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The Rural Health Clinic Services Act of 177 authorized the first Medicare coverage of PA services. Since 177, a wealth of reform has revolutionized coverage of PA services. Medicaid currently reimburses all medical services rendered by PA's at either an equal or slightly lower rate than that paid to physicians. Private insurers cover PA services for the most part, as long as they are part of the supervising physician's bill or a part of a global surgery fee. Additionally, TRICARE reimburses all medically necessary services rendered by PA's at 85% of the Physician rate and 65% of the physician's fee when the PA is the first assist in surgery. When it comes to Medicare, the Balanced Budget Act of 17 (BBA) has provided PA's with the most expansive coverage to date (Third, 1).
Over the past twenty years Congress expanded Medicare Part B payment to cover services rendered by PA's only in hospitals, nursing facilities, rural Health Professional Shortage Areas (rHPSA), and surgery as first assist. Since the enactment of the BBA on January 1, 18, PA coverage has been expanded even further. Some important changes to Medicare coverage resulting from the BBA involve the removal of practice location restrictions, increased reimbursement rates, independent contractor arrangements, and the issuance of provider numbers. The removal of the restrictions on the type of areas and settings in which PA's can serve and still be covered by Medicare is one change authorized by the BBA that has made a large impact on the PA profession. PA's can now practice in all settings, i.e. hospitals, nursing facilities, homes, offices, clinics, and surgical first assisting, and still be reimbursed by Medicare. Another change in Medicare reimbursement is the new fee schedule for PA's. In all settings, PA's are now reimbursed at 85% of the physician fee schedule. In some settings, this is an increase. Prior to the BBA, PA services in the hospital setting were reimbursed at 75% and PA services as surgical first assist were reimbursed at 65%. Under the BBA, PA's can now opt to select a W- or an independent contractor employment arrangement, however payment is only made to the PA's employer regardless of the employee arrangement(Expanded, 1-). An additional change in Medicare policy is the new requirement that PAs who serve Medicare patients have a provider identification number (PIN). Services can now be billed separately under the PAs own PIN (Moore, 1). Lastly, Medicare altered some of their billing requirements. Prior to 18, PAs were directed to use modifier codes to discriminate services rendered in hospitals, nursing facilities, and rHPSA. This is no longer a Medicare requirement. The only time PAs must use a modifier code is when they first assist in surgery (Expanded, 1-).
An important billing issue that remained unchanged by the BBA is the ability of PAs to bill "incident to". Medicare considers services rendered "incident to" as "services furnished as an integral although incidental part of a physician's personal professional services" (Third, ). A PA can bill "incident to" if the following conditions apply the service must be medically necessary, it must be usually performed in a physicians office, and it must be within the PAs scope of practice; the physician should be on-site when the service is rendered, and the physician must personally see the patient on the patient's first visit; and the PA can not be an independent contractor (Third, ). The benefit of billing "incident to" is that if all of the above requirements are met, Medicare will reimburse the service rendered at 100% of the physician fee schedule. Usually billing "incident to" is advantageous because it generates more revenue for the practice. Not only is more revenue in general a good thing, it will also make the PA a more valuable member of the practice because he/she can generate the same monetary gains for the practice as another physician could, while employing a PA costs the practice less than hiring another physician.
The AAPA is very attentive to the current reimbursement issues facing today's PAs. Although over the past two decades the PA profession has had many victories when it comes to reimbursement, the profession still has compensation concerns. A noteworthy reimbursement issue tackled by the AAPA in the 00 was the elimination of split billing by Medicare. Previous to October 5, 00, PAs and their supervising physicians had to bill separately for evaluation and management (E/M) services provided by both clinicians on the same day. The new policy allows the physician and PA to share visits made to the same patient with the combined work covered at 100% of the fee schedule. The new procedure does not extend to hospital procedures. The clinician who does the majority of the procedure is the individual whose name and number should be billed (Medicare, 1). Additionally, the Academy was successful in making it easier for PAs to enroll with Medicare and they have created a web-based education program on reimbursement issue for PAs available at www.aapa.org/gandp/reimburs-issues.html (Crane, ).
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