doesn’t like the answer given on the telephone, it’s always
appropriate to ask to speak to someone else higher in the organizational hierarchy.
On a federal level, Medicare does allow physician assistants (PAs) to get their own
numbers; however, their practice act stipulates that payment for PA services "shall
be made to his or her employer...." This is because PAs are "supervised" by
physicians, versus the collaborative agreement that APNs have with physicians. This
is just one of several differences between APN and PA practice in Illinois and in other
Being informed about reimbursement is the responsibility of every single APN. APNs
can NOT let others (e.g., billing clerks and office managers, etc.) be the experts in
APN reimbursement. If APNs want to be marketable it is up to them to know the
policies, rules, and regulations that affect their practice. Listed below are some other
sources of information:
1. By May 23, 2007, CMS systems ceased accepting the previously used PINs and
will accept only the new NPI number. Providers who have been using a PIN, need to
apply for an NPI to replace their PIN. Providers who are enrolling in the Medicare
program for the first time should be applying for only an NPI number. More
information on the NPI can be found at:
http://www.cms.hhs.gov/nationalprovidentstand/. Or one can go directly to the NPI
enrollment site at: https://nppes.cms.hhs.gov/NPPES/Welcome.do
2. Although Medicare is a federal program, it contracts with various entities
throughout the country to perform many of the administrative services that are
entailed. For Medicare Part B billing, providers in Illinois work with Wisconsin
Physician Services at www.wpsmedicare.com. Click on "Provider" on the left frame of
the page, then on "Provider Contacts."
3. There are some excellent resources on reimbursement:
b. Understanding Payment for Advanced Practice Nursing Services: Volume
One: Medicare Reimbursement was published in 2000. Volume 2 was just
released a year later. The authors are the same for both volumes, Sheila
Abood and David Keepnews, and can be bought from the ANA publications
web site at: www.nursingworld.org; click on "American Nurses Publishing" on
the home page. While these books were written some years ago, they provide
an excellent foundation for anyone wondering how and why Medicare policies
have evolved as they have.
b. Carolyn Buppert, NP, JD, has written prolifically about APN issues, including
reimbursement. She has published numerous books and has newsletters
available by subscription. Her Web site is: www.buppert.com.
c. Another resource for APN reimbursement and other practice issues can be
found at www.medscape.com. Much of the information is provided by Carolyn
Buppert, NP, JD. The Medscape site has information for a variety of health