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Department: Legal File

Maximizing reimbursement

What nurse practitioners need to know

Craig, Donna J. BSN, JD

Author Information
doi: 10.1097/01.NPR.0000451906.38641.06
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With more people gaining access to healthcare coverage as a result of the Affordable Care Act, the demand for primary care providers in the United States is expected to increase, dramatically outpacing supply. According to the American Academy of Family Physicians, the shortfall is expected to exceed 29,000 physicians by 2016 and more than 45,000 by 2020.1 Despite the anticipated gap, there is one group of healthcare providers that may stand to benefit from additional opportunities: nurse practitioners (NPs).

Proper reimbursement

As NPs treat greater numbers of patients, they must take steps to ensure that they are properly reimbursed for their services. This can be achieved by reducing the overall number of denied claims to maximize reimbursement. A critical first step is to clearly understand what Medicare, Medicaid, and private commercial insurance plans and payers require. In addition, NPs who have a working knowledge and understanding of the Current Procedural Terminology (CPT), International Classification of Diseases, 9th ed (ICD-9), Evaluation and Management (E/M), and the new ICD-10 codes will also enhance their documentation, treatment, and plans of care, resulting in quality patient care.

Understanding current obligations

NPs should adopt the following practices to ensure their claims are reimbursed appropriately and promptly in order to stay up-to-date on each health plan's claims reimbursement requirements:

  • NPs should know their contractual rights and responsibilities contained in provider contracts with health plans and third party payors.
  • Keeping current on each health plan's policies and procedures as well as any bulletins and transmittals. Provisions may be modified without notice, so it is best to periodically review each plan's website to stay on top of any changes or newly issued information.
  • E-mail alerts or mailings are unreliable, and certain days should be designated each month to check websites and other online resources to stay abreast of important policy changes.
  • Keeping a spreadsheet summarizing each payer's requirements for documentation and claims billing, modifying, and updating the information as warranted.


Every healthcare provider knows the importance of documentation relative to effective patient care and treatment. Making other providers aware of the patient's status, preventing mistakes, and ensuring accountability are just a few of the benefits. At the same time, NPs must document the care provided and the rationale for each treatment plan, and patient outcomes are also essential in receiving appropriate reimbursement for services provided by NPs. Health plans and payers must be able to see the care provided and written support for the medical necessity of such care.

At a minimum, proper documentation should include the following:

  • An assessment, history, and physical exam based on the patient's symptoms and complaints.
  • A plan of care for the patient. If diagnostic tests are ordered, the NP's documentation should reflect the rationale for the tests; more importantly, if the NP's findings indicate a patient concern and the NP chooses to observe the patient further, the documentation must reflect the reasoning for not immediately ordering diagnostic tests. This will go a long way in establishing an NP's thought process in the event that the patient's care becomes the subject of a malpractice action. Regardless, it is good practice to have documentation reflect the thinking and justification at all times during the NP's interaction with the patient.

The documentation must support CPT codes in the medical record. CPT codes are revised on January 1 of each year, so it is imperative that NPs track changes annually and determine appropriate descriptors for E/M services so that the proper level of service is billed. The use of obsolete CPT codes or invalid descriptors will result in denied claims for reimbursement.

Levels of E/M services

It is important to know that the level of E/M services is based on the extent and complexity of the history obtained from the patient (problem focused, expanded problem focus, detailed, or comprehensive), physical exam, as well as medical decision making, which includes documentation of the patient's diagnosis, treatment options, test data (X-ray findings, ECG results), risk of complications, morbidity, or mortality. Billing for these services is based on the extent of the history, physical exam, and medical decision making involved in the patient encounter. In the event counseling services are provided to the patient, the NP must remember that billing is based on the amount of time spent counseling the patient and coordinating the care; patient counseling in an office setting is billed on face-to-face time, while billing for counseling in the hospital is based on the amount of time addressing the patient's issues both in a face-to-face interaction and when coordinating follow-up actions on the hospital unit.

The Centers for Medicare & Medicaid Services (CMS) sets forth an overview of documentation requirements for the various levels of E/M services2:

  • A problem-focused exam concentrates on the affected area of the body.
  • The expanded problem-focused exam is similar to the problem-focused approach but also addresses other symptoms in related areas.
  • A detailed exam involves a more extensive investigation of the affected area and any other related symptoms.
  • Finally, the comprehensive exam entails a multisystem exam or a complete exam of a single organ system.

ICD codes

ICD codes substantiate the medical necessity for the procedures or services provided. ICD code sets are used to report medical diagnoses and inpatient procedures, and it is imperative that NPs use the current codes to avoid denial of claims. ICD codes are published annually, effective every October; the current ICD-9 code sets (now 30 years old) will be replaced with ICD-10 code sets, which will remedy outdated terms, bring codes in line with current medical practice, and update and expand the number of codes overall.

In anticipation of this transition, NPs need to acquaint themselves with the particulars of ICD-10 codes. For example:

  • ICD-10-Procedure Coding System (PCS) codes are much more specific and substantially different from ICD-9-Clinical Modification (CM) procedure coding.
  • Diagnosis coding under ICD-10-CM will use three to seven digits instead of the three- to five-digit format of ICD-9-CM codes.
  • ICD-10-PCS codes will be used in inpatient hospital settings only and will use seven alphanumeric digits instead of the three or four numeric digits associated with ICD-9-CM procedure coding.

The ICD-10 codes are available on CMS' website, and CMS provides NPs with ICD-10 educational materials to assist with the transition.3,4 Even if healthcare providers do not provide care to Medicare patients, they will still need to comply with the new ICD-10 codes. All covered entities, as defined by the Health Insurance Portability and Accountability Act (HIPAA), must make the transition to ICD-10 codes. Being subject to HIPAA is the controlling factor, not the patient's payer (Medicare, Medicaid, and so on).

Delays the implementation of ICD-10

When President Obama signed the Protecting Access to Medicare Act of 2014 on April 1, 2014, the ICD-10 implementation date was moved back 1 year to October 1, 2015. CMS has posted on its website that it is “examining” the implications of the ICD-10 provisions, and guidance to healthcare providers and stakeholders will be forthcoming in future regulations. Although implementation has been delayed 1 year, NPs should use this additional time to properly prepare for the transition.

Preparing for the transition to ICD-10

Depending on the size of the office practice, a team may need to be established in order to provide for a smooth transition. A project coordinator may be more appropriate for small practices with five or fewer healthcare providers. Other steps to consider include the following:

  • Set a timeline that identifies the tasks to be completed along with crucial milestones, relationships, and necessary resources as well as estimated start and stop dates.
  • Determine where ICD-9 codes are currently used. Make sure the office practice accounts for the use of ICD-9 in authorizations and precertifications, orders, medical records, superbills and encounter forms, practice management and billing systems, and coding manuals.
  • Review current or future electronic health record templates to determine how ICD-10 will affect clinical documentation.
  • Communicate with office staff regarding the plan, timeline, system changes, and processes for the practice, which will be impacted by the transition to ICD-10 codes.
  • The switch to ICD-10 codes may require software upgrades and new or additional license costs, new hardware, and training, all of which may increase expenses.
  • Check with payers, billing personnel, and IT staff to determine readiness for the ICD-10 deadline.
  • Determine whether contracts with payers and vendors need to be revised.
  • Confirm with the vendor that the office practice management system is upgraded to version 5010 standards.

Proper documentation

Proper and complete documentation is important in many respects, the least of which is billing. If a healthcare provider has inadequate or missing documentation, the payer may refuse payment, and the patient will not be responsible for covering the charges, resulting in decreased revenue. Insufficient documentation can also subject the healthcare provider to liability for false-claim actions and possible professional liability claims that cannot be adequately defended. On the other hand, upcoding without supporting documentation in the medical record can result in an audit by Medicare along with fines and possible criminal prosecution for fraud. Healthcare providers who upcode may also lose their Medicare provider status, which may jeopardize their professional licenses.

It is wise to invest time and effort to know and use required documentation standards, keep up-to-date with changes in payers' requirements, and to be prepared for the ICD-10 transition to avoid these potentially costly scenarios.


1. American Academy of Family Physicians. Primary Care Physician Shortage Requires Bold Action.
2. Centers for Medicare & Medicaid Services. Documentation Guidelines for Evaluation and Management Services.
3. Centers for Medicare & Medicaid Services. ICD-10 Implementation guide for payers.
4. Centers for Medicare & Medicaid Services. ICD-10.
© 2014 Lippincott Williams & Wilkins