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Hiring nonphysician providers such as physician assistants, nurse practitioners, and other physician extenders will increase the cost of running a practice, finds a study by the Chicago-based American Medical Association’s Center for Health Policy Research. But, the increased productivity and efficiently these extender providers bring to the practice can also increase net practice income by an average 18%, estimates the AMA. (See table.)
Impact of Employing Non-Physician Practitioners
Number of Non-Physician Practitioners
|Office visits per hour||2.8||3.1|
|Patient visits per week||116.4||127.2|
|Patient visits per year||5678.5||6040.9|
|Office visits: hours per week||32.7||33.9|
|Patient care: hours per week||48.6||47.7|
|Weeks worked per year||48.6||47.7|
|Fee: office current patient||$54.00||$52.80|
|Net income (thousands)||$186.9||$220.0|
|Source: American Medical Association, Chicago.|
With an average salary of $55,000 to $60,000 for physician assistants, "employment of non-physician providers raises practice costs, but the resulting increased efficiency may reduce per unit costs or the price of services," found the study.
Another study by the Medical Group Management Association (MGMA) in Englewood, CO, found that the salary of a typical physician assistant only consumes about 30% of his or her related patient billings. In comparison, podiatrists’ salaries consume 34% of their patient billings, OB/GYNs’ salaries consume 35% of their billings, and internists’ salaries suck up 43% of the practice revenue they generate.
The number of physician assistants is expected to grow 48% by 2008, according to the Bureau of Labor Statistics. As more practices expand their use of nurse practitioners and physician assistants to increase productivity, there’s been a corresponding increase in confusion about how to bill Medicare and commercial insurers for their services. Adding to this coding confusion is the fact that billing requirements for physician extenders can — and often do — vary between payers. Also, a payer might have different instructions depending on the type of service a physician extender performs.
While you’ll want to check with the Health Care Financing Administration and commercial plans when it comes to specific questions about their billing procedures for physician extenders, here are some general guidelines worth noting:
• Medicare. Medicare allows physician extender services to be billed in two ways, notes Mary Stanfill, coding and practice manager at the American Health Information Management Association in Chicago. "They can either be billed to the physician services or they can be billed independently," she says.
Direct billing is when the physician extender bills for his or her services using the extender’s own provider number. Physician extenders can obtain a provider identification number by filling out HCFA form 855 for general enrollment, which is available on-line at the HCFA Web site (www.hcfa.gov/medicare/enrollment/forms/). Any service a physician extender bills independently is reimbursed at 85% of the physician’s fees.
• "Incident to." Medicare regulations also permit physician extender services to be billed as "incident to" physician services. These services are submitted to Medicare under the physician’s provider number and are reimbursed at 100% of the Medicare fee schedule for physicians, according to the Texas Medical Association. For more information, the Texas Medical Association has a guide to physician extender billing available on-line at its Web site (www.texmed.org/pmt/prs/bgl.asp).
Also remember that services performed by physician extenders must meet several requirements to qualify for "incident to" billing, notes Todd Welter, a consultant with MGMA. For instance, before you can bill a physician extender’s services as "incident to," the extender must be employed by the physician, the physician must perform the initial examination of the patient, and the physician must directly supervise the physician extender who treats the patient, he notes.
• Commercial carriers. In regard to commercial plans, keep in mind that each insurer has its own policy for billing for physician extender services. This can mean some will require physician extender services to be billed using the physician extender’s provider number, while others want them billed under the physician’s provider number. If unsure about how to bill, call the insurer’s director of provider relations.