Running Head: NNP Group 2: Financial Analysis
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NNP Group 2: Financial Analysis
_________________________________________
Presented to
Debra Armentrout, PhD, MSN, RN, NNP-BC
THE UNIVERSITY OF TEXAS
SCHOOL OF NURSING AT GALVESTON
_________________________________________
In Partial Fulfillment
Of the Requirements for the Course
GNRS 5350: Nurse Practitioner – Professional Roles & Business Practices
___________________________________
By
Tracey Causer, Katie Lawton, Gabriela Olivas, Ashley Robson
July 20th, 2014
Running Head: NNP Group 2: Financial Analysis
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NNP Group 2: Financial Analysis
In this paper, we will be exploring the financial analysis of a healthy, uncomplicated, preterm, 28week gestation female infant over a ten week course-of-stay in the Neonatal Intensive Care Unit (NICU).
The various costs associated with the care of this infant will be analyzed. We will also discuss what is
charged versus what is actually reimbursed. The analysis will also explore whether it is feasible and
profitable for a Neonatal Nurse Practitioner (NNP) to bill independently for the charges incurred rather than
bill under the collaborating physician.
Breakdown of Charges/Explanation of Charges
ICD-9, CPT and Diagnoses
Charges for the NICU are verified using ICD-9 diagnostic codes. ICD-9, or International
Classification of Diseases, is a code system used to describe patient’s signs, symptoms, injuries, disease
and conditions (UFHealth, 2014). These codes facilitate billing so it is imperative that the nurse practitioner
have correct documentation on his/her patients to support charges billed in order to be properly
reimbursed. The correlation between ICD-9 codes and CPT codes is in reference to medical billing and
reimbursement. CPT, or Current Procedural Terminology, is used to identify the medical, surgical,
radiology, laboratory, anesthesiology, and evaluation/management services provided by the health care
professionals and the hospital (UFHealth, 2014). For a hospital to receive reimbursement from government
and insurance agencies, every CPT code billed must correspond with an appropriate ICD-9 code to ensure
it was medically necessary for the patient and their condition. If these codes don’t correlate together, the
hospital is not reimbursed for the services or supplies provided. The diagnoses listed in Chart A will justify
the expenditures for the purpose of this analysis.
Running Head: NNP Group 2: Financial Analysis
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Chart A: Diagnoses & ICD-9 codes for an uncomplicated 28 week neonate
Preterm 28 weeks
(765.24)
Primary Apnea of Prematurity
(770.81)
Anemia of Prematurity
(776.6)
Observation &
Evaluation of
Newborn of Sepsis
(V29.0)
Pulmonary
Insufficiency (518.82)
Respiratory Distress
Syndrome
(769.0)
Patent Ductus
Arteriosus (747.0)
Unspecified Fetal and
Neonatal Jaundice
(774.6)
Feeding Problems of the
Newborn (779.31)
Salary Information
Table 1 represent`s the staff involved in the care of the 28 week infant over the ten week course-ofstay in the NICU. It ranges from the Neonatologist to the Equipment tech. The respiratory therapist is only
involved in the patient’s care until the neonate reached 32 weeks post conceptual age, when respiratory
support is no longer needed. The occupational therapist is involved with the patient from admission by
addressing development positioning to oral motor stimulation once the patient starts to feed. The
equipment tech is involved in the care by continuous restocking the patient`s needed supplies. The staff
salaries may not be directly billed but are included in the total cost to provide care.
Admission Charges
Charges for this patient begin at birth. This patient was born via C-Section. Initial charges begin
with delivery attendance to stabilize the neonate and admission to the NICU. The patient was intubated on
two occasions to receive surfactant. He did not need to remain intubated, so he is initially placed on nasal
CPAP. A chest x-ray was obtained on admission to evaluate lung fields related to prematurity. The
neonate will need long-term IV access for nutrition so an umbilical venous line was placed. The vein
hydration charge is for the initial 30-60 minutes of fluids given to stabilize the neonate. The umbilical arterial
catheter is placed for the purpose of monitoring the patient’s blood pressure (Gomella, Cunningham, &
Eyal, 2013). Table 2 represents the cost of admission as well as reimbursement for the items billed.
Running Head: NNP Group 2: Financial Analysis
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Level II & Level III Bed Charges
The neonate will be staying the in the NICU and the NICU consists of varying levels of care. Due to
the fact this is an uncomplicated 28-week neonate, his stay in level III nursery will be three weeks and the
other seven weeks will be in the less acute level II nursery. The information in Table 3 represents the bed
charges for the stay per day in each of these levels. The charges for level III/ level II in the NICU incurred
the following CPT codes, as shown in table 4.
Modes of Respiratory Support
Initially the neonate is intubated for surfactant administration. The remainder of the hospital stay,
the neonate only requires nasal CPAP x 14 days, then NC at 2 L/min which was eventually weaned to I
L/min, until he was on room air by DOL 28. Table 5 illustrates the costs associated with these modes of
respiratory support.
Medications, IV Fluids and Enteral Feedings
From admission to discharge, a 28-week infant will need several medications, IV fluids and enteral
feedings. Immediately after delivery, the infant will need a dose of surfactant due to surfactant deficiency
administered through the endotracheal tube. Within the first 2 hours of life, the infant will need vitamin K to
prevent neonatal hemorrhage and erythromycin for eye prophylaxis. After the initial septic work-up, the
infant will need to be on broad spectrum antibiotics due to increased susceptibility for infection until lab
results reveal otherwise. The infant would be given ampicillin every 12 hours IV for 72 hours and
gentamicin IV daily for 72 hours. Since the infant was born at 28 weeks, the infant is at risk for apnea of
prematurity and will need caffeine daily to prevent apnea episodes. While working on increasing enteral
feedings the infant will need parenteral nutrition of TPN and IL. Starter TPN will begin after admission and
TPN will continue until DOL 6 when the infant is on 80 mL/kg/day of feedings. The infant will be started on
EBM on DOL 2 at 10 mL/kg/day, and increase daily until DOL 10, when the infant will be on 150 mL/kg/day.
When the infant reaches 100 mL/kg/day, human milk fortifier will be added to the EBM, until the infant
Running Head: NNP Group 2: Financial Analysis
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reaches 34 weeks. At 80 mL/kg/day of enteral feedings, we would start multivitamins and iron. Once the
infant weighs at least 2 kg the infant will need Hepatitis B vaccine, and because the infant will be 2 months
old prior to discharge 2 month vaccines will be given. These include DTaP, Hib, IPV and PCV. Table 6
illustrates the cost of these medications.
Lab Work
Over the course of 10 weeks, the infant will require labs to analyze blood to evaluate blood
components, serum chemistries, oxygenation status and infection. We would expect a 28-week infant, with
an uncomplicated course, to have a complete blood count (CBC) with differential upon admission and every
morning, for the first three days of life. While the infant is on parenteral nutrition, we would continue to
monitor the serum chemistries, after the first 24 hours of life and every morning. By day of life 6, the infant
would be on 80 mL/kg/day of enteral feeds and I would discontinue the IV fluids. After the first 24 hours of
life, the infant will need a total serum bilirubin (TSB) to evaluated bilirubin and a newborn screen.
Triglyceride levels are ordered to assess the infant’s tolerance to intralipids. With a sepsis evaluation, the
patient would need a blood culture obtained, as well. Finally, Hgb/Hct with retic are ordered to assess for
anemia. Table 7 illustrates the total cost for laboratory studies for this patient post admission. Chemstrips
are ordered to assess for hypoglycemia or hyperglycemia in the neonate (Gomella et al., 2013).
Supplies
Over the course of the 10 weeks, various supplies will be used for the infant’s care from diapers,
wipes, IV flushes, IV tubing, and feedings supplies. On a daily inquiry, the infant would approximately use 8
diapers/day and a box wipes/week. While increasing the infant’s feeds, the infant will remain on IV fluids.
We expect the infant, over the 6 days of need for IV fluids to need 6-8 IV flushes/day and one set of IV
tubing every 4 days. Prior to taking all PO feeds, the infant will need supplies for gavage feeding.
Throughout the hospital stay, we expect the infant to need 3 NG feeding tubes, and 7 feeding connectiontubing sets per day. Table 8 illustrates the total cost for supplies for this patient post admission.
Running Head: NNP Group 2: Financial Analysis
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Radiological Studies
Since the infant has been declared to have an uncomplicated course, I would expect the infant to
only need 1 x-ray at admission. The infant will need a head ultrasound to assess for intracranial
hemorrhage due to <30 weeks. Table 9 illustrates the cost for head ultrasound.
Phototherapy
Premature infants have an higher risk for hyperbilirubinemia because they have susceptibility to
infection and have decreased amount of serum albumin, than in the term infant (Gomella et al., 2013). For
a 28-week infant, with an uncomplicated case, we would expect the infant will need phototherapy by DOL 4
and be completed with therapy by DOL 6. Table 10 illustrates the total cost for phototherapy for this patient
post admission.
ROP
Throughout the 10 weeks, a 28-week infant may need to undergo various procedures and
interventions to assess for complications associated with prematurity. In the 28 week infant, exposure to
increased oxygen support can lead to retinal detachment and blindness. Infants born prior to 30 weeks
gestation and weight <1500 grams that have required cardiopulmonary support are at an increased risk for
ROP (AAP, 2013). Based on the initial exam, the stage and occurrence of ROP identifies the schedule for
follow-ups. For an ROP exam, the infant would be billed for ROP exam completed by optometrist, the eye
kit and medications used in the exam. For the 28-week infant, we would expect the infant to receive to 2
ROP screens. Table 11 illustrates the total cost for ROP screens for this patient post admission.
Reimbursement
Medicaid is one resource for reimbursement for NNP services. Medicaid is funded by the federal
government but governed by state programs. As nurse practitioners, we are considered the primary care
provider, and need legislation in place for reimbursement. Although we have been considered the primary
care provider under the fee for service system since 1990, legislation is needed to facilitate the proper
Running Head: NNP Group 2: Financial Analysis
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functions of practitioners. The Balanced Budget Act of 1997 has some misleading wording that inhibits the
amount of healthcare for the vulnerable population. However, practitioners have been found to be
extremely valuable, as a resource for state Medicaid fee for service (AANP, 2013). The changes that need
to be made in the Federal Medicaid laws are: 1) Fee-for-fee service Medicaid to include direct payment,
recognize all practitioners as primary case managers, and require NPs, CNSs, and CNMs to be included in
Medicare managed care (ANA, 2013). Through the Collaboration of the Centers for Medicare and Medicaid
Services (CMS), the goal is to have increased payments to primary care case managers. The Center for
Medicare and Medicaid Services has an improving infant and maternal health campaign that can lead to
long term decreased health care cost.
Under Medicaid, there is a Provider Statistical and Reimbursement System (PS&R) that is helpful
for institutional healthcare providers. This system puts together reimbursement data applicable to the
finalized Medicare Part A claims, and providers may access their own Provider Summary reports by
PS&R.(CMS, 2014).Medicaid coverage varies from state to state according to requirements. The payment
is usually lower than through insurance. On average, reimbursement is 50-55% of billable charges.
Private Insurance
Private insurance is also a source for reimbursement. Insurance plan carriers include: Blue Cross
Blue Shield, Aetna, Prudential, and Metropolitan, and others. The traditional fee-for-fee service provided by
private insurance companies functions to reimburse providers for patient charges. Similar to Medicaid
reimbursement, private insurance reimbursement varies from state to state. Advanced Practice Nurses
should contact each insurance company for credentialing and reimbursement protocols.
Summary: Ease or Difficulty of Success in Independent NNP Practice
Although the NNP is established as a key primary care provider, issues surrounding variances in
the view of the role/independence of the NP, as well as variances in payer/reimbursement policies, affect
the ability to bill for NNP services independently at this time.
Running Head: NNP Group 2: Financial Analysis
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Variances Surrounding the NNP as an Independent Provider
Differences in the opinions of governing authorities regarding independent practice by NNPs for
billable services affect reimbursement policies. Texas Medicaid rules do not currently require supervision
by a physician for service reimbursement but specify that NP perform only services within the scope of
practice regulated by the State Board of Nurse Examiners and Texas state law (Texas Medical Association,
2014). However, the American Academy of Pediatrics (2009) holds the opinion that care provided by a
NNP within the neonatal intensive care unit (NICU) should be supervised by a neonatologist. Scope of
practice for advanced practice nurses varies widely from state to state and duties vary from institution to
institution. The National Association of Neonatal Nurse Practitioners (NANNP) holds that because state
licensure regulations are variable, the NNP practices independently in collaboration with or under a
neonatologist’s supervision (2012). Because neonatal patients are cared for within inpatient hospital units
and practitioners sometimes work within physician groups, relationships within these institutions may
govern their practice and ability to bill for services independently. Although collaborative agreements and
prescriptive authority agreements exist in some states, NNPs almost invariably work as employees within
the acute care NICU hospital setting under the supervision of a neonatologist. Variances in opinion of the
NNP and their role as independent practitioners make it difficult to regulate practice standards for advanced
practice nurses and establish billing for service reimbursement policies with payers.
Billing Issues Specific to the NNP
In addition to the billing practices mentioned above, many variables affect billing and/or profitability
for NNPs. For instance, in order to bill Medicaid for services, a NNP must first be enrolled, credentialed,
and issued a provider number to bill under. When billing commercial insurance plans, some carriers have a
credentialing process while others require billing under the physician’s name and provider number.
Although Medicaid provides reimbursement to employed and self-employed NPs, commercial carriers may
require the NNP to be employed under a physician for reimbursement. Medicaid stipulates that the service
Running Head: NNP Group 2: Financial Analysis
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provided and submitted for reimbursement cannot be just one part of a bundled service. For instance,
services such as delivery, rounding, initiating transfers and writing transfer orders are part of bundled
services and are not billable separately. Most payers will only pay 1 charge per day, per patient, per
specialty, for evaluation/management, meaning that only one charge for Neonatology can be recovered,
however, it is permissible to bill “shared” visits with physicians when the practitioner sees the hospital
inpatient in the morning, and the physician follows with a face-to-face visit later that day. Medicaid typically
reimburses 92% of the reimbursement made to physicians and commercial insurance reimbursement
percentages vary from carrier to carrier, but average 85% (Buppert, 2009). Also, claims can be returned if
any requirements for payment are unmet. Claims may have to be resubmitted; with additional cost.
Outsourcing, defined as the strategic use of outside resources for billing services, may be beneficial for
reducing unnecessary inefficiencies and increasing reimbursements, but also adds another degree of cost
to the cost/reimbursement equation (Mackey, 2004).
Feasibility of NNP Independent Practice and Billing
When considering our financial analysis for this 28 -week infant, it appears that most payer
reimbursement would be recovered by the hospital and physicians in the NICU, as bundled services
payments. The NNP, if able to bill for some services independently, would not profit much, if at all, after
adjusting for other costs. However, the ability by physicians and hospitals to bill for services provided by
NNPs does bring added value to the role and may be necessary for survival of the role in the future.
In today’s healthcare environment, NNPs must not only be competent providers of care but must
also understand the concepts of the APRN role, Medicaid and other insurance policy regulation,
credentialing processes, and the use of CPT/ICD-9 codes for reimbursement. Additionally, pursuing
reimbursement for Advanced Practice Nursing services may well be necessary for the survival of the role in
the future, and practitioners must make themselves knowledgeable regarding legislative requirements.
Running Head: NNP Group 2: Financial Analysis
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References
American Association of Nurse Practitioners. (2013). Medicaid. Retrieved from
http://www.aanp.org/legislation-regulation/federal-legislation/Medicaid
American Academy of Pediatrics. (2009). Advanced practice in neonatal nursing. Pediatrics, 123(6), 16061607, Retrieved from http://pediatrics.aappublications.org/content/123/6/1606.full.pdf+html,
doi:10.1542/peds.2009-0867
American Academy of Pediatrics. (2013). Screening examination of premature infants retinopathy of
prematurity. Retrieved from http://pediatrics.aappublications.org/content/131/1/189.full.
American Nurses Association, (2013). ANA factsheet on medicaid reimbursement. Retrieved from
http://www.nursingworld.org/DocumentVault/GOVA/Federal/FederalIssues/MedicaidReimburseme
nt%20.aspx
Buppart, C. (2009). Billing issues for nurse practitioners who provide inpatient services. Medscape.
Retrieved from http://www.medscape.com/viewarticle/705683.htm
Centers for Medicare and Medicaid Services. (2014). Provider statistical & reimbursement report. Retrieved
from https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-andReports/PSRR/index.html?redirect=/PSRR/
Dayton Children’s Hospital. (2014). Pricing. Retrieved from http://www.childrensdayton.org
/cms/site/pricing/index.html
Fair Health Consumer Cost Lookup [FHCCL]. (2014). Fair health. Retrieved from
http://fairhealthconsumer.org/medical_cost.php
Gomella, T. L, Cunningham, M. D. & Eyal, F. G. (2013). Neonatology: Management, procedures, on-call
problems, diseases and drugs (7th Ed.). New York: McGraw Hill Education
Hanson, C. M., & Bennett, S. D. (2014). Business planning and reimbursement. In A. B. Hamric, J. A.
Spross, & C. M. Hanson. (Eds.). Advanced nursing practice: an integrative approach (5th ed., pp.
Running Head: NNP Group 2: Financial Analysis
505 - 537). St. Louis: Elsevier-Saunders.
Mackey, T. A. (2004). Outsourcing issues for nurse practitioner practices. Nursing Economics, 22(1),
Retrieved at http://medscape.com/viewarticle/470005
National Association of Neonatal Nurse Practitioners. (2013). Position Statement #3058: Neonatal Nurse
Practitioner Workforce. Retrieved from
http://www.nann.org/uploads/NNP_Workforce_Position_Statement_01.22.13_FINAL.pdf
Texas Medical Association. (2014). At a glance billing guidelines. Retrieved from
http://www.texmed.org/Template.aspx?id=2273
UFHealth (2014). What is a CPT code? Procedural and diagnosis coding must be linked by medical
necessity. Retrieved from http://compliance.med.ufl.edu.compliance-tips/what-is-a-cpt-code/
11
Running Head: NNP Group 2: Financial Analysis
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Tables
Table 1 Costs of staff related to 28 week infant stay in the NICU
Employee
Neonatologist
Neonatal Nurse
Practitioner
Registered Nurse
Respiratory
Therapist
Occupational
Therapist
Equipment Tech
Hourly Wage
$72.00
$45.00
Hours per Day
24
24
Days Used
70
70
Total Cost
$120,960
$75,600
$35.00
24
70
$58,800
$32.00
24
28
$21,504
$35.00
1
46
$1575
$15
1
70
$1050
TOTAL
$279,489.00
Table 2 Costs associated with admission into NICU (FHCCL, 2014)
Admission related charge
CPT Code
Attending at delivery &1st stabilization of newborn
99464
Total Estimated
Charge
$76.95
Critical Care Evaluation & Management
99291
$250.09
Initial Inpatient Critical Care per day 28 days<
99468
$1137.20
Intubation, Endotracheal, Emergency Procedure
31500
Intrapulmonary Surfactant Administration
94610
Chest X-Ray frontal
Umbilical Artery Catherization
Umbilical Vein Catheterization
Abdomen X-Ray
Blood Gas
Vein Hydration first 30-60 minutes
Continuous Pulse Oximetry
71010
36606
36510
74000
82803
96630
94760
$121.84 𝑥 2
= $243.68
$74.60 𝑥 2
= $149.20
$30.42
$675.00
$625.00
$48.00
$32.00
$180.00
$66.00 x 70 days
= $4620.00
Total Charges:
$8067.54
Table 3 Charges for Total Stay in the NICU
Level of Care in
NICU
Level III
Level II
Total
Total days
21
49
Cost per day
$4160.00
$3145.00
Total Cost
$87,360.00
$154,105.00
$241,465.00
Running Head: NNP Group 2: Financial Analysis
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Table 4 CPT codes related to a 28 week neonates NICU stay
CPT related
charge
NICU Daily<28
days of age
NICU Daily > 29
days of age
Discharge
Discharge Hearing
Screen
CPT Code
Amount of Days
Cost per day
99469
27
$2150.00
Total Estimated
Charge
$58,050.00
99465
42
$1540.00
$6468.00
1
$189.00
$24.99
$189.00
$24.99
99238
92551
1
Total Cost
$64,731.99
Table 5 Cost of Modes of Respiratory Support for a 28 week Neonate (Dayton Children’s Hospital, 2014)
Respiratory
Method of
Support
NCPAP
Nasal Cannula
TOTAL:
Cost per day
Day on support
$695.00
$101.00
14
14
Total Cost
$9730.00
$1414.00
$11,144.00
Table 6 Cost of Total Medications for a 28 week Neonate
Unit
Cost
Starter TPN
TPN
Intralipids
Surfactant
Vitamin K
Erythromycin
Ampicillin
Gentamicin
Caffeine
MV/Fe
Hepatitis B
Hib, DTaP, IPV,
PCV
Prolacta
$500.00
$750.00
$50.00
$75.00
$52.00
$47.00
$7.50
$3.16
$3.20
$13.00
$11.00
$164.00
$115.00
Quantity ordered
during NICU stay
1
5
5
2
1
1
6
3
42
1
1
1
18
Total Cost
$500.00
$3750.00
$250.00
$150.00
$ 52.00
$47.00
$45.00
$9.48
$134.40
$13.00
$11.00
$164.00
$2070.00
Table 7 Total Laboratory Cost for a 28 week neonate NICU stay (FHCCL, 2014)
Laboratory Test
CBC with
differential
Basic Metabolic
Panel
Newborn Screen
CPT Code
Cost
85025
$37.00
Quantity ordered
during NICU stay
4
Total Cost
80048
$53.00
4
$212.00
83788
$40.00
2
$80.00
$148.00
Running Head: NNP Group 2: Financial Analysis
Total Serum
Bilirubin
Triglycerides
Arterial Blood
Culture
Chem Strips
Hematocrit
Retic Count
Total Cost
14
82247
$27.00
5
$135.00
84478
87040
$39.50
$65.00
3
1
$118.50
$65.00
82948
85014
85049
$20.00
$35.00
$35.00
10
8
4
$200.00
$280.00
$140.00
$1481.50
Table 8 Total Supplies Cost during 28 week NICU Stay
Table 9 Total Cost for Radiological Studies
Test
Each Cost
Diapers
Wipes
IV start kits
IV flushes
IV tubing
NG tubes
Feeding Tubes
Total Cost
$1.50
$2.00
$6.00
$1.25
$15.00
$0.52
$1.50
Charge to Patient
$44.00
$20.00
$18.00
$54.00
$30.00
$1.56
$84.00
$251.56
Radiological Procedure
Head Ultrasound
Total Cost
Cost for patient
$370.00
$370.00
Table 10 Total Cost for Phototherapy in 28 week neonate stay
Test
Cost per Day
Charge to Patient
Phototherapy
Phototherapy Eye Shield
Total Cost
$112.00/day
$336.00
$3.75
$339.75
Table 11 Total Cost for ROP in 28 week neonate stay
Test
Cost/Test
Charge to Patient
ROP exam
ROP examination kit
Cyclomydril
Proparacaine
Total Cost
$66.00
$53.00
$270.00
$9.00
$132.00
$106.00
$27.00
$9.00
$274.00