Do you employ a PA or NP? — Practice Management Pearls


Lisa P. Shock, MHS, PA-C

NPsIn this time of health reform, a crucial starting point for enabling overburdened primary care providers (PCPs) to move toward enhanced primary care delivery is to leverage nurse practitioners (NPs) and physician assistants (PAs) to bolster PCP productivity and patient access.

PAs and NPs are able to perform about 80% of a primary care physician’s work while collecting about 70% as much in revenue, despite reduced billing amounts (for instance, from Medicare).   Capturing maximum reimbursement is a challenge for any medical practice, but there are some special nuances you must be aware of when working with PAs and NPs so that you capture all of the proverbial “money on the table.”

Here are the 5 Keys to Successful Reimbursement when employing PAs and NPs:

1 – Medicare

Does your practice REALLY understand “Incident to” Services?

Have you met the criteria to bill and collect at 100% or are you better off billing under the PA or NP’s own provider number?

Is your documentation and coding sufficient to survive an audit of incident-to billing?  Having sound processes and policies as well as an in-depth understanding of the rules is important to compliance and reimbursement success.

2 – Medicaid

State budgets are tapped.

Some states want to limit PA/NP reimbursement even in Federally Qualified Health Centers (FQHCs) where the original Federal guideline recommends full reimbursement.

Not every state credentials PAs and NPs.  This results in a wide variation on reimbursement rates. It is critical to understand not only the current Medicaid policies in your state, but also keep abreast of any political changes that may be on the horizon, as those changes or mandates could affect reimbursement for your practice.

3 – Third Party Payors

New contracts often mandate individual credentialing of PAs and NPs.  Reimbursement rates vary by state, but in NC, new BCBS and Aetna policies are mirroring Medicare Incident To rules – with a flat reduction in reimbursement at 85% and no provision for incident to “capture” of funds.

Third party payors such as Blue Cross Blue Shield (BCBS) are leading the charge to reward primary care practices for quality care and offer higher reimbursement rates with Patient Centered Medical Home (PCMH) designations and/or participation in Blue Quality Recognition programs.  Careful review and timely negotiation of contracts is especially important, as these new programs are unveiled.  Many practices are seeing double-digit reimbursement increases as a result of participation in third party payor quality programs, and PA/NP services are also included.

4 – Uninsured/Under insured

Clinics and hospitals are going to have to consider alternate payment models for cash paying patients.  Balancing overhead costs and efficiency is important for any practice, but if you are in a location with a higher population of uninsured/under-insured patients, a thorough examination of collections is necessary.  PAs and NPs do well in these underserved practice environments and the cost to expand the care team with a PA or NP is often cost effective.

5 – Perpetuation of myths and bad information

This may be the most important one of all.  Practice Managers, consultants and office administrators frequently have little to no understanding of the supervision requirements or the clinical capabilities (and therefore “bill-ability”) of PAs and NPs.  If this is the case, delivered services as well as collectible revenues are under available and underestimated.   Ensuring a complete understanding of the state statutes and the medical board requirements is a must.  The ability of the physician to delegate clinical duties to the PA/NP, thereby defining the scope of practice, is critical to developing efficient, quality care delivery systems as well as maximizing reimbursement.

The typical PA brings in revenue of $231,000 with an average salary of $84,000, according to The MGMA Physician Compensation and Production Survey: 2008 Report Based on 2007 Data.  After covering the cost of his or her own salary, benefits, and incremental overhead a typical PA or NP can boost your bottom line by an estimated $30,000 or more.   Developing a clear understanding of the above policies will ensure that your practice realizes a positive return on its PA/NP staffing investment.


About the author:

Lisa P. Shock, MHS, PA-C, is a seasoned PA who has practiced in primary care and geriatrics since her days at the Duke PA program in the late 90s. She enjoys part time clinical primary care practice and is the President and CEO of Utilization Solutions in Healthcare – a specialty consultant company for physician practices and hospitals, offering a wide range of services to help implement and improve upon the utilization of PA and NPs in the health care system.  Contact her with questions at





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