Failure to Follow Payer’s Clinical Staff Rules Costs Provider $273K

April 12th, 2021 - Wyn Staheli, Director of Research
Categories:   Billing   Denials & Denial Management   Audits/Auditing  
0 Votes - Sign in to vote or comment.

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

HL Intern

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:

Payer Policies

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. 

Tips: 

  • 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.

###

Questions, comments?

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.


Latest articles:  (any category)

Medicare Updates -- SNF, Neurostimulators, Ambulance Fee Schedule and more (2022-10-20)
October 27th, 2022 - CMS - MLNConnects
Skilled Nursing Facility Provider Preview Reports: Review by November 14 - Help Your Patients Make Informed Health Care Decisions - Ambulance Fee Schedule: CY 2023 Ambulance Inflation Factor & Productivity Adjustment - Compliance - Implanted Spinal Neurostimulators: Document Medical Records - Claims, Pricers, & Codes...
2023 Evaluation & Management Updates Free Webinar
October 24th, 2022 - Aimee Wilcox
Congratulations on a successful 2021 implementation of the Evaluation and Management (E/M) changes! That was a big change, but now an even bigger change is headed your way for inpatient and all other E/M categories. How great is it that almost all of the E/M categories will now be scored based on medical decision making (MDM) or total provider time? Standardized scoring and one set of E/M guidelines has the potential of bringing about a change or improvement of provider fatigue due to over regulation and documentation burden.
Are Leading Queries Prohibited by Law or Lore?
October 13th, 2022 - Erica E. Remer
AHIMA released its CDI Practice Brief Monday. At Yom Kippur services, I found myself thinking about the question Dr. Ronald Hirsch posed to me the day before. My rabbi was talking in her sermon about the difference between halacha and minhag. Halacha is law; it is the prescriptions...
2023 ICD-10-CM Guideline Changes
October 13th, 2022 - Chris Woolstenhulme
View the ICD-10-CM Guideline Changes for 2023 Chapter 19 (Injury, poisoning, and certain other consequences of external causes [S00-T88])The guidelines clarify that coders do not need to see a change in the patient’s condition to assign an underdosing code. According to the updated guidelines, “Documentation that the patient is taking less ...
Z Codes: Understanding Palliative Care and Related Z Codes
October 11th, 2022 - Gloryanne Bryant
Palliative care is often considered to be hospice and comfort care. Palliative care is sometimes used interchangeably with “comfort care” and then again sometimes with “hospice care.”  But these terms do have slightly different meanings and sometimes the meaning varies depending on who is stating it. The National...
2023 ICD-10-CM Code Changes
October 6th, 2022 - Christine Woolstenhulme, CPC, CMRS, QCC, QMCS
In 2022 there were 159 new codes; the 2023 ICD-10-CM code update includes 1,176 new, 28 revised, and 287 deleted codes, a substantial change from last year. The 2023 ICD-10-CM codes are to be used for discharges from October 1, 2022 through September 30, 2023, and for patient encounters from ...
Yes, You Have What It Takes To Lead Your Practice And Your Profession
September 20th, 2022 - Kem Tolliver
If you’ve been in any healthcare role for more than two years, you’ve seen quite a bit of change. And guess what, it’s not over. We are living and working in uncertain times. This climate requires each of us to step outside of our comfort zones to lead exactly where we stand. It’s not required of one to have a “title” to lead. What is required, however, is a willingness to trust your instincts, look for answers and rely on your team.



Home About Contact Terms Privacy

innoviHealth® - 62 E 300 North, Spanish Fork, UT 84660 - Phone 801-770-4203 (9-5 Mountain)

Copyright © 2000-2022 innoviHealth Systems®, Inc. - CPT® copyright American Medical Association