How Medicare pays a professional claim (837P)
A doctor, nurse practitioner or other practitioner bills their own services on a professional claim (837P, the electronic version of the 1500 paper form), and Medicare pays it on the physician fee schedule, adjusted for the locality the service ZIP falls in. The place of service on each line picks the rate. In the office (11), at home (12), on a home telehealth visit (10), at urgent care (20) or in a nursing facility (32) the practice carries its own staff, space and supplies, so it gets the higher non-facility rate. In a hospital (19, 21, 22, 23), an ambulatory surgical center (24), a SNF during a covered stay (31) or on telehealth from somewhere other than home (02), the facility is paid separately for the setting, so the practitioner gets the lower facility rate, and a diagnostic test pays only its professional part (modifier 26).
Same-day rules run by date of service: procedure-to-procedure bundling denies a column-two code billed with its column-one code, unit caps limit the units paid in a day, and the second and later procedures in a session pay at reduced rates. Lab tests on a professional claim are paid from the clinical lab fee schedule, drugs at their payment limit and braces or supplies from the DMEPOS fee schedule, not the physician fee schedule. Nurse practitioners, physician assistants and clinical nurse specialists billing under their own NPI are paid 85% of the physician amount, and an assistant at surgery 16% (13.6% for a non-physician assistant).
Questions
Why does the same visit pay less in a hospital than in an office?
Because in a facility the hospital, ASC or SNF is paid separately for the staff, space and supplies, so the practitioner’s fee leaves that part out.
How is a radiologist’s read priced?
With modifier 26, the professional component, which has its own fee schedule row. In a hospital, ER, ASC or SNF stay the facility bills the technical component.
Are inpatient consultation codes paid?
No. Medicare does not recognize the consultation codes 99252 to 99255; the visit is billed with the initial hospital care codes instead.
What about anesthesia or a co-surgeon?
Anesthesia is paid on the procedure’s base units plus one time unit per 15 minutes, counted to one decimal place, times the locality’s anesthesia conversion factor; the claim line reports the minutes. An anesthesiologist medically directing a nurse anesthetist (QK or QY) and the nurse anesthetist (QX) are each paid half, and a nurse anesthetist working alone (QZ) or an anesthesiologist working alone (AA) the full fee. Co-surgeons (62) are each paid 62.5% where the code allows two surgeons. For a whole inpatient stay, the Physician (837P) tab of Inpatient (IPPS DRG) prices every doctor’s claim next to the hospital’s DRG payment.