Seven Incident-to Billing Requirements
Incident to billing allows non-physician providers (NPPs) to report services “as if” they were performed by a physician. The advantage is that, under Medicare rules, covered services provided by NPPs typically are reimbursed at 85 percent of the fee schedule amount; whereas, services properly reported incident to are reimbursed at the full fee schedule value.
To realize the benefits of incident to billing, you must follow the rules precisely. There are seven basic incident-to requirements, as detailed in the Medicare Benefit Policy Manual, Chapter 15, Section 60.
1. Incident to billing applies only to Medicare; and, the incident-to billing does not apply to services with their own benefit category. Diagnostic tests, for example, are subject to their own coverage requirements. “Depending on the particular tests,” the Benefit Policy Manual explains, “the supervision requirement for diagnostic tests or other services may be more or less stringent than supervision requirements for services and supplies furnished incident to physician’s or other practitioner’s services.” Similarly, pneumococcal, influenza, and hepatitis B vaccines do not need to meet incident to requirements. MLN Matters Number: SE0441 elaborates:
Must a supervising physician be physically present when flu shots, EKGs, Laboratory tests, or X-rays are performed in an office setting in order to be billed as “incident to” services?
These services have their own statutory benefit categories and are subject to the rules applicable to their specific category. They are not “incident to” services and the “incident to” rules do not apply.
2. The service billed incident to must take place in a “noninstitutional setting,” which the Centers for Medicare & Medicaid Services (CMS) defines as “all settings other than a hospital or skilled nursing facility.”
Additionally, the Benefit Policy Manual allows, “Hospital services incident to physician’s or other practitioner’s services rendered to outpatients (including drugs and biologicals which are not usually self-administered by the patient), and partial hospitalization services incident to such services may also be covered.”
3. Incident to services cannot be rendered on the patient’s first visit, or if a change to the plan of care occurs. A Medicare-credentialed physician must initiate the patient’s care. If the patient has a new or worsened complaint, a physician must conduct an initial evaluation and management (E/M) service for that complaint, and must establish the diagnosis and plan of care.
4. Subsequent to the encounter during which the physician establishes at a diagnosis and initiates the plan of care, an NPP may provide follow-up care under the “direct supervision” of a qualified provider. Per the Benefit Policy Manual:
Direct supervision in the office setting does not mean that the physician must be present in the same room with his or her aide. However, the physician must be present in the office suite and immediately available to provide assistance and direction throughout the time the aide is performing services.
If auxiliary personnel perform services outside the office setting, e.g., in a patient’s home or in an institution (other than hospital or SNF), their services are covered incident to a physician’s service only if there is direct supervision by the physician [e.g., the physician must be physically present to oversee the care].
Any physician member of the group may be present in the office to supervise. The supervising physician does not have to be the physician who performed the initial patient evaluation.
5. A physician must “actively” participate in and manage the patient’s course of treatment. This requirement typically is defined by individual state licensure rules for physician supervision of NPPs.
6. Both the credentialed physician and the qualified NPP providing the incident to service must be employed by the group entity billing for the service. If the physician is a sole practitioner, the physician must employ the NPP.
7. The incident to service must be of a type usually performed in the office setting, and must be part of the normal course of treatment of a diagnosis or illness. The Benefit Policy Manual explains, “Where supplies are clearly of a type a physician is not expected to have on hand in his/her office or where services are of a type not considered medically appropriate to provide in the office setting, they would not be covered under the incident to provision.”
Documentation Must Establish Incident to Billing Requirements
Services meeting all of the above requirements may be billed under the supervising physician’s NPI, as if the physician personally performed the service. Documentation should detail who performed the service, and that a supervision physician was in the office suite at the time of the service. For example:
A general practitioner diagnoses a Medicare patient with hypertension and diabetes in January, and creates a plan of care. The patient returns for follow-up, in March, with the nurse practitioner. At the follow-up visit, the patient complains of knee pain. Although the physician is in the office, the nurse practitioner evaluates and treats the patient for the new problem.
In this case, if the nurse practitioner had evaluated only the hypertension and diabetes, for which there were an established diagnosis and plan of care, the service would meet incident to requirements. But because the physician did not personally perform the initial service for the patient’s new complaint of knee pain, the service may not be reported as incident to. Instead, the NP (if properly credentialed) would report the service to Medicare under his or her own provider ID.
Similarly, if a physician assistant sees Medicare patients in the office, while the physician is at the hospital making rounds, incident to billing is not appropriate because the requirement for direct supervision hasn’t been met (the physician must be physically present in the office suite).
Services delivered by auxiliary personnel incident to a physician’s services are coded normally, using standard CPT®, ICD-10-CM, and HCPCS codes, without additional modifiers, and are billed under the supervising physician’s provider ID. Although certain nonphysicians practitioners (NPPs) may bill Medicare independently for their services, those services generally are paid at a lesser rate (typically 85 percent of fee schedule); whereas, Medicare reimburses for services properly reported incident to at 100 percent of the fee schedule amount.
Additional rules apply for incident to billing of physician’s services in clinic, and services incident to a physician’s service to homebound patients under general physician supervision. These can be found in the Medicare Benefit Policy Manual, Chapter 15, Section 60.