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Reimbursement Fact Sheet

Medicare Coverage

Effective January 1, 1998, PAs will be covered by Medicare for all eligible services in all settings recognized by the program. Those most affected by this change will be PAs in urban, suburban, and rural (non-HPSA) office practices, where billing for outpatient services has been done under Medicare's incident-to provisions.

Although billing under incident-to allowed a practice to receive payment equal to 100 percent of the physician's rate, it also meant that a supervising physician had to be on site when PAs saw Medicare patients. Other limitations of incident-to billing included a requirement that physicians, rather than PAs see all new Medicare patients, as well as established patients with new conditions.

Starting in January 1998, practices will be able to provide outpatient services under the supervision criteria contained in state law (indirect supervision) rather than criteria set by Medicare. They will be free to schedule Medicare patients based on medical need rather than government payment policies. In exchange for this flexibility, which should increase access to care and practice efficiency, employers will receive 85 percent of the fee schedule amount.

In addition, Congress did away with the varying rates (65 percent for assisting at surgery, 75 percent for services provided in nursing homes and rural HPSAs) and set reimbursement for physician services provided by PAs in all settings at one uniform rate; that is, 85 percent of the fee schedule amount for the same service if provided by a physician. This means that coverage in hospitals and emergency departments will increase by 10 percent and payment for PA first assistants in surgery will rise 20 percent.

Payment will continue to be made to the employer, but the law contains new language clarifying employment. PAs can be in an independent contractor relationship, and employer status will be determined by state law.

Medicaid Coverage of PA Services

A physician assistant may not enroll as a participating provider in the Medical Assistance Programs. However, the Department of Public Welfare will reimburse an employing physician, hospital, or clinic for services performed by a physician assistant. Reimbursement rate depends on the type of employing provider, i.e., physician, hospital clinic, independent medical clinic, or rural health clinic.

Physicians may bill for both inpatient and outpatient services provided by a PA. The Pennsylvania Bulletin, Vol. 26, No. 48, November 30, 1996 stated that Department of Public Welfare announced effective September 1, 1996, the Department revised its policy to permit physician assistants to provide medical services to Medical Assistance recipients as long as the physician is accessible by telephone or some other means of communication as allowed under current Pennsylvania practice standards and licensure.

The Department has two separate rates of payment for services provided in outpatient hospital clinics. To receive the higher reimbursement rate the regulations require that the clinic have a licensed physician present in the clinic at all times of scheduled operation. For the lower reimbursement rate, the only requirement is that the services must be provided under the direction of a physician. There is no such disparity in the independent medical clinic setting where services may be provided by a PA within the scope of the Medical Practice Act.

In the rural health care clinic setting, the clinic may receive reimbursement as the provider of services when the PA functions under federal regulations requiring that the physician must be available through direct telecommunication for consultation, assistance with medical emergencies, or patient referral.

Pennsylvania Blue Shield

Pennsylvania Blue Shield recognizes services performed by a licensed physician assistant when employed by and acting under the personal supervision of an eligible provider physician. Personal supervision means that the physician must be in the immediate vicinity so that he can personally assist in the procedure or take over the patient's care if necessary. Effective July 18, 1994, Pennsylvania Blue Shield will recognize indirect supervision (e.g., with the supervising doctor available by phone or radio contact) of PAs in medically understaffed areas, as determined by the Pennsylvania Department of Health. Payment cannot be made directly to the PA. Payment is made either to the participating physician or to the patient for services provided through a non-participating physician. The amount paid will be the same as that which would be paid if the services were personally performed by the reporting physician. Blue Shield at this time will not provide reimbursement for PAs who assist-at-surgery. The PA's services as a surgical assistant are considered by Blue Shield to be an integral part of the surgeon's surgical fee.

Private Insurance

Private insurers generally cover PA services when they are included as part of the physician's bill or as part of a global fee for surgery.

Tricare

The Civilian Health and Medical Program of the Uniformed Services covers all medically necessary services provided by the PA. The PA must be supervised in accordance with state law and regulations. The supervising physician must be an authorized Tricare provider. The employer bills for the services provided by the PA.

The allowable charge for all PA services, except assisting-at-surgery, is 85% of the allowable charge for comparable services rendered by a physician in a similar location. The allowable charge for assisting-at-surgery is 65% of the physician's allowable charge for comparable services.