Practice Economics

Medicare Billing Regulations for Nonphysician Providers Vary by State, Facility


Nurse practitioners (NPs) and physician assistants (PAs), referred to as nonphysician providers (NPPs) in billing policy, provide many different services in the hospital setting. Roles include:

  • Rounding independently and following patients of varying acuity with physician supervision. The NPP may ask the physician to see the patient, as necessary, if a change in the patient’s condition arises and warrants physician evaluation.
  • Providing prompt consultative
  • services when the physician is not
  • readily available.
  • Rounding alongside the physician and expediting the work of admission services through a combined effort.

Hospitalist programs may elect one model over another, or utilize NPPs according to existing need and shifting census. Employers must be aware of state and federal regulations, facility-imposed standards of care, and billing requirements surrounding NPP services.

Medicare Enrollment and Billing Eligibility

Certified PAs and NPs may provide covered services to Medicare beneficiaries in accordance with their state scope of practice under state law and corresponding supervision/collaboration requirements. They can submit claims for these services, providing they meet enrollment qualifications.1

PAs must have:

  • Graduated from a PA educational program accredited by the Accreditation Review Commission on Education for the Physician Assistant (or its predecessor agencies, the Commission on Accreditation of Allied Health Education Programs (CAAHEP) and the Committee on Allied Health Education and Accreditation (CAHEA); or
  • Passed the national certification examination administered by the National Commission on Certification of Physician Assistants (NCCPA); and
  • A license as a PA in the practicing state.

NPs must:

  • Be a registered nurse who is authorized and licensed by the state to practice as a nurse practitioner by Dec. 31, 2000; or
  • After Jan. 1, 2001, be a registered nurse who is authorized and licensed by the state to practice as an NP and be certified by a recognized national certifying body that has established standards for NPs (e.g. American Academy of Nurse Practitioners, American Nurses Credentialing Center, AACN Certification Corp., or National Board on Certification of Hospice and Palliative Nurses); and
  • Possess a master’s degree in nursing.

Independent Billing

NPPs can see patients in any setting without the presence of a physician. The physician is not required to see the patient but must be available by phone or beeper in accordance with supervisory/collaborative guidelines. Physician cosignature is not required unless mandated by state law or the facility.

NPPs document and report their services according to the Centers for Medicare & Medicaid Services (CMS) Documentation Guidelines (available at The NPP should be listed as the rendering provider on the claim form. Currently, insurance programs Medicare and Aetna Inc. consistently enroll and recognize NPPs as billing providers and reimburse these services at 85% of the allowable physician rate.2

Shared/Split Billing

When two providers (a physician and NPP) from the same group (direct employment or a lease arrangement contractually linking the providers) perform a service for the same patient on the same calendar day, CMS allows the combined services to be reported under a single provider’s name.

Allowable services. NPPs are only limited by the state scope of practice under state law, and the facility rules in which the NPPs practice. Services must be performed under the appropriate level of supervision or collaboration. Medicare reimburses reasonable and necessary services not otherwise excluded from coverage.

However, shared/split rules restrict the services reported under this billing model, recognizing only evaluation and management (E/M) services (and not procedures) provided in the ED, outpatient hospital clinics, or inpatient hospital (i.e. facility-based services). Shared/split rules do not involve all types of E/M services. For hospitalist programs, critical-care services (99291-99292) are excluded.3

Physician requirement. Shared/split rules require a face-to-face patient encounter by each provider on the same calendar day. There are no billing mandates requiring the NPP to see the patient before the physician does, although practice style might govern this decision.4 CMS does not specify the extent of provider involvement, but it could be established by local Medicare contractor requirements. Some contractors reference physician participation as a “substantive” service without further elaboration on specific parameters. Therefore, the physician determines the critical or key portion of his/her personal service. Minimalistic documentation can be problematic for quality or medicolegal aspects of patient care, and physicians might benefit from a more detailed notation of participation.

Documentation. Physician documentation must include an attestation that supports the physician encounter (e.g. “Patient seen and examined by me”), the individual with whom the service is shared (e.g. “Agree with note by X”), their portion of the rendered service (e.g. “Pulse oximetry 94% on room air. Audible rhonchi at bilateral lung bases. Start O2 2L nasal cannula. Obtain CXR”), the date, and a legible signature. NPP documentation should include as similar reference to the physician with whom the service is being shared for better charge capture. It alerts coders, auditors, and payor representatives to consider both notes in support of the billed service and ensures that the correct notes are sent to the payor in the event of claim denial and subsequent appeal.

Although the visit level is supported by both provider services, only one claim may be submitted for a shared/split service. The rendering provider listed on the claim can be the physician (reimbursed at 100% of the Medicare allowable physician rate) or the NPP (reimbursed at 85% of the allowable physician rate).

Non-Medicare Claims

Shared/split billing policy only applies to Medicare beneficiaries, while independent billing policy applies to Medicare and Aetna. Excessive costs prevent most other non-Medicare insurers from credentialing and enrollment NPPs. Absence of payor policy does not disqualify reimbursement for shared services, but it does require additional measures to establish recognition of NPP services and a corresponding reimbursement model.

After determining payor mix, develop a reasonable guideline for those payors who do not enroll NPPs. Delineate, in writing, a predetermined time frame for guideline implementation unless the payor can provide an alternate billing option. Some experts suggest physician groups outline the following key issues when structuring a billing option5:

  • Type of NPPs involved in patient care;
  • Category of services provided;
  • Service location(s);
  • Physician involvement;
  • Mechanism for reporting services; and
  • Documentation requirements.

Guidelines can be developed for any of the billing options (independent, “incident-to,” shared/split). Be sure to obtain written payor response before initiating the billing process.

Carol Pohlig is a billing and coding expert with the University of Pennsylvania Medical Center, Philadelphia. She is also on the faculty of SHM’s inpatient coding course.

NPP Billing Reminders

Discharge Day Management Services

Discharge day management (99238-99239) often is delegated to qualified NPPs.3 Because this service is time-based, the final code selection is based upon the total time spent with the patient, and on the patient’s unit/floor, coordinating care prior to the patient leaving the hospital on the day of discharge. If this service is solely provided by the NPP, the NPP must report the appropriate code under his/her own name on the claim form (for eligible payors). If this service is shared with the physician, report the code representing the cumulative, documented time in both notes, provided that each note identifies the face-toface service from each provider, and his/her corresponding participation.

Admission Services

Many questions arise about NPPs performing the admission service because NPPs might not be given “admitting” privileges by the facility in which they practice. NPPs may provide and/or participate in services according to their state scope practice and facility-imposed guidelines. Billing policy supports state law and will reimburse any “independent” service permitted by the state. Facilities may limit NPP scope of practice by disallowing independent admission service but permittin a shared service with the physician. If this service is shared with the physician, report the code representing the cumulative, documented encounter, provided that each note identifies the face-to-face service from each provider, and his/her corresponding participation

Consultation Services

Prior to Medicare’s elimination of consultation services (99241-99245, 99251-99255), shared/split billing rules excluded consultations from this claim-reporting model.3 Since the elimination of consults, “consultations” are reported as initial hospital care services (99221-99223).3 Therefore, consultative services can be shared by NPPs and physicians, and reported as a cumulative initial hospital service through the shared/ split billing model. Other payors still accept consultation codes and do not have a specified shared/split model. This allows for the consultative service to be reported as a cumulative NPP/physician effort under the physician name, as long as a written contractual agreement exists allowing this billing option.


  1. Centers for Medicare & Medicaid Services. Medicare Benefit Policy Manual: Chapter 15, Section 190-200. Centers for Medicare & Medicaid website. Available at: Accessed Nov. 5, 2012.
  2. Aetna Inc. Aetna office links updates. Reminder: Reimbursement change for mid-level practitioners. Aetna Inc. website. Available at Accessed Nov. 6, 2012.
  3. Abraham M, Ahlman J, Anderson C, Boudreau A, Connelly J. Current Procedural Terminology 2012 Professional Edition. Chicago: American Medical Association Press; 2011.
  4. Centers for Medicare & Medicaid Services. Medicare Claims Processing Manual: Chapter 12, Section 30.6.1B. Centers for Medicare & Medicaid website. Available at: Accessed Jan 21, 2013.
  5. Pohlig, C. Nonphysician Providers in Your Practice. In: Coding for Chest Medicine 2011. Northbrook, Ill.: American College of Chest Physicians, 2010.

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