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Commercial Payers Changing the Rules for APP Billing

The reimbursement of services provided by advanced practice providers is a complex issue. Guidelines may vary based on the type of APP, and the rules surrounding APPs are impacted by federal and state regulations, facility-imposed standards of care, and billing requirements. The latter may include payer-specific protocols, which may differ by local Medicare contractor. In most cases, services provided directly by an APP (and billed as such) are reimbursed at 85 percent of the allowable physician rate.[1] When billed under a physician’s identification – often referred to as “incident to,” which is a Medicare term – the services are paid at 100 percent. To date, most commercial payers have followed “incident to” guidelines, allowing APPs to be billed under the physician without much ado.

Recent announcements by Blue Cross Blue Shield of Tennessee and United Healthcare have given even more complexity to this issue. If your practice employs an APP, it’s important to be aware of the following promulgations by these major payers regarding requirements for billing for APPs:

  • BlueCross [of Tennessee] requires all nurse practitioners and physician assistants to be credentialed and contracted before providing services to its members. This includes nurse practitioners and physician assistants who are employed by a physician group already contracted with BlueCross. This requirement went into effect on Jan. 1, 2017. For more information, click here.
  • Effective for claims with dates of service on or after September 1, 2017, United Healthcare… [is] requir[ing] physicians reporting evaluation and management (E/M) services on behalf of their employed Advanced Practice Health Care Professionals, to report the services with a modifier to denote the services were provided in collaboration with a physician. United Healthcare will accept the modifier SA on claims for these services when provided by nurse practitioners, physician assistants and clinical nurse specialists. In addition, the rendering care provider’s national provider identifier (NPI) must also be documented in Field 24J on the CMS-1500 claim form or its electronic equivalent. Use of the modifier SA and documentation of the rendering care provider will assist United Healthcare in maintaining accurate data with regard to the types of practitioners providing services to its members. For more information, click here.

These announcements signal a spotlight on payers’ treatment of APPs as separate and distinct providers of care. Only time will tell if these new policies lead to better – or worse – reimbursement rates for these practitioners.


[1] Certified nurse midwives are paid at 100% of the Medicare allowable. 

About The Author

Elizabeth Woodcock is the founder and principal of Woodcock & Associates. She has focused on medical practice operations and revenue cycle management for more than 25 years. She has led educational sessions for a multitude of national professional associations and specialty societies, and consulted for clients as diverse as a solo orthopaedic surgeon in rural Georgia to the Mayo Clinic. She is author or co-author of 17 best-selling practice management books, to include Mastering Patient Flow and The Physician Billing Process: Avoiding Potholes in the Road to Getting Paid. Elizabeth is a Fellow in the American College of Medical Practice Executives and a Certified Professional Coder. In addition to a Bachelor of Arts from Duke University, she completed a Master of Business Administration in healthcare management from The Wharton School of Business of the University of Pennsylvania. She is currently a doctoral student at the Bloomberg School of Public Health of Johns Hopkins University.

The contents of The Sentinel are intended for educational/informational purposes only and do not constitute legal advice. Policyholders are urged to consult with their personal attorney for legal advice, as specific legal requirements may vary from state to state and/or change over time.

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