Medicare is the nation’s largest health insurance program. It provides coverage for more than 40 million people who are age 65 or older or disabled. Even if your practice does not include Medicare patients, the insurance payors that you do work with are, and have been, influenced by the rules and regulations and policies derived from Medicare decision making. In many aspects of healthcare insurance, Medicare has set the standards which in many cases have become adopted as the benchmark for other companies in the industry to follow.
Medicare is a federal program under the Centers for Medicare and Medicaid Services (CMS). However, rules regarding billing for physician services provided by PAs are very different between Medicaid (called Medi-Cal in CA) and Medicare. Medicare Part B covers professional services such as those provided by physicians and PAs. In California Medicare Part B is administered by Noridian Healthcare Solutions: Medicare, Jurisdiction E “Medicare administrator” for our state.)
The Balanced Budget Act of 1997 clarified and simplified Medicare regulations and reimbursement for PAs. It expanded the areas of coverage for PA provided services and eliminated restrictive requirements. PAs in California should enroll as Medicare providers through the Nordian Healthcare Solutions link provided above. When billed using their own name and identifier, Medicare covered services provided by PAs are reimbursed at 85% of the physician fee schedule. Reimbursement is paid to the employer or supervising physician and not directly to the PA. Medicare also reimburses for PAs who are the first assistant at surgery when all appropriate criteria and regulations are met. Medicare reimburses a physician first assistant at 16% of the primary surgeon’s fee and a PA receives 85% of the 16% (13.6%).
Medicare also allows for “incident to” billing for covered services provided by PAs. Services billed as “incident to” are reimbursed at 100% of the physician fee schedule and the bill is submitted using the physician’s name and identifier. There are significant restrictions regarding this type of billing and there is some confusion as to how this is applied in various situations. You should not use this billing option unless you are certain that you are complying with all of the regulations and you have adequate documentation. “Incident to” billing requires that the following criteria are met:
- Can only be used for services provided in an office / clinic setting. It cannot be applied to hospital, ED or hospital clinic.
- The service is one that is typically provided in a physician’s office.
- The physician must be in the suite of offices when the PA provides the service.
- The service is within the PA scope of practice under state law.
- The physician must personally treat and diagnose the patient on the first visit to the practice and when there is a new medical problem / diagnosis.
- Note: The above restrictions and limitations do not apply when the PA is billing under his/her own name and identifier.
Watch the CAPA Magazine and the CAPA website for updates on reimbursement issues.
MEDI-CAL is California’s version of Medicaid. Both Medicaid and Medicare are administered under the federal Centers for Medicare and Medicaid Services (CMS). Be aware that although Medicare and Medi-Cal fall under the administration of CMS, the rules and regulations for billing under these two payers are very different.
The Medi-Cal billing manual, under a section titled Non-physician Medical Providers (NMP), clearly recognizes the services of PAs and will reimburse for physician services provided by PAs at 100% of what a physician would receive for those covered services. The NMP section of the Medi-Cal Provider Manual under General Medicine describes the required enrollment process with the current forms to be used along with other criteria for allowable reimbursement for PAs. Enrolled PAs must work with a physician who is an enrolled Medi-Cal provider. The PA is not considered an independent Medi-Cal provider.
The billing for covered medical services provided by a PA is submitted under the (Medi-Cal enrolled) physician’s name and identifier with a modifier “U7” which is used to indicate the service was provided by a PA. Other modifiers may additionally be required for a particular service. Before 2009, PA billing was severely limited to a short list of CPT codes thereby restricting what services could be reimbursed. CAPA’s legislative efforts resulted in the elimination of that restrictive list and the manual now states that:
Covered services for PAs include services performed by a PA within the scope of practice when the services would be a covered benefit if performed by a physician and surgeon.
For PAs who provide first-assistant at surgery services, the Manual, under the section Surgery: Billing With Modifiers, explains how to use modifiers “99 = U7 + 80” along with the appropriate surgical procedure code billing under the physician.
Note: When reading this Manual, pay attention to the date in the right lower corner of the page which indicates the last date when any changes were made to the page.
Commercial insurers recognize the services PAs provide in most settings. Insurance companies have developed their policies that may be, not only different in each state, but different in each region. The billers in a medical practice or group should familiarize themselves with each plan’s policy and mechanism for reimbursing services provided by PAs. Remember, reimbursement is not for “PA services” but rather for physician medical services provided by a PA.
Most commercial insurers request that the bill be submitted under the name and identifier of the “contracted” physician – but confirm that with each company. Also if they say to just bill for services provided by the PA “incident to” – meaning under the physician – be aware that that does not necessarily mean that the strict Medicare incident to rules apply. They typically do not.
Most commercial insurers do not “credential” PAs because they are not the “contracted provider with the insurance company.” Discussions suggest that this may change in the future.
Important Note: The April 2016 TRICARE Provider Handbook, unless otherwise notified, is effective July 1, 2016, for currently contracted providers, and will be effective immediately for providers newly contracted on or after April 1, 2016.
Although ‘furlough,’ ‘layoff,’ and ‘reduction in force’ is sometimes used interchangeably by employers, their true meanings are quite different. Knowing the difference will help you protect yourself and access the benefits available to you.
Furlough / Reduction in Hours
A furlough is considered to be an alternative to layoff. A furlough is distinguishable from a layoff or termination in that it is temporary, and the employer expects to have a continuing working relationship with its employees.
When an employer furloughs its employees, it requires them to work fewer hours or to take a certain amount of unpaid time off. For example, an employer may furlough its nonexempt (hourly/wage) employees one day a week for the remainder of the year and pay for only 32 hours instead of the normal 40 hours each week.
For exempt (salaried) employees, employers must continue to pay them on a salary basis and not jeopardize their exempt status under California Wage Orders or the Fair Labor Standards Act (FLSA). Therefore, if employees perform any work in one workweek, their employers must pay them for the full salary of the workweek, regardless of the number of days or hours worked. However, both the California Labor Commissioner and FLSA state that exempt employees do not have to be paid for any week in which they do not work. So exempt employees who do not work for a full workweek do not need to be paid for that week. This reduction in salary is legal as long as it does not fall below the minimum salary required for exemption, or it may result in the loss of the exemption.
Furloughed employees will typically be eligible for Unemployment Insurance benefits through the California Employment Development Department (EDD).
A layoff is a temporary separation from payroll. Employees are laid off because there is not enough work for them, but the employer believes that this circumstance will change and intends to recall the person when work becomes available again. Employees are typically able to collect unemployment benefits while on an unpaid layoff. Frequently, employers will allow employees to maintain their benefits for a defined period of time as an incentive to remain available for recall.
In California, the Worker Adjustment and Retraining (WARN) Act is triggered for employers who employ 75 or more employees. In this instance, the employer must provide notice to employees that include:
- A detailed explanation of whether the layoff is permanent or temporary
- The date of layoff
- Details of employee bumping rights (reassigning of employment based on seniority)
- The name and contact info of a representative who can provide additional information about the layoffs
If the layoff was brought on due to COVID-19, then the notice must also include:
- The basis for reducing the required notification period of 60 days, including reference to being due to “circumstances that were not reasonably foreseeable as of the time the notice would have been required.”
- The following statement, “If you have lost your job or been laid off temporarily, you may be eligible for Unemployment Insurance (UI). More information on UI and other resources available for workers is available at http://www.labor.ca.gov/coronavirus2019.
If the CalWARN Act is not followed, employees may receive back pay and benefits for up to 60 days.
Reduction in Force
A reduction in force (RIF) occurs when a position is eliminated without the intention of replacing it and involves a permanent cut in headcount. A layoff may turn into a RIF or the employer may choose to immediately reduce their workforce. A RIF is accomplished by terminating employees or by means of attrition (not filling vacancies left by former employees).
When an employee is terminated in accordance with a reduction in force, it is sometimes referred to as being “riffed.” Some employers use layoff as a synonym for what is actually a permanent separation. This may be confusing to the employee because it implies that a recall is a possibility, which may prevent the employee from seeking a new job. Communication on return rights is important in these situations.
The CalWARN Act may apply for employers who employ 75 or more employees.
In all instances, whether it is a furlough, layoff or RIF, employers must provide employees with a Notice to Employee as to Change in Relationship, as mandated by the EDD.
Unemployment Insurance and Other State Benefits
The EDD website (https://edd.ca.gov) has additional information on total or partial unemployment benefits. All employees must be provided a copy of the UI pamphlet “For Your Benefit. And depending on the circumstance, State Disability Insurance or Paid Family Leave benefits may also be available.