Major Changes to Split/Shared Billing Affect Advanced Practice Providers and Physicians
- May 2, 2023
The 2022 Medicare Physician Fee Schedule Final Rule included major changes to the treatment of split/shared billing for advanced practice providers (APPs) and physicians. After a one-year delay, these changes are to go into effect in 2024.
A split/shared visit is defined as “an E/M visit in a facility setting that is performed in part by a Physician and an NPP who are in the same group.” It is billed based on which provider performed the “substantive portion” of the service. For non-critical care split/shared visits in 2023, a substantive portion is considered “all or some portion of the history, exam or medical decision-making key components of an E/M service.” However, beginning January 1, 2024, a substantive portion is more specifically defined as greater than 50% of the time spent on the encounter.
The core consideration is that much of the work credited to the physicians in the past will not meet the “more than half of the total time” criteria. Therefore, the credit will go to APPs, and reimbursement will be at the APP rate of 85%. The purpose of the change appears to be to align reimbursement and productivity better with the provider that primarily provided the service.
5 Facts to Remember with Split/Shared Visits
- Applicable only in hospitals and skilled nursing facilities (SNFs), not in an office setting
- Must be billed with a specific modifier
- Previously only applied to established patient encounters
- Now applicable to new or established patients, initial and subsequent visits, critical care services, and prolonged services
- A modifier identifies the physician and APP that delivered care for the split/shared services
The split/shared billing change most heavily affects practices where APPs perform a large portion of the work from a time perspective (e.g., hospitalists, critical care, cardiology). In many cases, we expect up to 90% of production to shift to the APPs, with the remaining cases primarily being higher complexity cases.
The November 2021 regulations declined to define same group, creating ambiguity over the applicability of split/shared billing in the context of a physician and APP that do not practice under the same Tax-ID number. Instead, CMS will monitor the split/shared bills submission and determine if it will later define the term group. If a physician and APP are part of different groups, they would be unable to split/share billing for services rendered by both where the physician or APP did not independently complete a billable service; the physician or APP would bill only for the service that they performed.
This regulatory change will have a number of effects on both practice operations and economics. Impacted practices should proactively consider and address the effects of regulatory changes on compensation methodologies to ensure efficiency.
We summarize the operational and economic effects in the following sections.
Key Effect #1: Changes in billing and coding practices
Practices must develop a methodology for quickly and easily determining whether a service should be billed under the physician or an APP.
Key Effect #2: Revenue decreases
Due to the fact that billing under an APP reduces reimbursement, revenue decreases can be expected for any service line that relies heavily on the use of APPs starting in 2024.
Key Effect #3: Work RVU attribution
Work RVU (wRVU) attribution for compensation purposes, which will be both wRVU productivity of individual physicians and APPs as well as comparability to both historical data and survey benchmarks.
Key Effect #4: Incentivizes physicians, not APPs
A potential incentive for a physician to perform work that is more appropriate for an APP, reducing efficiency and the growth of APP utilization.
Key Effect #5: Compensation changes
By changing the level of services personally performed by physicians versus APPs, physician compensation may decrease, and APP compensation may increase.
Key Effect #6: Physician and APP compensation structure changes
The following changes to physician and APP compensation structures could occur:
- Alignment with the new wRVU attribution structure
- Shift to salary or time/shift-based compensation
- Shift to team-based compensation models
- APP supervision may become a more significant portion of total physician compensation
- APP productivity-based compensation may grow in popularity
We recommend proactive action to ensure a smooth transition to the new split/shared visit regulations. It is important to review contracts (of both physicians and APPs) to determine which may result in increased or decreased compensation due to changes in wRVU attribution. A sample of past claims should be reviewed to get a sense of the potential impact of the change in split/shared visit rules. Prospectively, it will be key to establish a process to track the actual time spent by each provider during an encounter that could be subject to split/shared visit billing rules. This will ensure compliance with new billing rules in 2024 and can be used to analyze the potential impacts on revenue and physician and APP wRVU productivity before the new billing rules are in effect.
Co-authored with Gunnar Bedford, an associate in Hancock Daniel’s Richmond office. Last updated May 2, 2023.