NR 506NP Week 5 NP Reimbursement and Credentialing Example

Three Approvals, Three Decision Makers: What a California 103 Nurse Practitioner Still Needs After the Board Says Yes, From Medicare's 85% Rate and the Incident-To Route to the Credentials Committee No Statute Reaches

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College of Nursing, Chamberlain University

NR 506NP: Healthcare Policy and Leadership

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Month Day, Year

Three Approvals, Three Decision Makers: What a California 103 Nurse Practitioner Still Needs After the Board Says Yes, From Medicare's 85% Rate and the Incident-To Route to the Credentials Committee No Statute Reaches

Three Approvals, Kept Apart

Nurse practitioner students often treat a license as permission to practice and be paid. It is neither by itself. In California, three separate approvals decide whether I can see a patient, whether anyone will pay for the visit, and whether I can do it in a particular building. Each has its own decision maker, and none of them is the legislature. This paper follows each approval for the situation I expect in three years: a family nurse practitioner, newly certified by the Board of Registered Nursing as a "103 NP," working in the federally qualified health center where I now work as an RN.

The license is issued by the Board of Registered Nursing. Under section 2837.103 of the Business and Professions Code, a certified 103 NP working alongside at least one physician in a clinic, facility or medical group can examine, reach a diagnosis, run and read diagnostic work and prescribe controlled drugs as well as others, with no standardized procedure required (California Business and Professions Code, 2025). That is what I may do.

Payer enrollment decides whether a claim will be paid, and by whom. Credentialing decides whether I may do any of it inside a given organization. The rest of this paper takes those two in turn.

Who Pays a Claim in Your Name

Medicare pays nurse practitioners directly, but not at the physician rate. To be covered, an NP must be a registered nurse authorized by the state to practice as an NP, be certified by a recognized national body and hold a master's or DNP degree, and the services must be of a type that would be physician's services if a physician provided them (Centers for Medicare & Medicaid Services [CMS], 2022). Payment is 80% of the lesser of the actual charge or 85% of what a physician would be paid under the Medicare Physician Fee Schedule (Centers for Medicare & Medicaid Services, 2013). So a visit billed in my own name brings in 15% less than the same visit billed by a physician.

Medicare also requires collaboration, but defines it by reference to state law. Where state law sets collaboration requirements, those apply; where it does not, collaboration is shown by the NP documenting their scope of practice and their relationships with physicians for problems outside it, and the collaborating physician need not be present or evaluate each patient (Centers for Medicare & Medicaid Services, 2022). For a 103 NP in California, whose statute requires a physician to practice in the same setting but not to supervise, the documentation route is the practical one.

Through Another Number or Your Own

There is a second route to payment, and it is where the money pressure lies. A service can be billed "incident to" a physician's service under the physician's number and paid at the full physician rate. The conditions are strict: the service must be an integral, although incidental, part of the physician's own professional service, of a type commonly furnished in a physician's office, and furnished under the physician's direct supervision, which in an office means the physician is present in the office suite (Centers for Medicare & Medicaid Services, 2022). In practice, that means the physician saw the patient first and set the plan of care, and the NP is following it.

The difference matters for my independence. A practice that bills my visits incident to a physician gains 15% on each visit but must keep a physician on site and keep me on the physician's plans of care, which is the supervised practice AB 890 was meant to move beyond. A practice that bills under my own number accepts the lower rate in exchange for my working on my own plans. The billing choice, not the license, decides which kind of practice I actually have. In our health center, the question is partly settled for us: Medicare and Medi-Cal pay federally qualified health centers a per-visit rate, and a visit with an NP generally counts as a billable visit in the same way as a visit with a physician, which removes the incentive to bill incident to.

The Committee No Statute Reaches

The third approval is the one I underestimated. Before I can see patients at the health center, its credentials committee must review my license, certification, education, references and malpractice history, and its governing body must grant me clinical privileges that list what I may do there. AB 890 made 103 and 104 NPs eligible for membership on an organized medical staff, subject to the bylaws and conflict-of-interest policies (California Business and Professions Code, 2025). Eligible is not entitled. Our bylaws still require every NP to practice under standardized procedures, and nothing in the statute obliges the medical staff to change that.

The statute does draw one line the committee cannot cross: a setting in which a 103 NP practices may not interfere with, control or direct the NP's professional judgment in a way prohibited by law. That protects clinical decisions, but it does not require the organization to grant any particular privilege, and it does not reach the terms of employment.

Federal Registration, Separately

Prescribing controlled substances requires one more approval, from a federal agency. The Drug Enforcement Administration registers practitioners to prescribe controlled substances only where state law authorizes them to do so, and registration is tied to the practitioner's state authority and practice location. When I move from standardized procedures to 103 status, the scope of my state authority changes, and my federal registration must reflect it before I can prescribe Schedule II drugs without a patient-specific protocol. That step is administrative, but a clinic that assumes the board certificate is enough could have an NP prescribing beyond what the federal registration covers.

Which One Would Stop Me First

Laid side by side, the three approvals rank clearly. The board certificate is predictable: meet the hours and the requirements, and it will be issued. Federal registration is a form. Payment is manageable in our setting because of how health centers are paid. The approval that would stop me first is the credentials committee, because it answers to our bylaws, not to the statute, and because it is controlled by the medical staff, the group whose state association opposed the law. If I want to practice as a 103 NP where I work, the document to change is the medical staff bylaws, and the people to persuade are the physicians who sit on the committee that amends them.

References

California Business and Professions Code, §§ 2837.103, 2837.104 (2025). https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=BPC&division=2.&chapter=6.&article=8.5.

Centers for Medicare & Medicaid Services. (2013). Medicare claims processing manual (Pub. 100-04), Chapter 12: Physicians/nonphysician practitioners, section 120. https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c12.pdf

Centers for Medicare & Medicaid Services. (2022). Medicare benefit policy manual (Pub. 100-02), Chapter 15: Covered medical and other health services, sections 60 and 200. https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/bp102c15.pdf