Nurse Practitioner Billing Services: Key Strategies for Accurate Claims

Nurse Practitioner Billing services can be overwhelming due to the variety of rules, regulations, and exceptions. Understanding how to bill correctly is crucial for healthcare providers to ensure compliance with Medicare and other insurance carriers, while also optimizing reimbursement. The U.S. healthcare system is facing a critical provider shortage, especially in primary care. With over 83 million people living in areas with limited access to healthcare providers (HRSA, 2023), the demand for qualified professionals is at an all-time high. Nurse practitioners (NPs) have stepped up to fill this gap, and their impact is growing rapidly. The number of licensed NPs in the U.S. has more than doubled over the past decade, reaching over 385,000 in 2023 (AANP, 2023). This guide covers NP billing, focusing on direct and incident-to billing methods, with steps to ensure compliance and full reimbursement.

Why Effective Billing Services Matter for Nurse Practitioners?

Efficient medical billing services are crucial to the financial sustainability of healthcare practices. Beyond being a financial necessity, billing accuracy directly influences the quality of patient care. Inaccurate billing can lead to claim denials, delayed payments, and lost revenue, all of which impact the overall functionality of a practice.

In fact, research by the American Medical Billing Association found that nearly 80% of healthcare claims are denied due to coding errors, incomplete documentation, or failure to comply with payer guidelines. For nurse practitioners, this could result in significant revenue loss if not managed properly.

NP Reimbursement from Medicare

Medicare Part B reimburses services provided by NPs. Still, the rate of reimbursement differs depending on whether the nurse practitioner bills under their own National Provider Identifier (NPI) or via the physician’s NPI through the incident-to provision. Here’s how each billing method works:

1. Direct Billing Under the NP’s NPI When an NP bills directly using their own NPI, they receive reimbursement at 85% of the Physician Fee Schedule (PFS) rate. This is the most straightforward billing method for NPs. Example: If the PFS rate for a service is $100, Medicare reimburses the NP $68 (85% of $80), and the patient is responsible for the remaining $17.
2. Incident-to Billing: Under incident-to billing, services rendered by an NP are billed under a physician’s NPI, which allows for 100% reimbursement of the PFS rate. However, incident-to billing comes with strict requirements to ensure compliance.

Incident-to Billing: Key Requirements

Incident-to billing allows an NP’s services to be billed under a physician’s NPI, but only under specific conditions. These conditions are designed to ensure the physician is involved in the patient’s care and supervision:

1. Physician Involvement The physician must have initiated the patient’s treatment or care plan. The NP’s services must then be part of this ongoing care plan.
2. Direct Supervision The physician must provide direct supervision, meaning they must be in the same office suite and available to assist if needed, although they don’t need to be in the same room.
3. Active Physician Participation The physician should regularly review and update the treatment plan, typically seeing the patient at least once every third visit. Documentation of this involvement is essential.
4. Location of Services Services must be rendered in the physician’s office or clinic. If services are provided outside the clinic, such as in a hospital, different billing rules apply.

Incident-to Billing Example

• A physician diagnoses a patient with hypertension and creates a treatment plan.
• The NP handles most of the follow-up visits, adjusting the treatment as needed.
• Every third visit, the physician sees the patient, maintaining active involvement. These visits can then be billed under the physician’s NPI, ensuring 100% reimbursement.

Potential Pitfalls in Incident-to Billing

1. Inappropriate Use: If the patient presents with a new condition not covered by the initial physician’s care plan (e.g., a persistent cough), incident-to billing is not appropriate. The physician must either evaluate the new condition or adjust the treatment plan. Bill under the NP’s NPI for that visit.
2. Illegal Use: If the NP works in a satellite office without the physician present, incident-to billing is not permitted. In this case, the NP must bill using their own NPI.

Billing for NP Services in Various Settings

Hospitals and Emergency Departments In these settings, the shared visit rule applies, which allows both the physician and nurse practitioner billing for the same visit if they both interact with the patient. This allows the NP to bill under the physician’s NPI for full reimbursement. Skilled Nursing Facilities NPs can alternate with physicians in performing required physician visits in skilled nursing facilities. Depending on state laws, NPs may also conduct admissions or follow-up visits. Home Health Visits NPs can provide home health services under Medicare Part B. However, for tasks that fall under Medicare Part A (e.g., routine nursing tasks), the NP would need to work in collaboration with a physician.

Medicare Advantage (MA) Plans

Medicare Advantage plans differ from traditional Medicare, and the reimbursement rules may vary. Some MA plans accept NPs into their networks, while others only reimburse services provided by physicians. Practices should be aware of the specific policies of each plan to ensure correct nurse practitioner billing.

Billing Non-Physician Services under an NP’s NPI

NPs may need to bill for services provided by other healthcare professionals (e.g., nurses or medical assistants) under their NPI. This is possible when the service is part of the NP’s care plan and meets the incident-to requirements. Example: If an NP prescribes a blood pressure check during a follow-up visit, and a nurse performs the procedure, the NP can bill for the service as though they performed it themselves.

Avoiding Common Billing Mistakes

• Duplicate Billing Ensure proper coordination between NPs and physicians to avoid duplicate billing, especially when both see the patient on the same day.
• Correct Documentation Ensure the physician’s involvement is thoroughly documented to support the use of incident-to billing.
• Staying Current on Regulations Medicare rules and state-specific guidelines are subject to change. It’s essential to stay up-to-date to avoid billing mistakes.

Fast-Tracking NP Credentialing and Enrollment

Credentialing is an essential step in the nurse practitioner billing process, and it’s important to start early. Here are some tips for streamlining this process:

• Begin credentialing at least 90 days before seeing patients.
• Maintain a checklist of required documents (e.g., NPI number, state license, DEA registration).
• Follow up regularly with payers to ensure smooth processing.

State-Specific Billing Regulations

Billing laws can vary significantly by state, especially regarding the NP’s scope of practice. It’s essential to understand whether your state allows full practice, reduced practice, or restricted practice authority.

Final Thoughts

Dealing with the complexities of nurse practitioner billing doesn’t have to be daunting. By understanding the differences between direct billing and incident-to billing, and following best practices for documentation and compliance, you can ensure your practice maximizes reimbursement and avoids costly mistakes.

10X Your Revenue with Expert Billing Services

Partnering with a specialist in NP billing, such as HealthQuest Billing, can simplify the billing process, reduce claim denials, and maximize your revenue. With expert knowledge of Medicare, compliance requirements, and value-based care models, we offer tailored nurse practitioner billing solutions to meet the unique needs of your practice. Take control of your billing today!  Partner with Health Quest and let us handle your revenue cycle so you can focus on delivering exceptional patient care. Contact us now at (415) 508-6537  for a free consultation!