HCFA institutes new PA payment rules
But 'incident to' regs still apply
On March 26, nearly four months late, HCFA issued a program memorandum to Medicare intermediaries and carriers containing new payment and billing regulations for physician assistants, nurse practitioners, and clinical nurse specialists.
Last year's Balanced Budget Act (BBA) revised payment policies for these nonphysician providers. These new payment rates went into effect on New Year's Day. But because HCFA had not issued the rules for implementing the BBA provisions, providers were not sure how to bill for certain services.
Physician Relations Update talked with Michael Powe, director of health systems and reimbursement policy at the American Academy of Physician Assistants in Alexandria, VA, about HCFA's recently released rules covering reimbursement for physician assistants.
PRU: What do these new rules mean when it comes to reimbursement levels for PAs?
Powe: The new rules, which are effective back to Jan. 1, 1998, reflect several basic changes in Medicare coverage policy for PAs written into last year's Balanced Budget Act. Highlights are as follows:
· PAs working in physician offices and clinics will now be paid at the lesser of either 85% of the Medicare physician fee schedule or 80% of the actual charge.
· This rate also applies to PAs treating Medicare patients in hospital inpatient, outpatient, or emergency department settings, plus those serving as the first assistant during surgery.
· Meanwhile, reimbursement rates for PAs providing services in nursing facilities remains at its current 85% of the physician fee schedule.
PRU: What kind of services are covered?
Powe: Generally, PAs are covered under Medicare Part B for any professional service that would have been covered if provided by a physician. However, state law would have to be followed regarding scope of practice and supervision requirements.
PRU: Are PAs covered for home visits?
Powe: Yes, they are. The new law allows PAs to deliver medical services to homebound Medicare beneficiaries at the 85% rate of reimbursement. This coverage refers to medical care delivered in the patient's home, however, not home health services.
PRU: What about billing?
Powe: PAs are eligible for coverage under Medicare whether they are employed by a solo physician, group practice, hospital, or nursing home.
PRU: Do PAs have a Medicare provider number?
Powe: Yes, Medicare now requires that all PAs treating Medicare patients have a provider identification number (PIN). Those that do not have a PIN can call the provider relations office at their Medicare carrier and request the HCFA 855 Health Care Provider/Supplier Application form, or request form 855G if you are in a group practice.
PRU: How should the HCFA 1500 claim form be filled out for an office visit?
Powe: PAs working for a solo physician should place their PIN in box 33 where it says PIN#. Box 33 also should contain their employer's name and address, because this is where Medicare will send payment.
For a group practice, the PA's PIN must be placed in box 24K, which is titled "reserved for local carrier use." The group's PIN number, name, and address should be placed after GRP# in box 33.
For more detailed information about filling out the 1500 claim form, I suggest contacting the provider relations/enrollment office at your Medicare carrier.
PRU: How should the 1500 claim form be filled out for first assisting at surgery?
Powe: For first assisting at surgery, little change has occurred. The PA's PIN should be placed in box 33, while continuing to use the modifier code "AS." Billers also should note HCFA has discontinued the use of modifier codes for all other services delivered in hospitals, nursing facilities, and rural Health Professional Shortage Areas.
PRU: While the law instituting these changes went into effect last Jan. 1, it was not until March 26 that HCFA sent out its related rules and procedures to Medicare carriers and intermediaries. What impact will this have on claims already in the pipeline?
Powe: First, all billable services covered by the new law that were performed after Jan. 1 are covered. But, because of HCFA's delay in issuing official instructions, local Medicare carriers were unsure about how to process claims for certain provisions of the legislation. As a result, local carriers have been either rejecting certain claims or asking practices to hold these claims until HCFA released implementation instructions.
HCFA has now instructed carriers to pay all previously submitted appropriate claims, including any applicable interest that may be due. If a claim was rejected because the carrier had not received HCFA's instructions yet, it should be resubmitted.
PRU: What about the employment relationship between the PA and the practice they are working for?
Powe: Previously, PAs could only have an employee IRS form W-2 employment relationship with the practice. Now, however, they are also permitted to work as an independent contractor (IRS Form 1099).
PRU: When working as an independent contractor, can a PA directly bill Medicare for their services?
Powe: No. The employer will continue to bill Medicare for PA services. After receiving payment from Medicare, the employer then "passes" the reimbursement on to the PA with an IRS form 1099 showing their payments for that tax year.
PRU: What impact will these new provisions have on HCFA's "incident to" rules?
Powe: Before, except in federally designated rural Health Professional Shortage Areas and certified rural health clinics, the only method for covering PAs in an office or clinic practice setting was through the "incident-to" provision.
Under "incident-to," Medicare required that the physician be physically on site when PAs provided care. There was also a requirement that the physician personally treat all new patients to the practice, as well as established patients who presented new medical problems.
However, under these new rules, PAs can treat new Medicare patients, or established patients with new medical problems, according to the level of supervision required by local state law at 85% of the fee schedule.
PRU: Does this mean "incident-to" coverage been eliminated?
Powe: No. The "incident-to" provision that allows services provided by PAs in the office or clinic to be billed under the physician's name and provider number at 100% of the fee schedule remains an option if Medicare's restrictions are met.
PRU: When does "incident to" apply?
Powe: The "incident-to" provision only applies to an office or clinic setting. An on-site physician presence is required when the PA is treating Medicare patients. Plus, the physician must personally treat Medicare patients on their first visit to the practice or when established patients come to the office with new medical problems. Simply having the physician see the patient or co-sign the medical record/chart is not good enough.
PRU: What about "incident-to" billing?
Powe: Continue to bill "incident-to" services as you have in the past with the physician's name and provider number on the 1500 form.
PRU: Do you expect HCFA to make any changes in its "incident-to" rules in the near future?
Powe: Recently, HCFA has indicated it is considering making changes to its "incident to" policies. In fact, one reason for the changes made in the BBA that are reflected in these new rules was to ensure that PAs would be covered by law in all outpatient practice settings and not be subject to HCFA policy changes.
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