Understand the 3 Distinct Billing Options for NPP Services

The use of non-physician practitioners (NPPs) in all healthcare settings is rising rapidly. But, unfortunately, many providers are billing for NPP services all wrong – and facing increasing denials and reduced payments.

NPPs have their own specific rules and guidelines, along with unique coding and compliance issues, Duane C. Abbey explains in his ProfEdOnDemand audio conference, “How to Effectively Use NPPs in Hospitals, CAHs & Clinics.” You need to understand these rules and the various reimbursement levels you can expect from NPP services.

Choose from 3 Ways to Bill for NPP Services

According to the Society of Critical Care Medicine (SCCM), you can bill for an NPP’s services in the following ways:

1. Incident-To – When the NPP provides the service but you are billing under the supervising physician. The payment for incident-to services is 100 percent of the Medicare Physician Fee Schedule (MPFS).
2. Direct – When the NPP is billing for the service (payment is 85 percent of the MPFS).
3. Split/Shared – When both the NPP and the physician provide the service, and the physician bills for the service (but alternately, the NPP may bill for the service).

To qualify as incident-to, the services must be an integral part of the patient’s treatment course, stated Palmetto GBA. The physician doesn’t have to be physically present in the patient’s treatment room, but she must provide direct supervision, meaning the physician must be present in the office suite to render assistance if necessary.

Also, the patient record must document the essential incident-to requirements, Palmetto GBA noted. Incident-to services must be:

• Commonly rendered without charge, but included in the physician’s bills;
• Of a type commonly furnished in a physician’s office or clinic, not in an institutional setting;
• A direct expense to the physician (provided by an NPP who is a W-2 or leased employee, or an independent contractor); and
• Provided by an NPP who is qualified to provide the service.

Snag: Payers may deny an incident-to service that doesn’t have documentation of the initial patient visit and care plan by the physician, warned Barbara Aubry, RN in a 3M Health Information Systems blog posting. You cannot bill an incident-to claim when the NPP performs the initial history and physical examination.

Know When to Use Split/Shared Billing

For direct billing, you would bill the NPP’s services under her own National Provider Identifier (NPI), SCCM said. The NPP will receive 85 percent of the allowable reimbursement under the MPFS.

Example: If only the NPP sees an established patient with a new problem, you would bill the service under the NPP’s NPI, Palmetto GBA illustrated.

Split/shared billing is appropriate for services rendered by both the NPP and the physician, Palmetto GBA noted. You can use split/shared billing for only evaluation and management (E/M) services where both providers examined the patient on the same day.

In the office, the NPP and the physician split/share the service when the service doesn’t meet incident-to guidelines. You would bill this service using the NPP’s NPI.

In the hospital setting, you can bill the split/shared service using the physician’s NPI when both the NPP and physician examined the patient and documented their services. But if only the NPP examined the patient and documented the service, then you should bill the service using the NPP’s NPI.

Get Answers to More NPP Questions

Because Medicare audits incident-to services and the rules are complicated, you need to be aware of the specific requirements – especially when you’re deciding whether to bill incident-to versus split/shared, Aubry cautioned.

Key takeaway: Aside from some of the NPP billing basics, keep in mind that there are additional special concerns for NPPs working in Critical Access Hospitals (CAHs), provider-based clinics, and Rural Health Clinics (RHCs), Abbey stresses. You also need to understand how NPPs relate to the Medicare physician supervision rules. Find out all this and more from Abbey’s educational session.