Understanding how split and shared billing arrangements influence healthcare revenue is crucial for providers aiming to optimize reimbursement and compliance amidst evolving regulations. This billing practice, involving multiple providers such as physicians and advanced practice providers (APPs), requires careful navigation, especially as CMS updates its guidance on determining billing responsibility. As healthcare organizations adapt to these changes, a strategic approach can help mitigate financial risks and capitalize on potential revenue opportunities.
Split/shared billing occurs when both a physician and an APP collaborate on a service, but only one can bill for it. Historically, the billing responsibility was based on which provider performed the activity—either the exam or the medical decision-making process. However, CMS is shifting toward a new guideline that assigns billing based on which provider spends more than 50% of the service time. This change was scheduled for implementation on January 1, 2024, but it appears to be delayed until January 1, 2025. The implications of this shift are significant, particularly because APPs are reimbursed at approximately 85% of physician rates. Consequently, the application of split/shared billing rules could materially affect healthcare revenues, depending on organizational practices and provider roles.
To better understand the financial consequences, it is helpful to analyze various scenarios around split/shared billing—both current practices and potential future implementations.
Current Utilization of Split/Shared Billing
In organizations already employing split/shared billing, changes in the rules—particularly the move to a time-based determination—may lead to more frequent designation of APPs as the billing provider. This shift could result in a 15% reduction in reimbursement for those services. The extent of this impact depends heavily on how physicians and APPs share their clinical responsibilities and documentation habits. Practices with a higher reliance on APPs for patient care might see more services billed under the lower reimbursement rate, influencing overall revenue streams.
Future Possibilities of Split/Shared Billing
Organizations not currently using split/shared billing but participating in joint service provision might find opportunities to adopt this approach. When both providers contribute, but neither bills independently due to not meeting full billing criteria, services often go unreimbursed. By implementing proper documentation and adhering to billing guidelines, practices can leverage split/shared billing to recover revenue that would otherwise be lost.
Additionally, regulatory changes may open new avenues for billing arrangements. For instance, if physicians and APPs who previously operated in separate groups are unified under a single organization—such as hospital employment—the opportunity for split/shared billing can emerge. This scenario can be advantageous, especially if hospitals decide to integrate their provider teams more closely. Conversely, there could be compliance risks if physicians in private practice bill for services as if they were solely performed by them when, in fact, an APP was involved. Transitioning to compliant split/shared billing in such cases might lead to revenue adjustments, potentially decreasing income if the billing responsibility shifts from the physician to the APP.
Finally, some organizations may experience shifts in provider composition and service patterns that make split/shared billing not only possible but necessary. Moving toward a greater role for APPs could lower average reimbursement per service but might be offset by operational efficiencies, cost savings, and increased provider capacity. For example, adopting advanced technologies such as virtual reality in sports medicine can assist in performance enhancement, aligning with the broader trend of integrating innovative approaches into clinical practice e.g., elevating athletic performance through virtual environments.
In a similar vein, healthcare organizations are exploring the potential of artificial intelligence to automate and streamline clinical workflows, which could influence billing practices and efficiency see more about AI applications in healthcare. These technological advancements are transforming the operational landscape, emphasizing the importance of strategic billing management to maximize revenue while maintaining compliance.
Final Thoughts
The complexity of split/shared billing underscores the necessity for healthcare providers to thoroughly understand both the regulatory environment and their internal operational dynamics. Since the rules governing billing responsibility are evolving, organizations must proactively evaluate their practices, documentation standards, and provider roles. Engaging with billing experts and leveraging strategic planning can help mitigate revenue loss and capitalize on new billing opportunities.
ECG’s specialists are equipped to assist healthcare organizations in developing tailored strategies for managing these regulatory changes effectively. Staying informed through resources like our Center for Split/Shared Success ensures organizations are prepared for future shifts and can adapt their operational models accordingly.
Ultimately, understanding and navigating the nuances of split/shared billing is essential for sustaining financial health amid ongoing regulatory transformations.