Failure to Follow Payer’s Clinical Staff Rules Costs Provider $273KApril 12th, 2021 - Wyn Staheli, Director of Research
Clinical staff (e.g., LPN, RN, MA) provide essential services which allow providers to leverage their time and improve reimbursement opportunities and run their practices more efficiently. There is, however, an ongoing question of how to appropriately bill for clinical staff time. This is really a complex question which comes down to code descriptions, federal or state licensure, AND payer policies. Failure to understand licensing and payer policies led a Connecticut provider organization down a path that ended in a $273,000 settlement with both federal and state governments.
Limitations of Official Procedure/Service Code Descriptions
CPT and HCPCS codes have official descriptions which often include specific wording about who may or may not perform the service. For example, when it says physician or qualified healthcare provider (QHP), only individuals who meet both state licensing regulations and payer policies for those titles may bill those services. One interesting thing to note is that even though Medicare defines a chiropractor as a physician, it limits the services they can perform, and the same goes for podiatrists and several other types of licensed providers. Thus, it is essential to understand more than just the description of the procedure/service.
Also, based on state regulations and individual payer policies, sometimes payers will allow for services to be billed by a rendering non-physician provider who is supervised by a physician/QHP with the use of modifiers such as the following, but this is entirely dependent on individual payer policy:
AJ Clinical social worker
HM Less than bachelor degree level
HN Bachelors degree level
HO Masters degree level
HP Doctoral level
For example, there are some state Medicaid contracts that have contracted registered nurses (RN) and licensed practical nurses (LPN) perform and bill certain services performed under direct supervision of a physician/QHP, but those are special payer contracts and are not applicable to all providers.
ALERT: To help avoid accusations of fraud, do NOT file a claim indicating that the individual performing a service has the licensure, qualifications, or education level required for that service when they do NOT have it. This includes services performed by a nonqualifed provider (as determined by federal/state law, licensing, or payer policy) and billed as if it was performed by a physician/QHP.
Licensure and Supervision
Within the context of this article, we are referring to services which an individual is permitted to perform in accordance with the applicable state and federal laws. Be aware that supervision rules may apply and supervision requirements may also vary depending on the payer as well as the procedure being performed. For Medicare, it is also essential to understand their “incident to” rules when billing services performed by clinical staff. The following articles provide further information on this subject:
- Clinical Staff vs Healthcare Professional
- Helping Others Understand How to Apply Incident to Guidelines
Individual payers must follow federal and state regulations or obtain specific waivers that permit them to act differently. As each state varies in their laws and regulations, national insurers (e.g., United Healthcare, BCBS) have plans and policies that are different from state to state. Commercial payers offering Medicare Advantage plans must adhere to federal regulations unless provided with a waiver to act otherwise and the same goes for federal/state-funded Medicaid programs. Commercial plan products must follow the regulations of the state in which they are doing business.
TIP: When state regulations are more strict than the federal regulations, providers are required to adhere to the state regulations.
As far as payer-provider contracts are concerned, as long as the payer and provider are adhering to federal and state regulations, they may develop contracts that facilitate patient services and determine the rates at which to compensate providers for those services. Payers recognize and accept CPT and HCPCS codes and descriptions in accordance with HIPAA rules; however, payers often develop their own policies regarding the use and reporting of many of these codes. It is the provider’s responsibility to verify, with each payer they are contracted with, which licensed professionals are able to perform and bill for services. Unless specified within a payer contract, generally nurses (e.g., LPN, RN) and clinical staff (e.g., CNA, MA) are only eligible to perform certain services under direct supervision by a physician/QHP. When clinical or ancillary staff perform services they are not eligible to perform, they put their organizations at serious risk.
Healthcare organizations MUST be vigilant in knowing and following the individual payer policies with whom they are contracted. If there are ANY questions about which services clinical staff may provide, be sure to speak with the payer’s provider relations department and get something in writing to include in your Policies and Procedures Manual.
In the legal case cited above, their Provider Manual stated that “[t]he department shall not pay for…services provided by anyone other than the provider.” This included unlicensed individuals who were working towards obtaining their license. Therefore, the organization was legally obligated to abide by the rules within the Provider Manual.
Begin by looking within your contract and Provider Manuals, but keep in mind that other critical information can often also be found within OTHER published policies.
- Find-A-Code includes many payer policies available at the code level (included in Elite, add-on to other subscriptions).
- More comprehensive information about supervision, “Incident To,” and other important reimbursement considerations can be found in one of our specialty-specific Reimbursement Guides.
If you have questions or comments about this article please contact us. Comments that provide additional related information may be added here by our Editors.
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