Editor's note: Implementation of the 2023 split/shared encounter rule is set to be delayed until January 2024. Learn more.
If you find yourself and your teams scrambling to understand the potential impact of the Centers for Medicare & Medicaid Services’ (CMS’) 2022 and 2023 rules, you are certainly not alone. To better define next steps, it can be helpful to first consider historically compliant split/shared workflows.
What used to be true
To promote efficiencies and maximize reimbursement, advanced practice providers (APPs) were often utilized to “pre-round” on patients while physicians completed surgeries, procedures or office encounters. At the conclusion of that work, the physician would revisit each patient the APP saw, adding a “substantive” (i.e., few sentence-long) attestation including information about the history, physical exam or medical decision making (MDM) to the bottom of the APP’s completed note and bill a level of service based on the totality of the entire document under the physician’s national provider identifier (NPI), capturing 100% reimbursement for the encounter.
Depending on organizational policy, this scenario would earn the physician most, if not all, the RVUs, whereas APP time spent reviewing the EHR, interviewing the patient, developing the note and documenting the service was, financially speaking, not apparent to anyone outside the physician-APP team. In the absence of another means to quantify APP time, organizations likely saw less-than-median APP production as evidenced by wRVUs alone, had perceived high subsidization of APP salaries and, perhaps, higher-than-expected physician earning.1
In addition to a blurred understanding of productivity, these workflows often made ongoing professional performance evaluation — a metric used to document evidence of ongoing clinical competency — or overall care quality challenging to parse, especially in cases in which the physician became the author of the entire note. This scenario also proved nearly impossible for compliance teams and payers to audit.
What is true in 2022
Fast forward nearly 20 years, and the use of APPs, especially in hospitals, has greatly expanded to meet patient care needs.2 CMS rules for split/shared encounters are frequently confused with teaching physician or incident-to rules.3 Presumably to address confusion and clarify their position, CMS codifies its split/shared rule into CMS Regulation § 415.140. This change will permit a one-year transition period as clinicians and their organizations adjust care models to allow for compliance with final rule implementation in 2023, a journey depicted in Table 1.
So how does the new rule differ from the former rule? For physician and APP teams, the initial rule update in January 2022 likely has not changed much in practical terms. First, the physician and APP must still be part of the same group. Additionally, the APP can still “tee up” the patient as described above, and the physician can bill if the physician’s documentation is “substantive.”
All said, there are some changes in 2022. First, “substantive” has a new definition. Rather than a brief attestation, CMS defines substantive as completion of all required components for the history, physical exam or MDM based on the level of service billed.4 Alternatively, or in the circumstance of time-based billing such as with critical care, the definition of substantive can be met by a physician or APP providing more than 50% of the total time spent on eligible activities for the patient encounter (see Table 2).
Furthermore, billing criteria could conceivably be met even when one of the providers did not see the patient, and the physician and APP team can share far more encounter types than ever before, such as new patient, critical care and skilled nursing facility visits (see Table 3). Finally, the modifier “FS” must be appended to each claim, ensuring that organizations and CMS can better evaluate rule compliance.
Taken at face value, these changes may seem subtle and in some ways an expansion of split/shared. If viewed by themselves, 2022 rules may tempt organizations to encourage increased utilization of shared encounters; however, as of January 2023, the only provider who can bill the service is the one who documents substantively, and the only definition of substantive will be the physician or APP who provides more than 50% of the time spent on eligible encounter activities.
What will be true in 2023
Consider the workflow example referenced before, in which the APP reviews the EHR, examines the patient, develops the plan and writes the note: The APP will be the billing provider unless the physician spent more than half the total time in activities (e.g., patient education, care coordination or provider-to-provider communication). CMS also requires that documentation reflect the individuals participating in the care, and the billing provider must sign and date the record, something that may be challenging for facilities that mandate physician countersignature to some or all APP encounters.
Prior to January 2022, the physician has not been required to spend more than 50% of the time on each encounter, and the activities included in time calculation have typically been provided by APPs. All said, current shared encounter workflows executed post-2023 will drive an increase in APP billing volume.
Depending on the payer, when the APP bills the service, it will likely be reimbursed at less than the physician rate (85% for Medicare, but reimbursement may be higher for private payers), representing a loss of roughly 15% for the same service provided a year ago.
An added concern is the consequence for rule violation. Even prior to 2022, split/share rule non-compliance was met with significant financial penalty. According to the Healthcare Compliance Association, an Ohio hospital was fined more than $200,000 for billing physician assistant (PA) services under the supervising physician when documentation did not meet the requirements.5 Now that CMS is necessitating a modifier, there is little doubt that audits and subsequent fining will increase.6
Finally, increased transparency for split/shared services will likely perpetuate some compliance concerns. First, shared physician-APP services billed for by the physician may potentiate Stark law violation inquiries, especially when the APP and physician are employed by different entities.7
Second, there may be increased risk of payer audit when the patient is billed a professional fee from a provider who has not provided face-to-face care.
How to prepare for successful transition
While the challenge of such a change may seem insurmountable, the invitation is for health systems and medical groups to embrace this as an opportunity. As every healthcare provider is painfully aware, patients are sicker than they have ever been. This coupled with a lean, post-pandemic workforce creates a perfect opportunity for groups to wrap their arms around ways to best leverage a diverse workforce composed of a variety of unique clinical disciplines.
Consider the following three questions to ensure your care delivery models align with these rules without suffering cultural, financial or quality setbacks.
How does your organization quantify and subsequently reward shared work?
According to SullivanCotter, only about a third of organizations offer APP incentives for team-based care.8 In addition, few have insight into how frequently teams engage in shared work. Gaining clarity around how to track and ultimately incentivize teams to support new workflows creates a path forward for medical groups interested in evolving their care delivery to better match increased demand for services in an environment where physician resources are in short supply.9
Considering APPs typically earn well less than 85% of their physician colleagues, how will a 15% reduction in reimbursement impact revenue?
In 2020, MGMA reported groups that have learned to effectively apportion APP and physician work enjoy better financial performance than those teams with a lower APP-to-physician ratio.10 Therefore, while an initial reduction in reimbursement may be a primary concern, downstream analysis may reveal a financial upside, especially when each provider spends more time focusing on the highest level of independent work their training prepares them to provide.
As we determine solutions for getting the patient to the right provider at the right time, how do we keep a pulse on care quality and compliance?
Multiple studies demonstrate APPs provide quality patient care, even when patients are acutely ill.11,12 A recent study demonstrated facilities with more inpatient nurse practitioners (NPs) saw lower 30-day mortality and decreased length of stay.13 Perceived competition for billing and ambiguity surrounding quality can hamper organizational success and may lead some to consider reallocation of needed APPs resources away from the hospital. Rather than relying on individual care team members to direct general resource utilization, strong awareness of workforce capabilities and overall care team attitudes at a higher level of leadership allow for best-practice strategic clinical deployment.14
Role definition and subsequent responsibility allocation are complex in normal conditions; present circumstances create a great need for role and responsibility redefinition despite significant difficulty. Medical groups that opt to meet this challenge head-on are best served by focusing efforts in these areas of interest:
- Care delivery environment: Do shared encounters only occur in the hospital or do they also occur in the outpatient setting, such as a free-standing medical practice? If the latter, do these practices meet the facility portion of the split/shared rule?
- Cultural preparedness: Which clinical disciplines have a seat at the strategic table, and should that be expanded to include advanced practice?
- Payer enrollment: Are all your APPs enrolled with payers? If so, are appropriate taxonomy codes being utilized? Is your organization routinely billing under their NPI when they render the service? If not, is there are plan in place to enroll them to avoid inability to reimburse for services entirely?
- Policy: Has policy been updated to drive regulatory compliance with these rules and support care delivery or billing redesign? If so, does policy address more nebulous concepts such as provisions for billing when face-to-face care was not provided or circumstances where employed APPs collaborate with physicians employed by different groups?
- Education: Are physicians and APPs aware of this transition and how it will impact them? If not, who is best positioned to deliver this message?
CMS’ updated split/shared rule will likely create a seismic shift in billing, compensation and clinical collaboration between physicians and APPs in the facility setting. Organizations that reimagine care team dynamics — allowing for top-of-training utilization of scarce clinician resources to align with care needs, regulatory requirements and operational budgets — will likely see earlier fiscal stability while maintaining positive clinical outcomes as the healthcare regulatory landscape continues to evolve.
- For more insights from this author, MGMA members can watch the on-demand webinar, "The 2023 Split/Shared Rule: Is Your Medical Group Ready?"
- Brooks PB, Fulton ME. “Demonstrating advanced practice provider value.” JAAPA, 32(2), 2019, 1–10. Available from: bit.ly/36Ecsl1.
- Pittman P, Leach B, Everett C, Han X, McElroy D. “NP and PA privileging in acute care settings: Do scope of practice laws matter?” Medical Care Research and Review, 77(2), 2018, 112–120.
- Rumpke A. “Split shared encounters explained.” OAAPN. Aug. 10, 2020. Available from: bit.ly/3ityHgj.
- McWilliams T. “The 2022 CMS split/shared visit rules and the anticipated impacts.” HSG Advisors. Dec. 9, 2021. Available from: bit.ly/36hbDip.
- Health Care Compliance Association. “Ohio hospital settles case over billing for split/shared visits.” Aug. 26, 2019. Available from: bit.ly/3tA4fay.
- National Alliance of Medical Auditing Specialists. “Split/shared services: ‘a simple primer to prime you.’”Feb. 1, 2022. Available from: bit.ly/3L6CSuL.
- Oppenheim C, Joseph A. “Caution: Hospital nurse practitioners may raise Stark issues.” Compliance Today. April 2017. Available from: bit.ly/3wtDiHu.
- SullivanCotter. Advanced practice provider compensation and productivity survey. 2021. Available from: bit.ly/3tz7aAk.
- American Association of Medical Colleges. June 2021. Available from: bit.ly/3L9v9vX.
- MGMA. Optimizing advanced practice providers in healthcare. October 2020. Available from: bit.ly/3Nj6U00.
- Landsperger JS, Semler MW, Wang L, Byrne DW, Wheeler AP. “Outcomes of Nurse Practitioner-Delivered Critical Care: A Prospective Cohort Study.” Chest. 2016 May;149(5): 1146-54. doi: 10.1016/j.chest.2015.12.015.
- Kleinpell RM, Grabenkort W, Kapu AN, Constantine R, Sicoutris C. “Nurse practitioners and physician assistants in acute and critical care.” Critical Care Medicine, 47(10), 2019, 1,442–1,449. Available from: bit.ly/36GB3Wm.
- Aiken LH, Sloane DM, Brom HM, Todd BA, Barnes H, Cimiotti JP, Cunningham RS, McHugh MD. “Value of nurse practitioner inpatient hospital staffing.” Medical Care, 2021:59(10), 857–863. Available from: bit.ly/3quF4Ez.
- Hostetter S. August 24, 2020. “Deploying apps autonomously.” Advisory Board. Available from bit.ly/3L8JPLH.