By Carolyn Buppert
Carolyn Buppert, JD, NP is a health care attorney. Her legal clients include medical practices, institutions, non-profit organizations and individual clinicians throughout the United States. She is the author of eight books, and her column offers tips and advice on financial issues. Visit her website to learn more about her: www.buppert.com.
Medicare is on the lookout for billing errors. The Center for Medicare and Medicaid Services (CMS) reports an error rate of 7.8%, which translates to a cost of $24 billion annually. The government— in this instance meaning the Justice Department, the Office of the Inspector General, and CMS—wants to decrease billing errors and any abuse of Medicare before the money runs out. As a result, various agencies are conducting audits. One focus is clinician documentation— more specifically, the failure to document the medical necessity of hospital days and the failure to properly document services furnished in offices and facilities.
Auditors will request documentation for a specific visit with a particular patient on a particular day. If the record does not support the CPT code billed, the Medicare carrier may decline to pay or ask that payments already made be repaid. Auditors look at medical records of hospitalized patients to determine whether or not the hospital stay was necessary and the hospital billed appropriately for it.Common types of billing errors include rendering medically unnecessary services, incorrect coding, and a lack of documentation to support the level of visit billed. Auditors will be on the lookout for misrepresentations of:
the actual provider
the service(s) provided
Were the mistakes always in favor of the provider?
What would an objective observer think about these mistakes?
Could the mistake have resulted from a reasonable differing in interpretation of the rules?
Keep in mind that clinicians attest that they are aware of the rules by signing the Medicare enrollment application. “I didn’t know” is not a valid excuse.
The following 10 principles will help nurse practitioners (NPs) avoid billing errors when dealing with Medicare.
1. In any geographic area and any setting, NPs can bill for services for which a physician can bill and which are in the NP’s scope of practice.
2. NPs cannot supervise a resident for billing purposes.
3. NPs cannot bill for work performed by students. (NP and medical students are irrelevant for billing purposes; however, they can supply the review of symptoms, past medical history, and social history.)
4. In hospital documentation, NPs (and physicians) must substantiate the medical necessity of a stay.
a. No good: “Doing well. Continue as planned.”
b. Good: “Paroxysmal atrial tachycardia continues, with occasional symptomatic pauses of 3-minute duration. Digoxin level still subtherapeutic. At risk for pauses of longer duration until adequately medicated. Will monitor rhythm another 24 hours and repeat digoxin level in a.m.”
5. For 99% of medical practices, “incident to”—a form of billing where a physician or NP legally may bill for work not personally performed—is applicable only in the office setting. I say 99% because incident-to billing is technically permissible in two improbable scenarios, ie, in a patient’s home or in an institutional office. In the first instance, both the NP and physician would need to be in the patient’s home, which most practices find inefficient. The second unlikely situation is where a physician has rented office space within a skilled nursing facility and the physician, NP, and patient all are in that space. To bill incident to, a physician must employ or contract with the NP, must conduct the initial service, must be physically present in the office suite at the time the NP is seeing the patient, and must remain involved in the care of the patient. If all of the incident-to rules are followed, a physician may bill Medicare under his/her own provider number and receive 100% of the Medicare Physician Fee Schedule rate.
6. “Shared visit” rules apply in hospitals to inpatients, outpatients, and patients being seen in the emergency department. The rules on shared visits allow a physician who employs an NP to bill for that NP’s evaluation/management services under the physician’s provider number if the physician has provided at least a face-to-face visit with the patient that day.
7. “Incident-to” billing and “shared visits” require attention to specific rules. If the practice follows the billing rules correctly, it may receive 100% of the Medicare Physician Fee Schedule rate. If the rules cannot be followed, then NP services must be billed under the NP’s provider number, and Medicare will pay 85% of the fee schedule rate.
8. For every service rendered, write a note that justifies the medical necessity of that service. If a service is not medically necessary, do not perform it.
9. Know Medicare’s rules governing choice of CPT code and the documentation required to justify each code. Medicare’s Evaluation and Management Services Guidelines can be found at
10. Sign and date all medical records. Handwritten signatures must be legible. If your signature cannot be easily read, print your name next to your signature. Electronic signatures are acceptable, while signature stamps are not.
Although there are additional rules for billing Medicare, the 10 principles outlined in this article are the most important in terms of surviving a Medicare audit.