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  1. 1. 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
  2. 2. 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
  3. 3. exception of those APNs who provide specific services under certain specific pyschotherapy codes. 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 states. 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: Or one can go directly to the NPI enrollment site at: 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 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:; click on "American Nurses Publishing" on the home page. While these books were written some years ago, they provide
  4. 4. 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: c. Another resource for APN reimbursement and other practice issues can be found at Much of the information is provided by Carolyn Buppert, NP, JD. The Medscape site has information for a variety of health professionals.