HCFA Issues Instructions Implementing NP/CNS Reimbursement
On March 26, 1998, the Health Care Financing Administration (HCFA), the federal agency responsible for administering the Medicare and Medicaid programs, issued a much-awaited program memorandum (Transmittal No. AB-98-15, dated April 1998) implementing direct Medicare reimbursement for nurse practitioners (NPs) and clinical nurse specialists (CNSs). Section 4511 of the Balanced Budget Act of 1997 made direct reimbursement for Medicare Part B services provided by NPs and CNSs available, regardless of geographic area, as of January 1, 1998. The HCFA memorandum informs local Medicare carriers and intermediaries (contractors who administer the Medicare program in each state) of this change and provides instructions on its implementation. (The memorandum also addresses payment for physician assistant (PA) services, which were affected by a separate provision in the Balanced Budget Act.)
Payment for Services Provided by NPs and CNSs
The memorandum explains that the new law “removes the restrictions on the type of areas and settings in which the professional services of NPs [and] CNSs ...are paid for by Medicare.... payments are allowed for services furnished by these ...providers in all areas and in all settings permitted under applicable state licensure laws” as long as “no facility or other provider charges or is paid any amounts with respect to the furnishing of” the NP’s or CNS’s service. Ordering and referral services are included in the payment for NP and CNS services; no separate payment is made for them. This is consistent with Medicare policy for physician payment.
The memorandum explains that “in most cases, separate payment is allowed for NP ...and CNS services provided in a facility setting.” Using partial hospitalization services as an example, the memorandum notes that “these professional services are unbundled ...and NPs and CNSs must bill the Part B carrier directly for such services....” (Under Medicare law, an NP or CNS may also agree to have the facility, physician or physician group for whom she or he works as an employee or contractor submit the claims directly to Medicare).
The memorandum also gives an example of where direct payment will not be made to NPs and CNSs: Because services of NPs and CNSs in Rural Health Clinics and Federally Qualified Health Centers are included in an “all-inclusive” payment rate that “specifically accounts for the services of these ...practitioners,” separate payment for those services is not permitted. In other words, NP and CNS services are not unbundled from payments to RHCs and FQHCs. ANA is currently examining this proviso and its possible impact, if any, on NPs and CNSs who practice in those settings.
Although the guidelines provide these two examples of where direct payment will and will not be allowed for NP and CNS services, the guidelines do not review every setting in which NPs and CNSs provide services. This leaves the carriers with some discretion in deciding which claims they will pay based on a determination as to whether services are bundled or unbundled. However, carrier policies must be consistent with Medicare law. NPs and CNSs who are aware of carrier policies that exclude specific settings (other than RHCs and FQHCs) should inform ANA or their state nurses association (SNA) as soon as possible. ANA will continue to work with HCFA to seek clarification on payment in different settings and to resolve any issues that arise.
Services provided by NPs and CNSs will generally be furnished under the NP’s or CNS’s own provider numbers. These provider numbers are obtained from the local Medicare carrier, and should be indicated on the Form HCFA-1500 (the standard Medicare Part B billing form) when a claim for a service provided by an NP or a CNS is submitted.
Payment Amount
Consistent with the new law, the memorandum explains that NP and CNS services are paid at 80 percent of the actual charge or 85 percent of the physician fee schedule amount, whichever is smaller. (Previously, payment was made at 85 percent of the physician fee schedule amount in rural counties and, for NPs, in nursing homes; services provided in hospital settings were reimbursed at 75 percent of the physician fee schedule amount).
“Incident To” Services
The memorandum makes clear that “services provided ‘incident to’ physicians’ services ...are not affected” by the new law. Such services must continue to meet the current requirements for “incident to” services (i.e., provided by employees under direct physician supervision, etc.) They will continue to be paid at 100 percent of the physician rate. HCFA indicates that it is “considering future policy changes” which might affect this rate, but that it is taking no action to change it at this time. This means that, for the time being, services provided by an NP or a CNS can be billed directly at 85 percent or (where those services qualify) by the physician at 100 percent. HCFA has indicated for some time that it will examine policy changes concerning “incident to” payment. ANA plans to work closely with HCFA (and other interested groups) before any changes are made.
The memorandum also reiterates that “incident to” payment is not available for services provided to hospital inpatients or outpatients. This is consistent with current Medicare policy. It should be noted, however, that this only bars separate payment for services provided “incident to” those of a physician. It does not prevent separate billing for services provided by NPs and CNSs under their own provider numbers.
Making Up for Lost Time
A February 25, 1998 memorandum from HCFA to carriers and intermediaries instructed them to hold claims for services until they have final instructions and their computer systems have the necessary software. Now that instructions have been issued, there may be additional brief delays in operationalizing them. This does not mean that NP and CNS services are not yet covered--they have been covered since January 1, 1998. NPs and CNSs should hold onto billing information and submit claims for services once they have received a provider number from their local carrier. According to the April memorandum, “legally performed [NP or CNS] services furnished on or after January 1, 1998, may be back billed and paid once a billing number is assigned, provided the claims are timely filed.” The February 25 memorandum also makes clear that “payment should be made [by the carrier] for any applicable interest.” Further, “in order to minimize the impact on new practitioners,” the carriers are instructed by the April memorandum to process NPs’ and CNSs’ applications for provider numbers “on a priority basis in the most expeditious manner possible.” Carriers are also instructed to include information about NP and CNS billing in their next regularly scheduled provider bulletin.
Next Steps
ANA will carefully monitor how the carriers and intermediaries carry out these new instructions and will continue to work with HCFA to seek clarification on any unresolved problems or issues. ANA will work closely with the state nurses associations (SNAs) to identify these issues and to resolve them.
NPs and CNSs should contact their local carriers as soon as possible to apply for provider numbers. NPs and CNSs who work in a facility or in a physicians’ office or clinic can let their billing departments know that the new instructions are being distributed to the carriers and intermediaries.