MedPAC to Congress: End “incident-to” Billing

Get rid of “incident-to” billing and have nurse practitioners and physician assistant bill Medicare under their own numbers – that’s the unanimous recommendation the Medicare Payment Advisory Commission made in its June report to Congress.

Incident-to billing occurs when an advanced practicing registered nurse (APRN) or a physician assistant (PA) performs a service but bills Medicare under the physician’s national provider number and receives full physician fee schedule payment, as opposed to 85% of the fee under their own number.

“Medicare beneficiaries increasingly use APRNs and PAs for both primary and specialty care,” according to MedPAC’s June report. “APRNs are furnishing a larger share and a greater variety of services for Medicare beneficiaries than they did in the past. Despite this growing reliance, Medicare does not have a full accounting of the services delivered and beneficiaries treated.”

Currently, identical coding requirements obscure whether the physician or the APRN/PA is providing the service, making it difficult to track volume and quality.

MedPAC estimated that, in 2016, 17% of all nurse practitioners billed all their services as incident to, as that was the number of nurse practitioners who never appeared in the performing provider field for reimbursement but ordered services/drugs or at least one Medicare fee-for-service beneficiary.

Another 34% billed some of their services as incident to as their name appeared at least once in the performing provider they ordered services/drugs for, but ordered more services/drugs for patients where they were not listed as the performing provider.

That leaves just about half (49%) who did not billing their services as incident to.

Requiring APRNs and PAs to bill directly for all of their services provided would update Medicare’s payment policies to better reflect current clinical practice, according to the MedPAC report. “In addition to improving policy makers’ foundational knowledge of who provides care for Medicare beneficiaries, direct billing could create substantial benefits for the Medicare program, beneficiaries, clinicians, and researchers that range from improving the accuracy of the physician fee schedule, reducing expenditures, enhancing program integrity, and allowing for better comparisons between cost and quality of care provided by physicians and APRNs/PAs.”

At their October 2018 meeting, MedPAC commissioners discussed how to appropriately compensate APRNs and PAs, should incident-to billing be eliminated; they ultimately recommended maintaining the 85% rate.

The American Academy of Family Practitioners spoke out against the idea of eliminating incident-to billing.

However, lowering all APRN/PA payments to 85% of what physicians make would impact doctors in a negative way, according to AAFP President Michael Munger, MD.

Dr. Munger described primary care as a team sport, and “this is certainly going to be felt in terms of the overall mission of delivering quality care.”

Access to care also could be reduced along with the reduced payment level.

“You have to make business decisions at the end of the day,” he said in an interview. “You need to make sure that you can have adequate revenue to offset expenses, and if you are going to take a 15% cut in your revenue in, you have to look at where your expenses are, and obviously salary is your No. 1 expense. If you are not able to count on this revenue and you can’t afford to have NPs and PAs as part of the team, it is going to become an access issue for patients.”

The MedPAC commissioner saw it differently.

“Most of these clinicians are already paid at this lower rate, and yet the supply of these clinicians has increased dramatically over the last several years,” the report states, adding that the salary differential between these clinicians and physicians “is large enough that employing them likely would remain attractive even if all of their services were paid at 85% of physician fee schedule rates.”

MedPAC, as an advisory body to Congress, makes no disclosures.