NP Billing, Coding, and Reimbursement

Outpatient NPs

According to the Child Health Corporation of America’s (CHCA) white paper, nurse practitioner billing promotes access to care (Cavender, Fitzgerald, Mohan, Parsons, & Silvestri, 2009).     Billing is an important component of providing documentation of NP productivity.  NP billing can be completed in two ways; independent or “incident-to”.  With independent billing the patient is scheduled and billed under the National Provider Identification (NPI) number of the NP providing the care.  With “incident-to” billing, the patient may be scheduled under the physician or NP, but the bill is submitted using the physician’s NPI number.

With independent billing an NP can bill for the level of care, time spent with the patient, diagnosis, preventative medicine, and patient counseling.  Billing is complicated and requires education and resources to maximize reimbursement and avoid inappropriate billing practices.  Education on billing could and does take entire books to explain.  It is recommended that NPs become knowledgeable of billing regulations, or work with the billing department to help guide their practice.

Documentation is crucial to support the level of billing submitted for reimbursement. This documentation can include the systems reviewed, examination performed, diagnoses made, treatment provided, and recommended follow-up.  Some practices may have a billing department that will help provide feedback on documentation.  The feedback can demonstrate that the documentation is too limited to support the level of care being billed, or that the bill is not reflective of the level of care provided to the patient. These can be examples of over or under billing for services provided.  It is advantageous to have outside reviewers audit billing practices.

“Incident-to” billing is billed under the physician’s NPI number.  This is usually done to receive full reimbursement for services provided.  According to MedPAC (2002), NPs are paid at 85 percent of the physician fee schedule, and these payment differentials have no specific analytic foundation for Medicare providers. Private insurance companies often follow the rules determined by Medicare for reimbursement; however, some insurance companies reimburse NP services at a higher or lower rate than Medicare. If an NP bills “incident to,” implying supervision is required; the reimbursement is 100% of the physician’s fee schedule.  This policy undermines the ability to truly evaluate the level of care provided by the NP, as they are not billing under their own provider number. When this happens, their name is not reflected on the billing statement and the care that they provided becomes “invisible” to payers. The NP’s ability to demonstrate the clinical and financial outcomes related to the care they provide is impossible when using “incident-to” billing.

It is critical to advocate for the same reimbursement for NPs, physicians, and other health care providers when performing the same service. The NP’s ability to demonstrate the clinical and financial outcomes related to the care they provide is critical to support changes in coverage and reimbursement rules to increase NP reimbursement and visibility. Efforts to document these measures are hindered because third-party payers often require that NP services be billed under a physician-colleague’s name and provider number (National Association of Pediatric Nurse Practitioners, 2009).

When a management plan has been established by a physician, but carried out by an NP, “incident-to” billing may occur.  In these cases, the patient must have been evaluated by the physician first, diagnosed, and have a plan of care established prior to the follow-up visit with the NP.  All new patients or patients with a new problem seen by an NP must be billed using independent billing.  When billing as “incident-to”, the NP may be recognized as the care provider but the MD is recognized as the billing provider.  NPs will receive 100% reimbursement from public aid in all cases of “incident-to” billing.  Ineligibility for reimbursement in the past has been a major barrier for NPs to provide care to their patients and ultimately reduces access to care to a nation that is struggling to meet the needs of their population.

Inpatient NPs

Usually, there is an individual from the billing department who is assigned to a particular service or unit for inpatient billing services. It is valuable to be familiar with the billing and coding personnel who are responsible for billing for the services performed by NPs.  Meeting with this individual(s) can be beneficial for both the NP and the institution, especially if the institution has not had much experience billing for NP services.  Billing systems (e.g. paper versus online) vary greatly by hospital.

Billing services are categorized by the type of visit (e.g. new, consultation, established,  outpatient). These are then further stratified based on history, examination, and medical decision making (MDM). The history and examination will depend on the complexity of the services.  The examination may be problem focused, expanded problem focused, detailed, or comprehensive. These different levels are determined by the presence or absence of history of present illness, review of systems, and personal family/social history.  The MDM is divided up into straightforward, low complexity, moderate complexity, or high complexity. There are also specific categories for pre- and post- operative patients, and established outpatients. A split/shared evaluation and management visit is jointly provided by a physician and an independent non-physician practitioner (e.g., nurse practitioner, physician assistant, certified nurse specialist or certified nurse midwife) from the same group practice. Specific to the inpatient setting, an NP may not bill for services if he/she is fully compensated by the hospital. In these cases, the NP’s time is rolled into hospital bill. In order for an inpatient NP to bill for any services, the NP must receive some of his/her salary from the practice plan.


Cavender, J. D., Fitzgerald, S., Mohan, A., Parsons, L., & Silvestri, A. (March, 2009). Maximizing access in children’s hospitals requires modifying the role of the nurse practitioner. White Paper Child Health Corporation of America , 1-11.

Medicare Payment Advisory Comminssion. (2002). Report to the Congress: Medicare payment to advance practice nurses and physician assistants. Retrieved February 26, 2010 from MEDPAC:

National Association of Pediatric Nurse Practitioners (NAPNAP). (2010). NAPNAP Position Statement on Credentialing and Privileging for Nurse Practitioners. Journal of Pediatric Health Care, 24(3), A15-A16.