Split/Shared Billing: Revenue Implications

As we’ve discussed in previous posts, split/shared billing occurs when multiple providers, typically a physician and an advanced practice provider (APP), are involved jointly in hospital evaluation and management (E&M) services, each providing a portion of the service. Since both providers cannot bill for the service, and neither provider meets the full requirements for billing the service independently, CMS has issued guidance determining which provider will be the billing provider.

Historically, the determination for which provider will be the billing provider was activity-based (exam or medical decision-making). But CMS now proposes that it will be based on whichever provider spends more than 50% of the time performing the service. This change was expected to go into effect on January 1, 2024, but is likely to be delayed until January 1, 2025.

Because the APP is reimbursed at 85% of the physician rate, the use of split/shared billing and the rules for how it is applied may have material financial consequences. To understand these consequences both now and in the future, it may be helpful to consider several different potential billing scenarios involving whether split/shared billing is currently performed or is contemplated for the future.

• Split/shared billing is currently being utilized.

In this scenario, reimbursement could be impacted by the change in rules regarding who is the billing provider. With the transition to a time-based rule, it is very likely that APPs will be deemed the billing provider more frequently than if they are operating under an activity-based rule. In these instances, there would be a 15% reduction in payment; but the frequency with which this happens would depend heavily on the practice patterns of the physicians and APPs within that organization.

• Split/shared billing is not currently utilized, but is permissible.

This would most likely occur because both providers are participating in providing the service but neither provider bills for it because neither meets the full requirements to bill independently. As a result, reimbursable services are being provided for free. With appropriate documentation, and assuming that all the other billing requirements are met, split/shared billing would present an opportunity to capture additional revenue.

• Split/shared billing was not an option previously, but now is permissible.

This scenario could occur in several ways. One is that the physician and APP are in different groups (which precludes split/shared billing) but later become part of the same group. This might happen if the hospital employs the APPs and then decides to employ the physicians as well. If these providers had historically been sharing visits but not billing for those services, as in the previous example, a similar revenue opportunity might be possible.

However, the opposite could also hold true. If the physicians were in private practice working alongside hospital-employed APPs, and the physicians billed for split/shared services as if they were personally performed by the physician, there could be a noncompliant billing situation in effect. If this were to be corrected through the implementation of split/shared billing, future revenues may fall short of historical levels if the billing provider flips from the physician to the APP.

Lastly, there is the possibility that the group changes its provider mix and practice patterns such that split/shared billing becomes not only feasible but required. This would most likely result from shifting the provider mix toward APPs, which would lower the average reimbursement. However, this reimbursement penalty may be offset by provider cost savings and/or the creation of additional physician clinical capacity.

As these scenarios illustrate, there is no simple answer to the question of how split/shared billing will impact revenue within organizations. Answering that question will require a good understanding not just of the rule itself, but of the operating environment in which the rule will apply.

_{Edited by: Matt Maslin}

Published September 11, 2023