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Nurse Practitioner Reimbursement - Susan Cooper
Susan Cooper is the Administrative Director (1998 -) of the Vanderbilt Medical Group Network Practices in Nashville, TN. As the Administrative Director, Susan works closely with physicians, nurse practitioners, and staff to develop and implement operational plans for practice management and strategic development. Prior to serving as the Administrative Director at VMG, Susan was the Director of Health Services (1994 - 1997) for Phoenix Healthcare of Tennessee when it was a fledgling managed care organization and assisted in the development of the commercial and TennCare managed care plans. Susan's foundation in healthcare was established as a nurse in the intensive care unit and emergency room where she worked in several hospitals across the Midwest.

Susan also serves as an Assistant Professor (1998 -) at Vanderbilt School of Nursing where her specialty is Health Systems Management. As part of the Health Systems Management curriculum, Susan lectures and develops content for a variety of classes that include Continuous Quality Improvement, Financial Management, Case Management, Community Systems Management and Theoretical Foundations of Nursing Administration.

Susan is a published author and often tapped for speaking engagements. She lectures nationally for the American Association of Managed Care Nurses on the subjects of Medical Informatics, Negotiation Skills and Nursing in the 21st Century. Susan has also shared her managed care expertise in a presentation for the Japanese Federation of Social Insurance Associations.

Susan received her Master of Science in Nursing and Bachelor of Science in Nursing from Vanderbilt University School of Nursing.

Question 1 - What are some of the crucial areas for reimbursement that NPs need to know? by HBInterview on November 13, 2000

Answer 1 - There are many key issues associated with reimbursement for services provided by advanced practice nurses (APNs). First and foremost, the advanced practice nurse should take responsibility and ownership of the process. APNS should first begin with reading their participation contracts with health plans to determine 1) if the plan credentials the APN and assigns a provider number, 2) claim submission requirements such as direct billing or billing under the supervising physician's name, timeframes for submission, etc. 3) appeals mechanisms for claims denials 4) covered services, 5)reimbursment methodology capitation vs fee for service, etc.
Second, APNS should become familiar with documentation requirements to support proper CPT coding. The Office of Inspector General has announced that it will be performing reviews of nurse practitioner, clinical nurse specialists and physician's assistant Medicare claims in 2001. The focus will be on compliance with HCFA rules and regulations. I would refer APNS to the Federal Register for clarification of specific areass of focus. I would suggest that the APN participate in an internal audit of documentation to determine if documentation supports the CPT code billed.

APNS should also participate in monitoring a sample of their collections against their charges monthly to ensure that they are being reimbursed according to contract and that charges are not being inappropriately denied.
You could write a book on this topic and still not cover all the nuances of APN billing and reimbursement! by Susan Cooper on November 15, 2000
Question 2 - Hi Susan Cooper:

I am a compensation consultant working in health care fields. I have noticed a downward trend in compensation of rural based mid-level practitioner's (nurse practitioners, physician assistants, etc.) since the Balanced Budget Act of 1997. Specifically, what is considered to be commercially reasonable is less today than four years ago.

The only significant causal related event that I can think could cause something like this is the lowering of full cost pass through of professional compensation in Rural Health Clinics. Of course, other open market forces could also be at play. What are your observations and comments?

Thank you.
J. Phillip Macon
by pmacon on November 13, 2000

Answer 2 - Thanks for the question. Unfortunately, I am not an expert in reimbursement for rural health clinics. I will speak about some generalities in the reimbursement environment. As you know, health care dollars are dwindling and we are all being asked to do more with less!

The Balanced Budget Act of 1997 was definitely a step forward for advanced practice nurses. The restrictions on settings for services provided by APNs was removed from the language. Payment is allowed for all settings as long as no other facility fee or other provider fee was being paid in connection to the service provided by the APN. As you know, the rules for reimbursement of APN services varies based on the type of setting. Guidelines for reimbursement can be found in your MEdicare Intermediaries Provider manual. However, in the office setting, the allowable reimbursement to APNs is 85% of the physician allowable if billed directly under the APNs name and provider number. For Medicare, the conversion factor for reimbursement has changed, ranging from a high of $36.6873/RVU in 1998 to a low of $34.7315/RVU in 1999. The conversion factor for 2000 is $36.61. Also, there may have been a change in the geographic conversion factors for Medicare RBRVS reimbursement that might have affet your rural clinics.

The commercial marketplace is very tight. Individual providers may have a difficult time negotiating favorable rates with large payers. Groups can sometime leverage their status in negotiations if the group is identified as a "necessary network provider". In the fee for service arena, discounts on charges are deepening. It is imperative that providers understand specifics of any payer contracts that they sign and identify on the front end potential risks and benefits. It is also important that providers not be pressured into signing contracts that pose significant financial risk through unfavorable rates.

Reimbursement of all providers is a tough nut to crack. It is imperative that your negotiation team for commercial payers include advanced practice nurses services, as well as physicians services, in the negotiation discussions and detail how they will be paid. Thanks again for the question. Susan by Susan Cooper on November 15, 2000
Question 3 - I currently employ several nurse practitioners in a variety of disciplines: internal medicine, plastic surgery, and ob/gyn. I would like to come up with a production-based incentive program for them, and have toyed with a straight productivity methodology, either based on dollars, RVU's, or visits. Anu suggestions? by robhardy on November 13, 2000

Answer 3 - What a great question! There are many formulas for determining bonuses/incentives and applicability of the formulas may vary based on the types of practices--independent, interdependent, or "extender" roles. Productivity formulas are fairly straight forward and work well in a fee for service environment, however do not work quite as well in a capitated environment. It is easy to get an accurqate count of visits. The disadvantage to this system is that even though a visit may be completed, reimbursement does not always flow back to the practice.

Profit based incentives work well. In this scenario, I would recommend basing the incentive on net margin. You can allocate the costs of practice or operating expenses to the nurse practitioner' practice such as salary, ancillary staff, rent, transcription, pager, malpractice, etc. Take your total collections subtract your operating expenses, arrive at net margin and set a percentage of net margin as the bonus.

Other providers use a quality based bonus system. In this formula, the provider's performance of HEDIS measures is compared to health plan or benchmark data. If the NP meets or exceeds the standard, there is an opportunity for a bonus.

The most important factor in determining how an incentive or bonus will be paid is to have clear language documented of the type of and methodology for determining the bonus and the frequency of the incentive. Hope this helps. by Susan Cooper on November 14, 2000
Question 4 - Susan - for government healthcare programs (e.g., Medicare and Medicaid), what should NPs do, at a minimum, to ensure that the government will not deny payment due to a failure to adequately document a service? Along those lines, what are some of the common mistakes, if any, that you see in this area?

Bill Sutton
H3GM, P.C.
Nashville, TN
by bsutton on November 14, 2000

Answer 4 - Thanks for this very important and timely question. As you may well know, the OIG has indicated that they will begin focused reviews of nurse practitioners and physician's assistants' claims and documentation in 2001. First, from a documentation standpoint, I would encourage nurse practitioners, as well as physicians, to become intimately aquainted with the documentation guidelines for Evaluation and Management (E/M) Services. Descriptors for levels of E/M services include seven components...history, examination, medical decision making, counseling, coordination of care, nature of presenting problem and time...with the first three components being key. (Buppert,1999) I would recommend, as a reference book, The Nurse Practitioner's Business and Legal Guide by Carolyn Buppert for an in depth discussion of Documentation guidelines. Some practices use visit templates to ensure compliance with documentation requirements.

Some of the common mistakes seen in documentation and coding include undercoding a visit, not documenting all services provided, not providing the documentation to support the level of service, and billing "incident to" as opposed to direct when incident to guidelines are not met. This is a complicated issue and I would advise all nurse practitioners to become knowledgable in the requirements for "incident to billing" found in their MEdicare State intermediaries provider manual. by Susan Cooper on November 14, 2000
Question 5 - What resources are available for reimbursement and billing for advanced practice nurses?
by HBInterview on November 16, 2000

Answer 5 - What an improtant question! There are several references that an advanced practice nurse should have available. First, there should always be a copy of the Medicare provider manual which can be obtained through the local Medicare intermiediary. Also, APNs should review notices that come out in the Federal Register for proposed and actual changes in the Medicare rules and regulations.
Two books that are extremely useful to the APN are both written by Carolyn Buppert, CRNPm JD. They are Nurse Practitioner's Business Practice and Legal Guide and The Primary Care Provider's Guide to Compensation and Quality: How to Get Paid and Not Get Sued. I have all of the above helpful references on many occasions. by Susan Cooper on November 16, 2000
Question 6 - I am working in a practice where reimbursement for mid-level providers has become a hot issue. I have three questions:
1. In a situation where a third party payor does not issue provider numbers to APNs, but allows billing under supervising physician numbers, is there any circumstance where fraudulent billing can occur?
2. What is the best response to a third party payor that does not recognize APN's as primary care providers? Is collective approach best, such as through TNA, or does individual letter writing carry any weight?
3. Some states have laws that mandate third party payors reimburse APN's. What is Tennessee's stand on this issue?
Thank you,
Kay Bone
by ikbone on November 16, 2000

Answer 6 - These are great questions. Reimbursement for APN's is a hot topic across the nation. To answer number one, there are definitely circumstances where fraud can occur but there are steps that you can take to prevent this from happening. In situations where a third party payor does not credential APN's and does not give a unique provider number, it is necessary for you to know what the requirements of the health plan are for billing under the supervising physician's provider number. Unfortunately, this varies from commercial plan to commercial plan. Some plans require that the physician be "on site". Some plans require that the physician be available for consultation. Some plans require that the physician be in the room, directly supervising the services. In Tennessee, we would like to see health plans adopt the Board of Medical Examiner's Rules for Supervising Physicians (0880-06) as the standard. There are several health plans that have agreed to this, but we still have much work to do. We have taken the approach of getting the requirements in writing so that we understand the rules of the game. Many provider relations departments have been happy to comply with our requests. This helps us avoid any confusion and/or possibility of noncompliance.

There are several strategies that are effective in working with health plans. There is definitely an opportunity for TNA to help leverage this issue. There is much work that has gone on at TNA that has moved this issue to the forefront. In fact, through Louise Browning's recent efforts, exceptional changes were approved by a local health plan that removed many of the barriers for APN practice and reimbursement. Networking with colleagues to identify common issues with reimbursement is helpful so that a cohesive approach can be utilized to address reimbursement issues. However, individual letters can and do make a difference. We have also found that health plan members can assist in leveraging change. An example of this is with midwifery care. Recently a patient presented to our faculty midwifery practice, but her health plan did not recognize CNMs in their provider panel. The patient went back to her employer to the HR dept. to voice her displeasure that midwifery care was not an option under her plan. The HR administrator made a call to the health plan. That afternoon, an agreement was reached for the services to be covered and reimbursement to be directed to the midwifery practice.

For the third questions, laws vary from state to state. The Tennessee code that addresses this issue is found in the insurance section. TCA 56-7-2407 and 56-7-2408 state that if an advanced practice nurse or certified nurse midwife provide services which are within their "lawful scope of practice", the insured, entitled to the benefits, is "entitled to reimbursement for such services, whether the services are performed by a duly licensed physician or a duly licensed nurse in advanced practice." In Tennessee this applies to CNMs, nationally certified nurse practitioners, CRNAs, or nationally certified cllinical specialists. Unfortunately, some health plans get around this by not recognizing APNs as members of their provider panels and then require their members to use in-network providers.

I anticipate that there will be action in the next year or so to address this issue at a statewide level. Certainly, working with your state and national nursing associations can help move these issues along. Good luck, you are definitely asking the right questions. by Susan Cooper on November 17, 2000

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