PAs Deserve Direct Reimbursement for their Services

March 23, 2018
Stephen H. Hanson, PA-C

Unlike physicians, APRNs, and other health professionals, physician assistants do not receive direct reimbursement from insurers.

The practice of medicine by physician assistants (PAs) has evolved significantly during my professional career. Supporting a trajectory that began in 1967 with one-on-one physician-to-PA oversight, gradually arcing upward to 2018 when dynamic clinical teams provide sophisticated patient care, the American Academy of PAs (AAPA) recently adopted policy regarding the future of that PA practice.  Commonly referred to as Optimal Team Practice (OTP), the new policy calls for laws and regulations that:

• Emphasize PAs’ commitment to team practice;
• Authorize PAs to practice without an agreement with a specific physician - enabling practice-level decisions about collaboration;
• Create separate majority-PA boards to regulate PAs, or give that authority to healing arts or medical boards that have as members both PAs and physicians who practice with PAs; and
• Authorize PAs to be directly reimbursed by all public and commercial insurers.

Having addressed the first three OTP points in previous blog posts in November and earlier this month. Today, I am blogging about point four, the need for laws and regulations to authorize direct reimbursement for medical services provided by PAs from all payers, both public, and commercial.

PAs are the only health professionals billing Medicare who are not entitled to direct reimbursement. Medicare allows physicians, advanced practice registered nurses (APRNs), and other health professionals to receive payment directly; payment for services provided by PAs must be made to the employer. In the commercial insurance market, nearly all third-party payers follow the Medicare approach, making payments to PAs’ employers. This outdated policy limits PA employment opportunities, particularly with staffing companies and other healthcare delivery arrangements whose providers “reassign” their reimbursement to the company that employs them. 

Because PAs can’t receive reimbursement directly, they can’t reassign their reimbursement in the same manner as physicians and APRNs. Allowing direct reimbursement for PAs would level the employment playing field and simplify administration for staffing companies in order to employ PAs.  Whether they work for a staff agency or a hospital or private practice, in most cases, PA reimbursement will be assigned to the employer, similar to physicians and APRNs. The inability to be paid directly also hinders PAs from being recognized in certain value-based payment arrangements and emerging models of innovative healthcare delivery.  If PA services are not tracked and billed separately, they cannot be counted toward revenue.

Even ore important, the failure to allow PAs to be directly reimbursed  makes our contributions to patient care from a quality and productivity perspective more difficult to recognize by health systems, researchers, and policy makers. In many situations and organizations, PAs are hidden under the NPI numbers of physicians or organizations. This creates data inaccuracies as it misrepresents who actually delivered care.

It makes no sense to treat PAs differently from any other health care provider delivering direct patient care in our health care system. PAs and the services that we deliver need to be properly accounted for within every organization, practice, and health care setting, Allowing an accurate accounting of the PAs’ contribution to health care will contribute to making a stronger, more accountable system of care.

PAs, along with potential employers, are adversely affected by the inability of PAs to be eligible to receive direct payment. Direct payment and the contingent ability to reassign benefits provide the necessary flexibility to meet the clinical needs of patients in a variety of practice settings and care models. Traditional practice models of one physician employing one PA have been replaced by models in which PAs, physicians and other healthcare team members practice in hospitals, health systems, and emerging healthcare delivery venues in more innovative, patient-centered arrangements.

The proposals for changes to laws and regulations included in OTP make sense and have many benefit physicians too by reducing administrative burdens and increased flexibility in team care.  They also eliminate physician liability for care provided by the PA unless the physician was involved.  OTP empowers teams to make decisions about team practice and team design at the practice level and eliminates the threat of disciplinary action for physicians and PAs involved in “paperwork infractions” unrelated to patient care.

Informed regulation of the PA profession makes PAs more valuable team members for physicians. OTP is the right prescription for our evolving healthcare world.