Practice Management Pearls: APP Reimbursement Refresher 

Nurse Practitioners (NPs) and Physician Assistants (PAs) are increasingly contributing to the care of neurosurgical patients. In addition to specialized training PAs and NPs require for success in neurosurgery, physicians and practice administrators also need a keen understanding of reimbursement practices such as ‘incident-to’ and ‘split-shared’ billing. By applying the guidelines that underpin these billing conventions, providers and practices can optimize reimbursement, empower PAs and NPs to practice at the top of their license and lower their risk of fraud and abuse. 

Basics of APP Reimbursement: 

NPs and PAs are classified by Medicare as Advanced Practice Providers (APPs); nearly all the coverage policies are the same for both professions.  As such, both PAs and NPs bill Medicare under their own NPI and should expect to receive 85% of the uniform rate of the physician fee schedule for their services.  Medicare acknowledges the relationship between physicians and APPs, but in 2020 Medicare’s Physician Fee Schedule made the change to defer all requirements regarding collaboration and supervision to states and local jurisdictions. In most cases, Medicare does not require that a physician be physically present during an encounter and does not specifically require physicians to co-sign notes unless required by state law or facility policy.  Still, myths persist regarding reimbursement for APPs that lead to inefficient practice patterns where APPs are not utilized to the fullest potential. Myth: APPs can’t see new Medicare patients.  Fact: Chapter 15 of the Medicare Benefit Policy Manual states that, if authorized under the scope of their state license, PAs and NPs may furnish services billed under all levels of CPT evaluation and management codes and diagnostic tests if furnished under the general supervision (PA) or in collaboration (NP) with a physician.  

In consideration of commercial polices, all major health insurance carriers cover the services of APPs. However, there is wide variation in how APPs are credentialed, how claims are submitted and paid, and whether they have incident to or split shared billing. 

Outpatient Evaluation and Management: 

APPs are authorized to treat all new and returning patients consistent with the scope of their state license and the credentialing practices of their organization.  If an APP treats a Medicare beneficiary in an outpatient setting, they should bill under their own NPI at the full fee schedule and expect Medicare Administrative Contractor (MAC) to reimburse at 85% for their services.  Another outpatient reimbursement option is ‘incident to” billing which is a Medicare convention whereby an APP can see an established patient in follow-up and follow a plan set forth by a physician at a prior visit.  The visit would then be billed under a physician’s NPI and should be reimbursed at 100%.  While this does present an opportunity for increased revenue, there are several very important rules and regulations when considering incident to billing including: 

• The incident to service must be performed in a medical office or clinic.  

• A physician from the same group must be physically present in the clinic at the time of the service, not necessarily the initial physician. 

• The service cannot be for a new or worsening problem. 

• The physician must remain engaged in the care of the patient. 

• This does not include shared visits or APP acting as a scribe. 

• This can be for procedures if noted in the initial treatment plan. 

• The APP must represent a direct financial expense to the physician billing (W-2, leased employee, or independent contractor) or have the same employer (same tax ID). 

Hospital Evaluation and Management Services: 

APPs may provide inpatient evaluation management services including new and subsequent visits and critical care service and should be reimbursed at 85% of the physician fee schedule. Split-shared billing is another optional Medicare convention that allows for a physician and APP to work together on a patient encounter and submit the charge under the physician’s NPI and expect 100% reimbursement provided specific criteria are met which include: 

• The physician and APP service occurs on the same calendar day. 

• The physician and APP have the same employer.  

• The physician must perform a substantive perform of the service which currently is described by CPT as: 

1. More than half of the total time, OR 
2. Two of the three elements of MDM used to select to the CPT code for the service, except for those that only use time to determine billing like critical care or discharge services.  

Although it had been proposed, in 2024, that time would be the only deciding factor for split-shared billing, this change was not adopted.  

Following the rules for these billing conventions can increase revenue, efficiency, APP job satisfaction while decreasing a practice’s risk of fraud.