NP Billing and Coding for NPs Working Outpatient
Billing for NP services is a complex process with specific rules, and NPs need to be knowledgeable about the significant differences between direct and incident-to-billing rules.
Billing is an important component of providing documentation of NP productivity. NP billing can be completed in two primary ways: direct (independent) or indirect (or “incident-to”). With direct billing, the patient is scheduled and billed under the National Provider Identification (NPI) number of the NP providing the care. With indirect or “incident-to” billing, the patient may be scheduled under the physician or NP, but the bill is submitted using the physician’s NPI number. There is an additional type of billing called “split-shared billing” that Medicare began in 2022. Split-shared billing is less common in outpatient practice and a bit more complex. The following will review the key points for the most common billing practices of direct and indirect billing.
Direct billing is billed under the NP’s NPI number.
With direct billing, an NP can bill for any services the NP is legally authorized to perform in accordance with state law (or state regulatory mechanism established by state law) of where they are practicing.
Direct billing reimburses services the NP provides at 85% of the amount a physician would receive providing the same services (or 80% of the lesser charge) under the Medicare Physician Fee Schedule.
By utilizing the NP’s NPI number, direct billing practices succinctly account for the care that an NP provides.
In order to have an accurate, complete understanding of NP care in the U.S. and advocate more effectively, it’s essential for NPs to bill under their own NPI numbers. To increase NP reimbursement rates, NPs must advocate for direct billing under their own name and NPI number.
Indirect billing is billed under the physician’s NPI number.
With indirect billing, an NP still provides services but those services are billed under the physician’s NPI and reimbursed at 100% of the Medicare Physician Fee Schedule.
Indirect billing has limitations to what can be billed. Often new patients and new plans of care must be established by a physician, and at times may require direct physician supervision.
Indirect billing is more common in states with laws restricting NPs’ scope of practice.
By utilizing indirect billing practices, it undermines the ability to truly evaluate the level of care the NP provides as it is difficult to quantify NPs while billing under a physician’s NPI.
With indirect billing, an NP’s name is not reflected on the billing statement, and the care that they provide becomes “invisible” to payers.
An NP’s ability to demonstrate the clinical and financial outcomes of their care is impossible when using “incident-to” billing.
Documentation of the evaluation and management (E/M) of a patient visit requires significant time. Other key components critical to the visit administration are the current procedural terminology (CPT) codes that classify the E/M of a patient visit and the diagnostic code also known as the International Statistical Classification of Disease and Related Problems, 10th revision (ICD-10) code.
Generally speaking, the CPT code has three contributing components:
- Patient type (new or established patient)
- The setting of service (office or other outpatient, hospital inpatient, emergency department or nursing facility)
- Level of E/M service provided based on components of: history, examination, medical decision making, and/or time spent with patient, and time spent before and after that contribute to the care of the patient.
ICD codes comprehensively communicate between healthcare providers to describe classifications of diseases, injuries, health encounters, and procedures. Additionally, these codes are utilized on macrolevels by public health officials, health plans and researchers to track public health conditions and epidemiological trends, measure health outcomes, make clinical decisions, and identify fraud and abuse in payment systems.
Billing and Coding for NPs Working Inpatient
Usually, there is an individual from the billing department who is assigned to a particular service or unit for inpatient billing services. It is valuable to be familiar with the billing and coding personnel responsible for billing for the services performed by NPs. Meeting with this individual(s) can benefit both the NP and the institution, especially if the institution has not had much experience billing for NP services. Billing systems (e.g. paper versus online) vary greatly by hospital.
Billing services are categorized by the type of visit:
- New
- Consultation
- Established
- Outpatient
These are then further stratified based on history, examination and medical decision making (MDM). The history and examination will depend on the complexity of the services. The examination may be problem focused, expanded problem focused, detailed, or comprehensive. These levels are determined by the presence or absence of a history of present illness, review of systems, and personal family/social history. The MDM is divided into straightforward, low complexity, moderate complexity, or high complexity.
There are also specific categories for pre- and post- operative patients, and established outpatients. A split/shared evaluation and management visit is jointly provided by a physician and an independent non-physician practitioner (e.g., nurse practitioner, physician assistant, certified nurse specialist, or certified nurse midwife) from the same group practice.
Specific to the inpatient setting, an NP may not bill for services if the hospital fully compensates him/her. In these cases, the NP’s time is rolled into the hospital bill. For an inpatient NP to bill for any services, the NP must receive some of his/her salary from the practice plan.
Buppert, C. (2021). Negligence and Malpractice. Nurse Practitioner’s Legal and Business Practice and Legal Guide. (7th Ed.) Jones & Bartlett Learning, Burlington, MA.
Buppert, C. (2020). How to bill for nurse practitioner services’ the basics. Medscape.
Centers for Disease Control [CDC] (2023). International Classification of Disease, Tenth Revision, Clinical Modification (ICD-10).
Centers for Medicare and Medicaid Services [CMS]. (2023). Physician Fee Schedule: Calendar year 2023 Proposed Rule.
Patel S., Huskamp H., Frakt A., Auebach, D., Neprash, H., Barnett, M., James, H. & Mehrotra, A. (2022) Frequency of indirect billing to Medicare for nurse practitioner and physician assistant office visits. Health Affairs, 41(6). doi:10.1377/hlthaff.2021.01968
NAPNAP, Professional Issues Committee, Sheehan, A., Busch, D., & Kline-Telford, A. (2022). NAPNAP position statement on reimbursement for nurse practitioner services. Journal of Pediatric Health Care, 36(6).
Strategies to Prevent Malpractice Cases Against an NP
- Read NAPNAP’s Position Statement on Malpractice Insurance for Nurse Practitioners
- Be mindful when establishing provider-patient relationships. Whenever an NP provides medical advice, ensure all cautions and standards are exercised as in a professional practice setting with a patient.
- Be aware of established standards of care and evidence-based practice, and work within those standards and clinical practice guidelines.
- If the practice settings have adopted clinical practice guidelines, standard operating procedures, or policies and procedures, use them with each patient.
- If unsure, adopt a conservative approach.
- Always consider and rule out the most serious conditions first.
- Practice within your education, training, and scope of practice.
- Communication is critical to both the patients and families and among healthcare colleagues.
- Ask for help if needed. Do not be pressured to manage cases outside of your expertise.
Nurse Practitioner Continuing Education (CE)
Pursue professional development and increase your PNP employment options through educational opportunities such as a doctorate, post-master’s degree, or other credential.
Consider the following questions:
- Do you want to go back to school or develop new skills while you’re working? If so, one of your PNP job search objectives could be to find an employer who supports education benefits. Working at a university hospital with tuition reimbursement benefits, locating near an academic institution, and utilizing online options are all factors to consider.
- Can you afford to attend a full-time education program? Financial assistance may be available through industry and government-sponsored programs, grants, scholarships, and loans. Talk to professionals at academic institutions who are versed in these issues, such as guidance counselors and academic advisers.
- Use your current CE benefits, consider negotiating for CEs in your current role, or when searching for a new PNP opportunity, utilize CEs being offered as a point of negotiation.
As a practicing NP, CE is necessary to ensure the delivery of current evidence-based practice and is also needed to maintain certification. Some states also have CE requirements for maintaining licensure. There are many resources to obtain the necessary ongoing CE.
- NAPNAP’s PedsCESM: provides online CE resources on various topics for NPs and other health care professionals. Offerings that include pharmacology content are designated with an Rx. Be sure to use the course catalog search features.
- NAPNAP’s National Conference in Pediatric Health Care and Pediatric Virtual Symposia: NAPNAP offers annual in-person and virtual events as a way to provide exposure to current best practices, network with colleagues, learn about the latest products/devices from industry and to earn many CE contact hours.
- Journal CE: Many professional journals provide opportunities for continuing education linked to published journal articles. NAPNAP’s scholarly journal, Journal of Pediatric Health Care (JPHC), offers CE three times per year.
- NAPNAP Chapters: Membership in the local NAPNAP chapter is an excellent way to obtain CE. Most chapters offer CE opportunities throughout the year
- Unit/Hospital-based CE: Take advantage of hospital-based grand rounds, unit-based lectures and organizational offerings. These opportunities are often complementary to employees and offered on an ongoing basis.
- Quality Improvement: Many quality improvement activities, particularly those initiated by the Agency for Healthcare Research and Quality (AHRQ) are or may qualify for CE.
