"Incident To" Controversy Complicates ED Practice Patterns

Careful documentation is required to avoid PA billing pitfalls

The Health Care Financing Administration’s recent stipulation this it does not recognize "incident to" services in the hospital setting has left many ED managers and allied health professionals confused and worried.

"This is very frustrating," says Daniel E. Goodrich, PA-C, Director of Physician Assistant Services for Lakeland Emergency Associates in Cleveland, OH. "Here we are, working side by side with an attending in the emergency room, yet they tell us it is not incident to?"

Physicians, private practice and in other settings, usually bill Medicare for the services delivered by the physician assistants (PAs) they employ or supervise with no distinction on the bill between the services actually performed by the physician and those performed by the PA, as long as they met HCFA’s criteria defining services that were an integral part, or incidental to, the physician service, says Caral Edelberg, President of Medical Management Associates, a consulting firm based in Jacksonville, FL. (See supplement on clarification of billing rules.)

The inspector general recently issued a clarification of the "incident to" standards that excluded this definition for services delivered to patients in a hospital, including patients treated in a hospital’s ED, because PA services are bundled into the hospital’s payment under Medicare Part A.

"If a PA provides a service under the supervision of the attending physician, then the service must be billed with a -AN modifier," she explains. "If a physician provides essentially the definitive service and only uses the PA for a portion of the history and maybe some other [less significant] portions, then they can bill it as a service without the -AN."

But, services billed with the modifier are only reimbursable at 75% of the Medicare fee schedule, which in some cases calls into question the value of having a PA perform the service, says Goodrich.

"That makes it really difficult for us," he says. "It doesn’t make any sense to me because HCFA doesn’t apply that rule to PAs that are outside the hospital. If they are in the office across the street they can get incident to. But not in hospitals or the ED."

Lakeland is trying to cope by having the physician essentially go back and reassess and re-examine the patients seen by the PAs, documenting their medical decision-making and diagnosis. This is not a cost-effective approach, says Goodrich.

"It’s really tough on us," he says. "It depends on our emergency room and the volume of Medicare patients as to whether it is appropriate or not. The discussion is whether we should go ahead and get rid of our PAs in hospitals that have high Medicare numbers. And, this does not just apply to PAs; it affects NPs and other ancillary personnel."

The clarification further stipulates that only the employer of the PA can bill for their services and that physicians who supervise the PA, but do not employ them, cannot, says Edelberg.

"If the PA is employed by the hospital, but the emergency department physician is supervising him, the only way for the physician to get reimbursed is to get payment from the hospital in the form of a supervisory or administrative fee."

Economic triage

Some EDs, both Edelberg and Goodrich say, have taken the step of mandating that Medicare patients see physicians and not PAs, a policy they feel is inappropriate.

"It is inappropriate because it is discriminating," says Goodrich. "They are picking out the patients who get seen. If a laceration comes in and the physician is busy, but the PA is free, what does that mean? It means the patient is going to wait unnecessarily because the PA can’t see the patient.

"Two Medicare patients with asthma exacerbations present to the ED at the same time and they are both serious. The PA can’t see either of them? That is so inappropriate."

Most people feel the rules apply to Medicaid patients as well, because they receive federal funds, notes Edelberg. "To be on the safe side, you want to use the same methodology for all patients. But, for sure you have to file [using the -AN modifier for PAs] with Medicare, and probably Medicaid and CHAMPUS."

Possible penalties

If a department is caught billing PA services as physician services, the penalties are severe.

For starters, you have to pay back the 25% difference between the payment for a physician service and the payment for a PA (or other non-physician provider) service and the group or hospital is liable for penalties.

"Medicare [may] audit you, look at the charts and say, ‘Hmmm, you don’t have physician documentation on these charts to indicate physician service, but you do have PA documentation—we think this is a PA service. We paid you 100% of the schedule when you qualified for 75%, so on all of these we want our 25% back," explains Edelberg. "Plus, if they think you’ve committed fraud or abuse, they might give you penalties. Some of them are $2000 per code, per service. That’s just for the wrong coding; if they think you committed fraud, it could be more."

Thorough documentation is essential

The problem with the recognition of "incident to" in the hospital setting may have arisen with the lack of documentation to show that the physician is still involved in the care of the patient through direct supervision of the PA and the care provided, says Richard Frires, MD, FACEP, Chairman of the Department of Emergency Medicine at Meridia Huron Hospital in Cleveland, OH.

"Generally, at ERs throughout the country, not just ours, we [physicians] failed to document in a way that would show the people reviewing the chart that the doctor was indeed involved in the medical decision making, the doctor directed the care, the doctor approved of the orders that were given, the doctor agreed with the examination, and agreed with the diagnosis. So, the doctor really directs the care."

For many years, PAs did most of the documentation, and, in many ERs, the physicians have tacitly implied that they did the work and were in agreement by their signature on the chart, Frires says.

"That’s not good enough anymore," he continues. Physicians supervising PAs in the ED at Meridia Huron are now much more careful in their documentation. "We document to prove that we do the meaningful parts of the physical exam now. The doctors don’t document the whole physical, but they document the meaningful parts of it pertinent to the problem.

"Now, we usually put a line in to prove we are part of the decision-making process. We document in our own handwriting, those parts of the PA’s physical exam with which we are in agreement. We document all of our phone conversations, all of our differential diagnosis, all reexaminations, and our decisions for disposition, and we, in our own handwriting, put the dispositions down."

In essence, Frires says, their interaction with the PAs has not changed, but the documentation has.

Change on the horizon?

Because there has been so much confusion over the issue, many believe that there will be changes in the guidelines for "incident to."

For example, most carriers do not issue provider numbers for PAs, allowing them to bill under a number separate from a physician, says Edelberg, but many think that that is about to happen.

"Everybody thinks there will be a PA provider number, but there won’t be in all cases," she emphasizes.

Goodrich and the other Lakeland PAs already have a provider number, but even billing under their own number, the PAs would still be reimbursed only 75% of the schedule amount.

"I could live with it if they wanted to make it 85-90%, but 75% is just inappropriate," he says.

Goodrich also worries about the policy expanding to other carriers, which usually follow Medicare’s lead. "What will force the issue is that docs will have to work alone and the quality of care would worsen or they have to incur that greater expense of increased physician coverage."