Physician Assistant Billing Best Practices: How to Prevent Denials and Protect Revenue

For many independent practices, multispecialty groups, and hospital based providers, Physician Assistants (PAs) are central to clinical throughput and patient access. Financially, however, PA services are often underperforming. Denials tied to supervision rules, modifier misuse, and payer specific policies quietly erode margins every month.

Executives typically see this in two places on dashboards: a disproportionately high denial rate on PA rendering NPI, and chronic underpayment or write offs on services that should have been reimbursed at 85 percent of the physician fee schedule or at contracted rates. In some organizations, six figure annual revenue losses trace back to a small cluster of preventable PA billing errors.

This article outlines a practical framework for billing PA services correctly, reducing denials, and recovering underpaid or out of network revenue. The focus is operational: how to implement consistent rules across your RCM team, how to align with payer policies, and which metrics you should watch to know if PA billing is truly under control.

Understand the Core Payment Models for Physician Assistant Services

Every PA billing strategy starts with clear understanding of how the service will be paid. In most U.S. settings there are three primary models, each with different documentation and billing implications:

• Direct billing under the PA NPI (e.g., Medicare at 85 percent of the physician fee schedule)
• “Incident to” billing under the supervising physician (often at 100 percent, but with strict rules)
• Payer specific PA billing under a supervising physician with a modifier (for example, SA) or special taxonomy configuration

Why this matters: If your RCM staff cannot state which model applies for a given payer, place of service, and visit type, there is a high risk of front end errors that cascade into avoidable denials. Many payers will not “fix” the claim for you; they simply apply a denial code such as “provider not eligible for this service” or “outside scope of license.”

Operational framework:

• Build a payer matrix that, for each major plan, answers four questions:
  • Can the PA enroll and bill directly, and in which POS?
  • Does the plan permit incident to billing, and where is it prohibited?
  • When billing under a physician, which modifier (for example, SA, AS) is required?
  • Are there outlier rules for emergency, hospital based, or surgical first assist services?
• Embed this matrix inside your practice management or claim scrubber rules so that rendering provider, supervising provider, and modifier fields are validated before claim submission.

Key KPIs to monitor:

• Percentage of PA claims denied due to provider eligibility or licensure codes
• Average allowed amount per PA visit by payer compared to expected schedule (85 percent or contracted rate)
• Incidence of payer downcoding PA services because incident to requirements were not met

Leadership implication: If your denominator for PA services is small but denial rates are high, you can correct a meaningful revenue gap quickly with better rules and education, without adding staff.

Apply the Correct Modifiers and Supervising Provider Rules for Each Payer

Once your team knows which payment model applies, the next source of leakage is usually modifiers and supervising provider configuration. Many commercial payers require that PA services be billed under the supervising physician with a PA specific modifier, such as SA, even when the PA is the one who furnished the service.

Common mistakes include:

• Leaving modifier SA off for a payer that requires it for all APP services
• Using the PA as rendering when the payer expects the physician as rendering plus SA modifier
• Failing to populate Box 17 (referring or supervising provider) on the CMS 1500, even though the payer uses it to validate supervision
• Copying Medicare rules directly to a commercial payer with very different configuration needs

Operational steps to harden this area:

• For each top 10 payer by volume, document the exact combination of:
  • Rendering provider NPI (PA vs physician)
  • Supervising or referring provider field usage
  • Required PA related modifier (for example, SA, AS for surgical assist)
• Configure your claim scrubber to generate hard edits when a PA is associated with a payer that has a known rule and the required combination is missing.
• Perform a monthly denial root cause analysis specifically on CARC codes like 16, 109, or 185 where remark codes tie back to provider eligibility or modifier errors.

RCM example: A multispecialty group finds that one national commercial payer is denying over 70 percent of PA claims with “outside provider scope.” A quick sample review reveals that all PA visits are billed under the PA NPI with no SA modifier. The payer policy, however, clearly states that PAs must bill under the supervising physician with modifier SA. Rebilling under the physician with SA recovers a large block of otherwise written off receivables and permanently cuts the denial rate once rules are updated.

Differentiate Direct PA Billing from “Incident To” and Protect Audit Risk

Many practices attempt to maximize reimbursement by using incident to billing whenever possible, but this area is also one of the most heavily scrutinized in payer audits. Executives must balance short term reimbursement against compliance risk and denial potential, especially when documentation does not fully support “incident to” requirements.

Why this matters financially:

• Improper incident to billing can trigger recoupments, extrapolated overpayment calculations, and even accusations of false claims.
• Underbilling, on the other hand, occurs when a PA bills at 85 percent directly even though the encounter legitimately meets incident to requirements and could have been paid at 100 percent.

Key Medicare aligned principles (commercial payers may vary):

• A physician must have initiated the course of treatment and remain actively involved.
• The PA must be providing services that are part of that established plan of care.
• The physician must provide direct supervision in the office setting meaning present in the suite and available.
• Documentation should clearly reflect physician involvement, not just a boilerplate phrase.

Operational framework for safe incident to use:

• Create clear encounter level decision trees for billers:
  • Is this a new problem or new patient? If yes, do not bill incident to unless payer policy specifically allows it.
  • Was a physician visit documented previously that initiated this plan? If no, bill under PA at 85 percent or per payer rule.
  • Was a supervising physician present as required by the payer on the date of service? If not documented, avoid incident to.
• Include PA specific training so they understand documentation language that supports incident to, rather than relying solely on billing staff to “figure it out” later.

Metrics and controls:

• Percentage of PA services billed as incident to by payer, specialty, and location
• Number of documentation related denials or post payment review findings tied to incident to misuse
• Random chart audits quarterly to confirm incident to claims have documentation that would stand up to payer review

For leadership, a good rule of thumb is to use incident to selectively, only where clearly supported. Over aggressive use may produce superficial revenue lift but comes with significant downside risk.

Address Out of Network PA Claims and Repricing Proactively

PAs frequently work in practices or hospital based groups that are out of network with specific plans. In these situations, payers may apply automated repricing programs, third party repricers, or simply deny services based on plan exclusions. PA services complicate this further because many plans only credential physicians in the specialty, not PAs, even when they pay for PA work under the physician umbrella.

Typical problems with out of network PA claims:

• Claims denied as “no contract” when billed under a PA NPI that is not recognized
• Extreme underpayments where payer repricing rules did not factor the correct usual and customary for PA services
• Failure to pursue appealing or negotiating payments when the underlying physician or group has leverage

Operational strategies to improve recovery:

• Where payer policy allows, bill out of network PA services under the supervising physician that is recognized by the plan, using the required PA modifier.
• Flag high dollar out of network PA claims in A/R workqueues for manual review. Do not let them age out as small balance adjustments if they represent a systematic underpayment.
• Develop standard appeal templates that cite payer policy, medical necessity where relevant, and benchmark data when arguing for reasonable out of network reimbursement.
• Where significant volume exists with a single payer, consider targeted contracting or single case agreements, especially for surgical services where PAs act as first assist.

KPI focus:

• Out of network PA revenue as a percentage of billed charges, by payer
• Appeal success rate for out of network PA claims
• Average days in A/R for out of network PA encounters, separated from in network metrics

For CFOs and RCM leaders, the question is not only “are we getting paid something” but “are we getting paid fairly and consistently according to the leverage we have.” PA services should be part of that strategy, not an afterthought.

Standardize PA Enrollment, Credentialing, and Provider Master Data

Many PA billing denials are not caused by coding or documentation but by upstream credentialing and provider data issues. When PAs practice across multiple facilities, tax IDs, or specialties, the risk of mismatched NPI, taxonomy, or contract enrollment increases sharply.

Why this matters operationally:

• Claims can be denied or pended simply because the payer’s provider file does not match what you are sending, even if the service itself is payable.
• Provider level issues often generate repeated denials across many encounters until someone identifies the pattern.
• RCM staff waste significant time on phone calls with payers when the underlying problem is an enrollment gap that can only be fixed centrally.

Practical steps to stabilize PA master data:

• Centralize PA onboarding and termination so that RCM, credentialing, and HR all work from the same provider roster.
• For each PA, maintain a current grid that includes:
  • Associated supervising physicians by location
  • Which tax IDs and NPIs they practice under
  • Payers where they are individually enrolled vs billable only under a physician
  • Effective dates for enrollment per payer
• Perform quarterly reconciliation between your internal provider master and payer provider directories for PAs and supervising physicians.

Control metrics:

• Number of provider enrollment related denials per 100 PA claims
• Average time from PA hire to “clean” first paid claim across major payers
• Frequency of backdated enrollment or retroactive claim submissions for PAs

Executives should view PA credentialing as part of the revenue cycle foundation. If it sits only in an HR or compliance silo, you will inevitably see the impact in denials and A/R friction.

Train Front Desk, Clinical, and Billing Staff on PA Specific Scenarios

Physician assistant billing failures rarely stem from a single department. Front end registration, clinical documentation, coding, and billing all contribute. A practice may have a good coding guideline for PAs, but if schedulers select the wrong rendering provider or fail to capture supervising physician information, problems arise later that are harder to correct.

High impact scenarios that need cross departmental training:

• PA seeing a follow up patient initiated by a physician, which might qualify for incident to or must be billed directly depending on payer
• PA covering a supervising physician at a different office or facility where supervision rules differ
• Split or shared visits in facility settings where rules differ for Medicare vs commercial plans
• Surgical first assist where PA must be supported by operative note language and correct assist modifiers (for example, AS)

Recommended training structure:

• Quarterly PA billing workshops that include:
  • One session for clinical staff and PAs on documentation and supervision requirements
  • One session for front office and scheduling staff on how to select correct rendering and supervising providers in the system
  • One session for coders and billers on payer specific PA rules and recent denial trends
• Job aids or quick reference cards that summarize for staff:
  • Which payers allow incident to in your practice
  • Which payers require modifier SA or other PA related codes
  • Basic decision tree for when to bill under PA vs under physician

Metrics to evaluate training impact:

• Change in PA related denial rate in the 60 to 90 days after training
• Reduction in manual claim rework linked to incorrect provider selection
• Audit scores for PA documentation completeness in high risk encounter types

From a leadership angle, PA billing is an ideal test case for cross functional RCM education. It is narrow enough to tackle but broad enough to touch scheduling, clinical workflows, and billing.

Use Analytics and Focused A/R Work to Recover Missed PA Revenue

Even with good controls, most organizations carry a backlog of unresolved or underpaid PA claims. Rather than treating these as routine denials, a focused, analytics driven effort can rapidly convert them into cash and reveal systemic weaknesses in your processes.

Analytical approach:

• Segment A/R by rendering provider type and identify:
  • All open A/R where the rendering provider is a PA
  • All denials where the primary CARC/remark combination suggests provider eligibility, modifier, or scope of practice issues
• Within that segment, further classify:
  • In network vs out of network payers
  • High dollar vs low dollar encounters
  • Repeating denial codes for specific payers or locations

Workplan to convert analytics into cash:

• Prioritize high dollar and high repetition patterns. For example, if a single commercial payer represents 60 percent of PA denials, solve that configuration issue first.
• Develop batch correction strategies. If the error is systematic (for example, missing SA modifier), rebuild and resubmit corrected claims in batches instead of touching each claim individually.
• Track recovery performance specifically for PA claims. This makes the financial impact visible and helps justify continued attention and training.

Targeted KPIs:

• PA specific denial rate before and after remediation
• Dollar amount of PA related A/R recovered in a 90 day focused effort
• Decrease in average touches per PA claim in billing and A/R workflows

Organizations that treat PA billing as a standard analytic dimension, rather than a footnote, are more likely to identify and eliminate revenue leakage early.

Turn Physician Assistant Billing into a Repeatable, Auditable Process

As PA utilization grows, especially in primary care, orthopedics, surgery, and hospital based specialties, the financial stakes of getting PA billing right grow with it. The organizations that win are not those with the most complex rules, but those with clear, consistent, and auditable processes that staff can actually follow.

From a business standpoint, robust PA billing practices:

• Reduce preventable denials and rework, which lowers cost to collect
• Increase allowed revenue per PA FTE by ensuring correct payment model usage
• Limit compliance risk around incident to and supervision requirements

If your team lacks internal bandwidth or specialized expertise to tighten these processes, partnering with experienced RCM professionals can accelerate results. One of our trusted partners, Quest National Services, specializes in full service medical billing and revenue cycle support for organizations that rely heavily on advanced practice providers and need consistent application of payer specific rules.

If you want to benchmark your current PA denial rate, review your payer matrix, or explore how to restructure workflows around PA services, start by talking with your internal RCM team and clinical leadership together. Then, if you need support implementing changes or evaluating external help, contact us. A focused review of PA billing can unlock meaningful cash flow improvements without adding more clinic volume or providers.