Let’s Clarify How to Keep Incident-to from Becoming Incident-4
Part 2: Billing services incident-to the supervision of an NP or a PA.
Several readers have questioned the accuracy of the Ask the Legal Advisory Board article “Don’t Let Incident-to Turn into ‘Incident-4’ Billing” (May, page 42). Their concerns are based on the Centers for Medicare & Medicaid Services’ (CMS) MLN Matters® SE0441 containing the following note:
“Incident to” services are also relevant to services supervised by certain non-physician practitioners such as physician assistants, nurse practitioners, clinical nurse specialists, nurse midwives, or clinical psychologists. These services are subject to the same requirements as physician-supervised services. Remember that “incident services” supervised by non-physician practitioners are reimbursed at 85 percent of the physician fee schedule. For clarity’s sake, this article will refer to “physician” services as inclusive of non-physician practitioners.
Sort Through the Rules
In isolation, you may conclude (incorrectly) that non-physician practitioners (NPPs) such as nurse practitioners (NPs) and physician assistants (PAs) can initiate care and bill for services performed under their own supervision (alone) under the terms of the incident-to rule. Such a conclusion is contrary to the law (although the MLN Matters® article created unnecessary confusion). I hope the following — although esoteric — will help to sort the facts, and to demonstrate why interpretation of the law is best left to lawyers.
The incident-to concept has its genesis in the payment provisions of the Social Security Act (SSA) as follows:
(s) Medical and other health services
The term “medical and other health services” means any of the following items or services:
(1) physicians’ services;
(2)(A) services and supplies (including drugs and biologicals which are not usually self-administered by the patient) furnished as an incident to a physician’s professional service, of kinds which are commonly furnished in physicians’ offices and are commonly either rendered without charge or included in the physicians’ bills (or would have been so included but for the application of section 1395w-3b of this title);
— 42 U.S. Code §1395x(s)
Note that there is no provision in the SSA that permits any person who might otherwise qualify as “auxiliary personnel,” for purposes of the rule, to be supervised by an NPP, such that those services would be reportable under the name and National Provider Identifier (NPI) of the NPP.
Limitations of the Term “Physician”
Services performed by licensed or unlicensed assistants in compliance with the incident-to rule can be billed under the name and NPI of the physician who provides direct, on-premise supervision. This, however, does not extend to NPPs because the statute only provides authority for payment when such services are performed incident-to physician services. The term physician is defined in the SSA:
The term “physician,” when used in connection with the performance of any function or action, means (1) a doctor of medicine or osteopathy …, (2) a doctor of dental surgery or of dental medicine…, (3) a doctor of podiatric medicine …, (4) a doctor of optometry…, or (5) a chiropractor ….
— 42 U.S. Code §1395x(r) [emphasis added and statutory payment limitations pertaining to scope omitted]
Applying standard rules of statutory construction, you must conclude Congress — while providing a limited definition of physician, and not providing authority in the statute for payment of services performed incident-to the professional services of NPPs — did not intend for Medicare to pay for services that are integral, although incidental, to the services of an NPP. Although there are some exceptions (e.g., under the physical therapy payment rules), which are addressed in a separate rule, there is no general exception for “medical or other health services” performed by NPs or PAs.
Understanding the limitations of the term “physician,” now turn to the regulatory coverage requirements (42 CFR §410.10), as well as the regulatory expression of the incident-to rule (42 CFR §410.26).
Medicare coverage, from an incident-to perspective, is generally limited to:
(b) Services and supplies furnished incident to a physician’s professional services, of kinds that are commonly furnished in physicians’ offices and are commonly either furnished without charge or included in the physicians’ bills.
— 42 CFR §410.10(b) [emphasis added]
When you turn to the more detailed provisions found at §410.26(b)(2), you see the services reportable under the incident-to rule are generally limited to those which are integral, although incidental, to the service of a physician (or other practitioner). There are other requirements, as well.
Covered services and supplies are defined with reference to the statutory definition found at 42 U.S. Code §1395(x)(s)(2)(A), which is limited to those services furnished incident-to a physician’s service.
The incident-to rule also requires that services performed by “auxiliary personnel” must be those that auxiliary personnel are legally permitted to perform under the licensure rules of the supervising provider.
Finally, consider the definition of the term “practitioner,” found in §410.26(a)(6). Under that rule, “practitioner” means an NPP “who is authorized by the Act to receive payment for services incident to his or her own services.” [emphasis added]
Who Can Receive Payment
To determine who is authorized by the SSA to receive payment for services incident-to his or her own services, turn to the payment provisions of the SSA, and those found in the regulations. Note that the statutory expression of the incident-to rule does not address practitioners. The regulatory payment provisions pertaining to practitioners (PA, NP, certified registered nurse practitioner (CRNP), nurse midwife, etc.) merely define the payment amount, and only speaks in terms of the services performed by those individuals. The payment rules contain no language that expressly or impliedly authorizes payment for services performed incident-to their professional services (42 CFR §414.54-60).
You might point out that the regulatory provisions applicable to “coverage” of nurse practitioners services (as an example) would seem to permit incident-to billing as follows:
(d) Services and supplies incident to a nurse practitioners’ services. Medicare Part B covers services and supplies incident to the services of a nurse practitioner if the requirements of §410.26 are met.
— 42 CFR §410.75(d).
Unfortunately, note that such coverage is conditioned on compliance with 42 CFR §410.26. Remember that this rule has a number of important requirements, all of which must be met. For practitioners, the biggest concern is their authority to legally delegate the performance of services to auxiliary personnel. Note also that §410.26 requires supervision by a physician or a practitioner who is authorized under the payment provisions of the Act to receive payment for services performed incident-to their professional services. As aforementioned, there is no such payment authority where the practitioner is a PA, NP, clinical nurse specialist, CRNP, nurse midwife, etc.
When you turn to the Medicare Benefit Policy Manual, you can see the source of the confusion expressed by the MLN Matters® article on the subject. In the section of the manual, “Services and Supplies Furnished Incident To a Physician’s/NPP’s Professional Service,” CMS states:
For purposes of this section, physician means physician or other practitioner (physician, physician assistant, nurse practitioner, clinical nurse specialist, nurse midwife, and clinical psychologist) authorized by the Act to receive payment for services incident to his or her own services.
— Pub. 100-02, Medicare Benefit Policy Manual, chapter 15, §60 [emphasis added]
Note that CMS has replicated the regulatory language and, as is the case under the regulation, an NPP must be authorized by the SSA to receive payment for services performed incidental, although integral, to his or her own professional service. Unfortunately, the payment provisions applicable to PAs, NPs, etc., do not provide such authority.
Note: There are NPPs for whom such authority does exist. Licensed/certified physical therapist (PT) or occupational therapist (OT) assistants, for example, are auxiliary personnel who can perform services that are integral, although incidental, to a licensed PT’s/OT’s (as applicable) professional service. In such a case, a licensed PT develops a therapy care plan based on his or her physical therapy evaluation, which is then certified by a doctor of medicine/doctor of osteopathic medicine. The physical therapist assistant is then permitted under the payment regulations applicable to therapy services to provide the skilled therapy service under the direct on-premise supervision of the PT. In such a case, the service is billed under the name and NPI of the licensed PT. Unfortunately, similar authority does not clearly exist under the SSA for NPs/PAs.
Apply the Rules
The following scenarios explain the basis for the conclusions expressed in the prior article and illustrate how the rule works in practice.
Scenario 1: A physician performs the initial evaluation, determines a diagnosis, and develops the care plan. Either an NP/PA or auxiliary personnel perform subsequent follow-up services under the physician’s direct on-premise supervision.
In this case, assuming all other criteria under the incident-to rule are satisfied, the service can be reported under the name/NPI of the physician.
Scenario 2: A physician performs the initial evaluation, develops a diagnosis, and develops the care plan. Auxiliary personnel perform subsequent follow-up services. The physician, however, is not on the premises. Instead, an NP/PA supervises performance of the services by auxiliary personnel.
For this case — even if all other criteria under the incident-to rule were satisfied — the service cannot be legitimately reported under the name/NPI of the NP/PA. The most obvious reason is because the NP/PA did not initiate the care; therefore, the auxiliary person is not performing a service that is integral although incidental to the NP’s/PA’s professional service. As a result, the authority in the coverage rules for NPs/PAs, which are conditioned on compliance with §410.26, would not be satisfied.
Depending on your state, compliance with §410.26 requires that the auxiliary personnel are permitted under applicable licensure rules to perform the service under an NP’s/PA’s supervision. As delegation authority is not commonly found in most NP/PA licensure rules (and where it’s found, it’s extremely limited), it’s possible that such a delegation would not be permissible. As a result, the requirements of §410.26 would not be met.
Finally, consider that the express payment regulations, which are consistent with the statutory limitations of the incident-to rule, do not authorize payment to an NP/PA acting purely in a supervisory role.
Scenario 3: An NP/PA performs the initial evaluation, develops a diagnosis, and develops the care plan. Auxiliary personnel perform subsequent follow-up services under the NP’s/PA’s supervision.
In this case, determine whether the service actually performed by auxiliary personnel is a service that the NP/PA is permitted to delegate/supervise under his or her licensure rules. Assuming you surpass that hurdle, you still have the payment limitations of the SSA, which authorizes no payment for an NP/PA who is supervising a service performed by auxiliary personnel (understanding that the coverage rules suggest otherwise, at least superficially). As a result, do not bill such services under the name and NPI of the NP/PA.
Understand that Incident-to Is Confusing
If you are confused, don’t worry. As my mentor used to tell me (before I became a lawyer): This is just one of those issues that three years of law school will help you understand.
This is an extremely complex issue that requires very fact-specific analysis, on a case-by-case basis. Even ignoring the understandable conflict between the payment and coverage provisions of the SSA, there are a number of other substantial hurdles that preclude the simple conclusion that NP/PAs can bill for services performed incident-to their supervision. Such a broad assumption would be legally indefensible, and would lead to substantial compliance risk.
Michael D. Miscoe, JD, CPC, CASCC, CUC, CCPC, CPCO, CPMA, is the president-elect of AAPC’s National Advisory Board, serves on the AAPC Legal Advisory Board, and is the AAPC Ethics Committee chair. He has over 20 years’ experience in healthcare coding and over 16 years’ experience as a compliance expert, forensic coding expert, and consultant. Miscoe has provided expert analysis and testimony on coding and compliance issues in civil and criminal cases and his law practice concentrates on representing healthcare providers in post-payment audits and with responding to HIPAA OCR issues. He speaks on a national level, and is published in national publications on a variety of coding, compliance, and health law topics. Miscoe is a member and past president of the Johnstown, Pa., local chapter.