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Coding and Billing for NP and PA Providers in Your Medical Practice

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How to Bill for Nurse Practitioners and Physician Assistants

You would be hard pressed to find a medical practice in 2017 that does not use Physician Assistants (PAs) and Nurse Practitioners (NPs), also referred to as physician extenders or non-physician practitioners (NPPs).

Understanding how to properly bill and code for services provided by NPPs is imperative to running a cost-effective and efficient medical practice.  Regulations vary by insurance companies and states, so both the physician and the NPP’s must stay current with practice guidelines and ongoing changes.

Nurse Practitioners and Physician Assistants have increasingly become a staple in most medical practices.  NPs are nurses who hold a Master’s Degree or Doctor of Nursing Practice (DNP).  PAs are certified (PA-C), usually holding a Master’s Degree as well.  There are a number of reasons that medical practices utilize these mid-level providers:

  • Reduced Salary expenses (as compared to a physician)
  • Lower overhead costs
  • Higher patient volumes
  • Reduced insurance and liability costs

There are 3 basic types of reimbursement that Medicare provides for these non-physician providers (NPPs). 

Direct Pay

Direct pay is when the NPP holds their own Provider Identification Number (PIN). This reimburses the NPP (or practice) at 85% of the billable physician rate. It is very important that each of your mid-level providers receives his/her own National Provider Identifier (NPI) and be credentialed with each payer to bill under his/her PIN number, if possible, based on payer rules and regulations.  However, many payers will not credential NPPs. Having the NPP credentialed allows practices to bill insurance companies directly when the “supervising physician” is either not on site or has not provided any care or input into patient’s plan of care.

“Incident to”

“Incident to” billing is a way of billing outpatient services rendered in a physician’s office located in a separate office or in an institution, or in a patient’s home provided by a non-physician practitioner (NPP) (See MLN Matters SE0441).  With incident to billing, the physician bills and collects 100% of Medicare’s allowable reimbursement.  This type of billing is used when an NPP sees a patient in which the physician has performed the initial service and has initiated a Plan of Care or treatment plan.  There are specific rules for this type of billing, the physician must be on site, in the suite, not just in the building, and provides direct supervision (the rules for home visits varies).

By filing a claim “Incident to”, the physician can collect 100% of the Medicare Physician Fee Schedule (MPFS) instead of 85% of the MPFS for care provided by a qualified NPP.  New patients should be seen by the physician to set up the Plan of Care and this would be billed under the rendering physician.  After the initial visit, the NPP can provide follow-up care based on the Plan of Care, billing for direct care as “Incident to”.  If adjustments are made to the plan of care such as medication changes, then the physician should see the patient face to face in order to adjust the original plan of care, otherwise, the visit may not qualify for “Incident to” billing.

“Incident to” billing was developed by Medicare and not all commercial insurance carriers follow Medicare guidelines, therefore knowing payer regulations regarding “Incident-to” billing is imperative prior to providing patient care.

Split/Shared Expenses

Split/shared expenses:  “A split/shared E/M visit is defined by Medicare Part B payment policy as a medically necessary encounter with a patient where the physician and a qualified NPP each personally perform a substantive portion of an E/M visit face-to-face with the same patient on the same date of service. A substantive portion of an E/M visit involves all or some portion of the history, exam or medical decision making key components of an E/M service. The physician and the qualified NPP must be in the same group practice or be employed by the same employer.”

Billing for shared/split services allows the practice to bill under the qualified physician versus the NPP at their lower reimbursement rate.   As long as the criteria are met, billing for shared/split services allows for that extra 15% reimbursement.

Documentation is paramount in this type of billing.  Each practitioner must thoroughly document the care they provided to substantiate reimbursement under the split/share guidelines allowing both parties to bill for care.

According to the Centers for Medicare and Medicaid Services (CMS), shared/split visits are applicable for services rendered in the following settings:

  • Hospital inpatient or outpatient
  • Emergency department
  • Hospital observation
  • Hospital discharge
  • Office or clinic (when “incident-to” requirement are met)

Shared/split visits are not allowed:

  • In a skilled nursing facility or nursing facility setting
  • For consultation services
  • For critical care services
  • For procedures
  • In a patient’s home or domiciliary site


With shifts in healthcare spending, patient care, and reimbursement, and physician shortages, the need for Nurse Practitioners and Physician Assistants is greater than ever.  A Proper understanding of the billing and reimbursement guidelines for individual payers is necessary.  Charting and documentation requirements must be met.

Does your medical practice use NPs or Pas? Are you billing “Incident to”? Let me know in the comments below. 

http://www.sccm.org/Communications/Critical-Connections/Archives/Pages/Nurse-Practitioner-and-Physician-Assistant-Coding-and-Billing.aspx http://www.napnapcareerguide.com/np-billing-coding-reimbursement/ http://profitable-practice.softwareadvice.com/nurse-practitioners-and-physician-assistants-why-you-should-hire-one-or-the-other-0513/


is a 20 year veteran of healthcare having managed medical practices. He advises medical practices, physicians and practice administrators on how to run their practice and manage their medical billing and revenue cycle management. Manny speaks, blogs and makes videos at www.CaptureBilling.com, a blog that is tops in the medical billing and coding field. READ MORE

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4 Responses to Coding and Billing for NP and PA Providers in Your Medical Practice

  1. Thanks for sharing. I still haven’t really covered this issue, but I guess it is the high time to take it into serious consideration.I currently work with an assistant and our billing system is far from perfect…

  2. Manny!
    Great article with perfect timing as we are just about ready to hire a part time PA. Could you also comment on the expected delay of reimbursement secondary to the CCM certification requirement under the hiring doctors. NPI number? It’s a confusing issue. As I understand it, there is no reimbursement from Medicare or Medicaid while the new hire has their NPI number linked to the Doctor’s NPI number. This can take up to 120 days. That means no reimbursement for services rendered for 3-4 months! So if you’re hiring you should have enough saved up to pay a salary the first 3-4 months.

    • A new hire provider has to be credentialed through Medicare and Medicaid and as you understand, it can take several months. Since the provider is not credentialed, you are correct that there will be no reimbursement for services.

      I have heard of practices doing one of two things:

      1. The new provider does not see Medicare or Medicaid patients or
      2. The new provider sees Medicare patients but does not bill Medicare or Medicaid.

      Now the best thing is to start the credentialing process months before the provider comes on board so that the new provider is ready to go on day one. That may not always be possible.

      What I have heard usually happens is the provider does see Medicare and Medicaid patients, following all the rules and regulations, but the claims are put on hold.

      When the practice finally gets the Welcome letter stating that the new provider has been credentialed there is an effective date for the provider. This effective date is usually several weeks prior to getting the letter. It is then possible to release all the claims as of that effective date for payment.

      There are of course claims prior to the effective date have to be written off.

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The analysis of any medical billing or coding question is dependent on numerous specific facts -- including the factual situations present related to the patients, the practice, the professionals and the medical services and advice. Additionally, laws and regulations and insurance and payer policies (as well as coding itself) are subject to change. The information that has been accurate previously can be particularly dependent on changes in time or circumstances. The information contained in this web site is intended as general information only. It is not intended to serve as medical, health, legal or financial advice or as a substitute for professional advice of a medical coding professional, healthcare consultant, physician or medical professional, legal counsel, accountant or financial advisor. If you have a question about a specific matter, you should contact a professional advisor directly. CPT copyright American Medical Association. All rights reserved. CPT is a registered trademark of the American Medical Association.

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