Split/Shared Services: What You Need to Know in 2025

In the 2022 Medicare Physician Fee Schedule (MPFS) Final Rule, the Centers for Medicare and Medicaid (CMS) finalized a policy for split/shared evaluation and management (E/M) services (i.e., services billed with modifier FS). These are services provided in a facility setting (including hospital, skilled nursing facility, emergency department, etc.) in which a physician and non-physician practitioner (NPP) in the same group practice provide the services together but not necessarily concurrently.[1]

Examples of NPPs include physician assistants, nurse practitioners, and clinical nurse specialists.

When both the physician and NPP see a patient on the same day, as long as the billing physician personally performs a substantive portion of the visit, the combined work can be billed under the physician’s provider number regardless of which provider (physician or NPP) does the majority of the work. Under these rules, CMS reimburses 100% of the Medicare MPFS (versus 85% for NPP efforts).

The 2022 MPFS Final Rule defined substantive portion for visits other than critical care visits as either:

1. “one of the three key E/M elements (that is, history, exam, or [medical decision making])” or
2. “more than half of total time.”[2]

While implementing this policy, CMS divulged that they planned to transition to defining substantive portion solely as "more than half of total time” with the 2023 MPFS.[3] However, in 2023, the definition was modified to “more than half of the total time, or a substantive part of the medical decision making.”[4]

The proposal to define substantive portion strictly by time was delayed until January 1, 2024, and later delayed again until December 31, 2024, after CMS received concerns and requests to retain “medical decision making (MDM)” in the definition.

‍As of 2025, CMS continues to define substantive portion for visits other than critical care visits as either:

1. a substantive part of the MDM or
2. more than half of total time.[5]

As long as the physician’s contribution meets one of these requirements, the service can continue being billed under the physician. CMS has not offered a timeline for future changes to this definition, and they continue to seek and consider feedback on whether it should be permanently modified.

Substantive portion for critical care visits has been and continues to be defined as more than half the time spent by the physician or NPP as critical care visits do not use MDM. Further, as of 2024, for prolonged visits, the substantive portion is defined as more than half of the practitioners’ total time as MDM is not applicable.

While the proposed definitional change is intended to better align reimbursement and productivity with the provider primarily providing the service, healthcare professionals have raised concerns about “disruptions to current team-based practice patterns and the potential for significant adjustments to the practice's internal processes or information systems to allow for tracking visits based on time, rather than MDM.”[6]

Specifically, under the proposed definition, much of the work historically billed under and credited to physicians would not meet the “more than half of the total time” criteria. It would therefore be credited to the NPPs in the relationship and reimbursed at 85%.

If this change goes into effect, the specialties most heavily impacted will be those in which NPPs perform a large portion of the work from a time perspective (e.g., hospital medicine and cardiology). In such specialties, we estimate up to 90% of production could shift to NPPs, leaving only higher complexity cases to be billed by physicians.

We also anticipate key operational and economic effects should the proposed definition be accepted.

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Key Effect #1: Adjustments to billing and coding practices

Practices will need to develop methodologies for determining which practitioner spent more than half the total time with the patient to judge if a service should be billed under the physician or NPP.

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Key Effect #2: Reduction of revenue

Because NPPs are typically reimbursed at 85% of the physician rate, service lines that rely heavily on NPPs (and consequently will have to bill many services under their NPPs) will be at risk of reduced revenue. This could have a material impact on the financial operations of a health system.

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Key Effect #3: Changes in practice patterns

This policy change could incentivize physicians to provide services that would be more appropriate from an operational efficiency and utilization standpoint for an NPP to provide.

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Key Effect #4: Modifications to compensation structure

If our estimates regarding the shift in production are correct, work relative value units (wRVUs) historically attributed to physicians will be allocated to NPPs. Physicians on a wRVU productivity-based compensation plan may experience decreases in compensation unless they change practice patterns (with the opposite being true for NPPs on wRVU productivity-based models). The ability to compare compensation year over year and to survey benchmarks will be affected.

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To appropriately incentivize physicians and NPPs and maintain operational efficiency, health systems will need to update their compensation models to align with the new wRVU attribution. It is possible physicians will advocate to move away from wRVU productivity-based models and/or establish NPP supervision as a larger contributor to total physician compensation. Oppositely, NPPs may advocate transitioning to productivity-based compensation models as more wRVUs will be credited to them.

Health systems may alternatively opt to transition away from individual wRVU-based productivity compensation models, establishing salaries, time/shift-based models, or team-based models in their place.

While it may not come to fruition, we do urge health systems to proactively review how this change in split/shared regulations could impact operations. Specifically, we recommend reviewing a sample of past claims to estimate its effects. We also encourage reviewing provider contracts, identifying potential impacts on compensation, and determining whether changes should be incorporated during the contract renewal process to minimize repercussions of the proposed regulatory change. Finally, we advise health systems to establish a process (or at least have a plan to do so) to track the actual time spent by each provider during an encounter. This will help organizations remain compliant and enable them to react efficiently and effectively should new billing rules go into effect.

At Coker, we specialize in assisting organizations with staying current on regulatory changes, evaluating their operational and financial implications—including the impact on provider compensation—and implementing processes to effectively support any required adjustments. Contact us to learn how we can help you.