Reimbursement realities of advanced nursing practice

Reimbursement Realities of Advanced Nursing Practice L i n d a L. Lindeke, PhD, RN, C P N P M a r y L. Chesney, MS, RN, C P N P Rising costs of health care require advanced practice nurses to be cost-effective and knowledgeable regarding reimbursement of their services within rapidly expanding managed care organizations. However, the rapid pace of change in reimbursement legislation, policies, and procedures makes this a daunting task. he complex, rapidly changing health care system impacts nursing through the reimbursement process. Health care cost issues are frequent topics of political and general public debate. Advanced practice nurses (APNs) are increasingly concerned about the fiscal implications of recent federal and state legislation, managed care and insurance practices, and third-party payer credentialing processes. Few systematic studies of nursing reimbursement practices exist in the literature. This study describes reimbursement concerns in a Midwestern state of 2 categories of APNS, namely nurse practitioners (NPs) and clinical nurse specialists practicing in the area of psychiatry/mental health. T BACKGROUND The current American health care system hardly resembles that which was in place a decade ago. Managed care organizations (MCOs) dominate health care in most states, and large provider networks have emerged as a result of consolidations and mergers. As patient care has moved out of the inpatient arena into outpatient delivery services, M C O s have increasingly stressed the importance of health maintenance, preventive services, management of chronic illness, and patient education. The rationale for this focus is that improved client health ultimately translates into improved health of the MCO's financial ledger. Nursing has traditionally been at the forefront of patient education, health maintenance, and primary prevention, thus making them particularly effective care providers in MCOs. l They focus on the person and family rather than on the disease Hnda L. Lindeke is an assistant professor, School of Nursing, and associate clinical specialist, Pediatrics, University of Minnesota, Minneapolis. Mary L. Chesney is a clinical director of Pediatric Specialties Clinic, Department of Pediatrics, University of Minnesota, Minneapolis. Supported by the Minnesota Nurses Foundation. Nurs Outlook 1999;47:248-51. Copyright © 1999 by Mosby, Inc. 0029-6554/99/$8.00 + 0 35/1/97506 248 Lindekeand Chesney state, which makes them well accepted by their patients, Despite increasing public acceptance o f APNs, nurses continue to express frustration at being shut out of health systems and hindered by reimbursement barriers persistent in today's competitive managed care market. Failure of many managed care organizations to recognize APNs as reimbursable care providers is concerning. Lack of provider status may result in denial of payment for services rendered by APNs even if the services are delivered within the defined legal scope of APN practice. 2 As documented annually by Pearson, 3 laws in each state vary in their definitions of and processes for APN reimbursement practices. Laws in several states require Medicaid agencies to recognize APNs as primary care providers, but these laws do not apply to all third-party payers. Some states leave the decision about APN recognition up to individual MCOs, and other states have no nursing reimbursement laws) Many APNs who deliver services within physician or group practices are frustrated that their patient encounters are billed under physician provider numbers to ensure that the practice receives 100% of a typical physician fee reimbursement rate for services. Medicare and Medicaid reimbursement rates for services provided by APNs vary from state to state and differ among nongovernmental third-party payers, ranging from 70% to 100% of a typical physician's fee. However, reimbursement rates for APNs working under the direct supervision of a physician may be as much as 100% of the physician rate if billed under the category of "incident to." Physicians and office managers may be unfamiliar with state laws pertaining to APN reimbursement, causing APN employers to bill inadequately and not receive proper payments from third-party payers) The legality, or even the ethics, of billing for APN services under physician provider numbers must be questioned, particularly in states that have had APN reimbursement laws on the books for some time. Nurses must be proactive to ensure their employers use billing practices that entail direct reimbursement for APN services. Direct billing enables tracking of revenue generated by APNs. APN fiscal data, patient outcomes, and performance indicators are necessary to negotiate contracts and assess cost-effectiveness.~ Failure to link APN provider numbers to their patient encounters makes accurate compilation of data and evaluation of APN cost-effectiveness impossible. The managed care industry has grown and changed at a rapid pace and has recently had to respond to negative public perceptions about care quality and access..As a result of public VOLUME47 • NUMBER6 NURSING OUTLOOK ReimbursementRealities ofAdvanced Nursing Practice Lindeke and Chesney and legislative pressure, more than 100 laws that restrict managed care administrative or clinical practices have been enacted by state legislatures since 1996. 4 At the federal level, Congress also is grappling with legislation that calls for improved access, quality assurance, and patients' provider choice. Thus the context of this study is fi'aught with competing political issucs and organizational values. STUDY DESIGN As part of a larger study of barriers to practice perceived by APNs, surveys were sent to APNs located in one Midwestern state with a very high penetration of managed care (N = 631). Mailing labels were obtained from the state Board of Nursing, and questionnaires were sent to all NPs and psychiatric/mental health clinical nurse specialists (CNSs) with prescribing privileges in January 1996. (Note: State legislation limits prescriptive authority to CNSs in psychiatry/mental health practices only.) This study examined barriers described by the nurses within their current practice settings. O f 63l questionnaires mailed, 368 APNs responded (response rate = 61%). Respondents, 41 psychiatric-mental health CNSs and 327 NPs, were encouraged to describe how practice barriers affected their practice. They provided very thorough and specific comments about their current practice constraints. The narrative comments, when transcribed verbatim, resulted in 32 single-spaced pages of text. Distribution of respondents when matched by county of residence indicated that the sample was geographically representative of the total population of prescribing APNs in the state. Content analysis was independently performed by 2 nurse researchers, followed by categoric and thematic coding. Three themes emerged regarding APN reimbursement concerns, which are described and illustrated by selected respondent quotes. Nurses must be proactive to ensure their employers use billing practices that entail direct reimbursement for A P N services. RESULTS Content analysis produced 3 themes critical to reimbursement: (1) lack of APN recognition by M C O s and thirdparty payers, (2) lack of APN knowledge and education relating to reimbursement, and (3) difficulty in handling the rapid pace of change of reimbursement policies and procedures (Box 1). Theme 1: Lack of APN Recognition by MCOs and Third-Party Payers Patient access to the high-quality care provided by APNs is limited when health care systems fail to specifically designate them as providers of cate. APNs ate often not identified in advertising and promotional materials published by MCOs. They may not receive information regarding reimbursement regulations even when they are credentialed by the payers and have their own NURSING OUTLOOK NOVEMBER/DECEMBER1999 provider numbers. This lack of recognition occurs despite APN practice being affected on a daily basis by reimbursement practices, changes, and constraints. A respondent stated: NPs are not identified as key players needing information and updates to changesin reimbursement. Information tends to go to the office managers and to physiciansin the practice. The common practice of "incident to" billing or billing APN effort under physician names to maximize reimbursement makes the financial contribution of NPs and CNSs invisible to the nurses, their employers, and outside agencies. The ability of APNs to track their patient encounters, outcomes, and costeffectiveness is thus hindered. Billing APN visits under physician names appears to be common, despite this study being conducted in a state which has had third-party reimbursement for NPs and CNSs in mental health since 1990. Currently the business officeis billing our services under the MD name to avoid the insurance company. Our clinic continues to tag our billing ID number with a doctor's number to be certain to receivereimbursement. Employers may not be following the intent of APN thirdparty reimbursement regulations because doing so impacts the revenue collection. Third-party payers in this state appear to accept the practice of billing APN services under physician names. In regions with high managed care penetration, providers negotiate discounted rates to obtain health services contracts and may find that an additional discount (typically 85% of physician rates) negatively impacts fees collected. Because this state does not require physician supervision of APN practice, this billing practice misrepresents the care system because, in reality, the physicians have little or no contact with APN patients in the encounters being billed under the physicians' names. Credentialing of APNs appears to be a slow process. MCOs may be unfamiliar with APN scope of practice and national certification) As a result, some APNs practice without their own provider numbers and are employed in practices that do not attempt to obtain these numbers, perhaps to avoid the discounted reimbursement rate. APNs described their situations as follows: i do not have provider numbers for private insurance. I think my charges are billed under a physician'sname. Theme 2: Lack of APN Knowledge and Education Relating to Reimbursement APNs recognize their limited knowledge of reimbursement rules, regulations, and policies. Respondents stated: 249 ReimbursementRealitiesofAdvancedNursingPractice My lack of knowledge regarding insurance affects me daily in coding, billing, and prescribing. System is complicated, regularly changing. If I knew more, 1 could play the game. There are so many varied insurance plans, and they dictate practice in prescriptions that are covered under their plan. Difficulty of knowing what's covered and how to work the system is time-consuming. I need to become more knowledgeable of the insurance system so I will know how it is setting up barriers for me. The system is complicated, regularly changing, and I'm not on the [managed care company's[ mailing list to receive explanation of changes. I need to know more about the various HMOs (health maintenance organizations) and their reimbursement practices. My office manager deals with this, but I need to be better informed. I am not certain of the status of third-party reimbursement I am receiving. Providers m a y react to the rapid pace of change by avoiding reimbursement issues and claiming disinterest. Two respondents articulated this disinterested view: In addition, they described e m p l o y m e n t work systems in which physicians and office administrators also did not understand scope o f practice issues, A P N billing, and third-party legislation. T h e y stated: What I have learned has been by chance. More information would be helpful to best utilize the system for my patients. [There are] few resources here to obtain information. If I knew more about how the insurance companies reimburse, I could actually charge more effectively. Clearly nurse practitioners require both basic information about reimbursement during their graduate nurse practitioner education as well as ongoing continuing education updates. T h e i r frustration was evident: ...limits my ability to lobby and help administrators with reimbursement issues. Very little background/course work to assist in making practice decisions affects ability to market and advocate for self. [Reimbursement was] not covered at all in school. I have learned vast amounts since being out on my own regarding types of plans/systems. Shorter educational programs and lower salaries relative to physicians make APNs cost-effective providers in MCOs. Theme 3: Pace of Change T h e rapid pace o f health care change requires that nurses be continually u p d a t e d a b o u t r e i m b u r s e m e n t issues. Respondents stated: It is difficult to keep abreast of the changes and why decisions are made about NP reimbursement. I work with students at a state university health service. There is confusion in the numerous plans, and at times the clients are not knowledgeable of their own plans. [I have] difficulties with keeping on top of current Changes. Insurance can dictate practice. I am learning, but things continue to change almost daily, and it is difficult to stay updated. Inclusions/exclusions are constantly changing. Insurance providers make changing patients/providers a revolving door. 250 Lindeke and Chesney It's an overcomplicated system with rapid change in expectations. I have no interest in learning about insurance issues. This disinterest would be a problem if I ever chose to leave my current practice setting (where I don't need to deal with it). I could probably learn to use the system so that the clinic where I work would be able to reimburse at a higher level. DISCUSSION Turf battles about A P N reimbursement rates are not new but take on a new configuration in this era o f managed care. Shorter educational programs and lower salaries relative to physicians m a k e A P N s cost-effective providers in M C O s . Patients have increased access to care because m a n y APNs work with underserved populations and outreach programs. APNs frequently advocate for improved care for the vulnerable populations they serve: the elderly, covered by Medicare; chronically ill, lowdncome families; and women and children, often covered by Medicaid and Medicaid waiver programs. 5 Finefrock and Havens 5 state that current reimbursement battles are the same as the battles o f the 1960s. Groups such as the American Medical Association lobby state legislatures, Congress, and the Health Care Finance Agency to restrict the definition o f p r i m a r y care provider to physicians and to limit r e i m b u r s e m e n t laws and regulations to an equally narrow providership. However, their success is mixed. In response to increasing acceptability o f APNs in the workforce, n u m e r o u s state legislatures have legitimized A P N practice a u t o n o m y in laws and regulations. Twenty-six states have statutes granting A P N s the right to practice without physician supervision or collaboration. 3 Eighteen states now m a n d a t e their direct r e i m b u r s e m e n t by private insurers, health m a i n t e n a n c e organizations, M C O s , and Medicaid. 3 T h e 1997 Budget Reconciliation Act guarantees Medicare r e i m b u r s e m e n t for A P N s regardless of setting and is expected to be a model for reimbursement practices that will be adopted by other health plans. Although this act authorizes direct A P N reimbursement, it also requires collaboration with physicians. This requirement is a problem in states where collaboration is not currently required because some A P N s in those states have established independent practices; they would not be able to bill Medicare without changing their practices and o b t a i n i n g physician collaboration. D e b a t e continues in Congress and the Health Care Finance Agency on these issues. In addition, state nurse practice acts and r e i m b u r s e m e n t laws modify ways in which this legislation is enacted t h r o u g h o u t the United States. VOLUME 47 • NUMBER 6 NURSINGOUTLOOK ReimbursementRealitiesofAdvancedNursingPractice Sharp 6 calls for action by APNs to inform the public and MCOs of their cost-effectiveness. She states that the American Medical Association is lobbying for legislative action to reimburse physicians who collaborate with APNs with the 15% remaining balance of the Medicare physician's fee when APNs receive direct reimbursement at the 85% rate. This reimbursement would result in physician payment for the care Medicare patients receive from APNs. She recommends that nurses resist this proposal. The need for NPs to be involved in lobbying manage d care entities, public systems, and legislative bodies regarding reimbursement issues is apparent in this stud> Cohen and Juszczak 1 urge APNs to keep abreast of insurance regulation changes in their state and to actively lobby for regulations that protect APN direct reimbursement. As a result of managed care's emphasis on cost-containment, APNs should no longer assume that because they are salaried, they are immune from reimbursement difficulties. Schools of nursing must realize that A P N students need content related to the business side of their future professional nursing practice. The health care industry appears to be beginning to work with APNs to clarify the muddle of reimbursement policy and conventions. APNs, as well as physicians, must understand reimbursement systems and processes. However, the health care industry is changing at a phenomenal rate. The current pace of change and the failure to standardize regulations makes it very difficult to obtain either the baseline knowledge or current changes in reimbursement policy. Providers have little time to search for the needed information. Lack of reimbursement information adds confusion to a system that is both generating tremendous business costs and also aiming to be cost-conscious. Respondents in this study clearly articulated their frustration with the lack of needed reimbursement information regarding rapidly changing systems and regulations. Standardizing the process for APN credentialing for reimbursement would facilitate gaining reimbursement "savv)a" APNs must educate M C O administrators about their effective, high-quality, health promotion-based care. Nurses must be kept informed of changes and communications fi'om the industry to be effective members of managed care ddivery teams. The need for APN knowledge and education on this topic is a clear theme of this study. Education about reimbursement policies is not solely the task of payers and MCOs. Schools of nursing must realize that APN students need content related to the business side of their future professional nursing practice. Already schools of medicine are beginning to educate medical students about managed care in response to market forces and NURSING OUTLOOK NOVEMBER/DECEMBER1999 Lindeke and Chesney 1. Obtain provider status for APN reimbursement 2. PublicizeAPNs in consumer publications and MCO directories 3. Obtain plan-specificinformation about APN contracts, coding, and billing 4. Obtain regular updates regarding changes in systems, contracts, and regulations 5. Include reimbursement as a topic in basic and continuing APN education pressures. For example, in a new elective offered at the University of South Florida, medical students rotate through the business offices of 4 different managed care organizations for 4 weeks. 7 That program allows future physicians to learn firsthand about marketing, quality assurance, peer review, credentialing, and contracting. Medical students meet with key players in different M C O departments. Nursing graduate programs need to develop basic curricular content related to reimbursement. In addition, continuing education is needed to educate APNs about managed health care market forces, state and federal regulations, employment contracts, and reimbursement agreements. Schools of nursing need to carry out research to survey APN programs regarding course content on reimbursement. Research studies could examine APN documentation and billing practices to develop strategies to maximize reimbursement. APNs no longer can rely on administrators, office managers, and physician employers to protect and promote their interests. If barriers to reimbursement currently experienced by APNs are to be addressed, it will take a concerted effort of nurse educators, professional nursing organizations, and savvy practicing nurses to lobby elected bodies and the managed care industry for full and unobstructed participation within MCOs (Box 2). We gratefullyacknowledgethe contribution to this work of the coinvestigator of the original study, Mary E. Tanner, MS, MSE, RN, doctoral candidate, School of Nursing, University of Minnesota. • REFERENCES 1. Cohen S, Juszczak L. Promoting the nurse practitioner role in managed care. J Ped Health Care 1997;11:3-11. 2. Buppert C. Reimbursement for nurse practitioner services. Nurs Pract 1998;23(1):67-81. 3. PearsonL. Annual update of how each state strandson legislativeissues affecting advanced nursing practice. Nurse Pract 1998;22(8):14-66. 4. Kertesz L. 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