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PAs authorized to receive direct payment under Medicare

Updated: Mar 28, 2023

As part of the final 2022 Physician Fee Schedule, the Centers for Medicare and Medicaid Services (CMS) finalized numerous Medicare coverage and payment policies that directly impact PAs.

Below is a brief summary, provided by the AAPA, of key policy changes which are effective January 1, 2022.

Direct Payment

In the rule, CMS permanently authorized PAs to receive direct payment from the Medicare program for services provided. Formerly, payment for services provided by PAs was required to be made to the PA’s employer. The inability to be paid directly hindered PAs from fully participating in certain practice, employment and/or ownership arrangements, prevented them from reassigning their payments in a manner similar to physicians and APRNs, and created additional administrative barriers to hiring and utilizing PAs.

Similar to most physicians and nurse practitioners (NPs) who already have access to direct payment, the majority of PAs will maintain their current employment relationships with reimbursement for their services continuing to flow to their employers. However, being eligible for direct payment will be beneficial to PAs who want to work as independent contractors, own a practice or medical corporation, and PAs who work in Rural Health Clinics.

The change only applies to Medicare and does not change policies pertaining to Medicaid or commercial payers. Also, Medicare regulations defer to state law. If state law or regulations prohibit a PA from receiving direct payment, those restrictions would have to be removed before Medicare will directly pay PAs in the state.

Split/Shared Visit Billing

CMS made significant changes to longstanding policies for split (or shared) E/M visits. Starting January 1, 2022, critical care services and certain visits in skilled nursing facilities and nursing facilities will now be eligible for split (or shared) billing.

CMS also changed the definition of a “substantive portion” of a split/shared service in the hospital setting which is used to determine if a claim for a service jointly performed by a PA (or NP) and physician can be submitted and billed under the physician’s name and NPI. For 2022, if the physician personally performs either the history, physical exam, or medical decision-making, in its entirety, the services can be submitted under the physician’s name. Or, the service can be billed under the health professional who spends more than half of the total combined encounter time delivering care to the patient. Beginning in 2023, only time will be used to define a substantive portion of care and the professional who spends the majority of time providing care to the patient is the one under whom the service should be billed.

CMS also implemented a claim modifier that will be required to be placed on split (or shared) claims to inform future policy considerations and help ensure program integrity.

Behavioral Health Flexibilities The agency finalized its proposed behavioral health flexibilities that will make it easier for Medicare beneficiaries to access needed behavioral/mental health services from PAs, physicians and certain other health professionals. Specifically, CMS will now include a patient’s home as an allowed originating site for mental health services after the end of the public health emergency, allow certain audio-only mental health services be provided to beneficiaries located in their home (if the beneficiary is unable, or does not wish, to use two-way audio/visual technology), and authorize RHCs and FQHCs to provide mental health visits via telemedicine.

RHC and FQHC-employed hospice attending physicians CMS is implementing Section 132 of the Consolidated Appropriations Act of 2021 that will allow both Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) to receive payment for hospice “attending physician” services. PAs are considered attending physicians under the Medicare hospice benefit. This change will remove restrictions on RHC- or FQHC-employed or contracted PAs, physicians and NPs providing hospice attending physician services while working at the RHC or FQHC, and these centers will be authorized to receive payment for such services under the RHC all-inclusive rate and FQHC prospective payment system, respectively.

Direct Supervision CMS sought input on whether the temporary ability to use audiovisual communication to meet the requirements of direct supervision during the Public Health Emergency should be ended, continued, or made permanent. Typically, direct physician supervision is required when PAs and NPs deliver care in the office or clinic under Medicare’s “incident to” billing provision with PA- or NP-provided services being billed under the name of a physician. AAPA provided comments to CMS opposing the use of direct supervision via audiovisual communication as it relates to PAs and NPs out of concern that it would increase “incident to” billing. “Incident to” billing “hides” the professional services of both PAs and NPs and leads to a lack of transparency in data collection. CMS decided to make no changes or decisions regarding the issue until a later date.


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