Billing a PA’s Services Incident to a Physician’s

Use midlevel providers to maximize productivity and reimbursement in your physician office.

Physician assistants (PAs) are a type of nonphysician practitioner (NPP) who may bill Medicare under their own national provider identifier (NPI). As of Jan. 1, 2022, PAs can bill and be reimbursed directly from Medicare where previously reimbursement could only be made to their employer. Other NPPs with billing rights include nurse practitioners (NPs), certified nurse midwives (CNMs), and clinical nurse specialists (CNSs). If you have any of these midlevel providers in your physician office, you need to be familiar with Medicare policy for billing midlevel services.

For example, Medicare will pay an NPP to see a patient independently if the services are allowable under their scope of practice as defined by their state’s laws. When an NPP sees a patient independently, their services are paid at 80 percent of the lesser of the actual charge or at 85 percent of the physician’s rate set under the Medicare Physician Fee Schedule (MPFS).

Is there a way to be paid more for an NPP’s services? Potentially, yes, but you must follow Medicare’s incident-to guidelines to the letter. The incident-to policy allows services performed by an NPP to be billed under the supervising physician’s NPI and paid at 100 percent of the charge under the MPFS.

Medicare has six main provisions for incident-to billing. Let’s look at these rules closely.

Rule 1

The NPP’s services must be an integral part of the patient’s normal treatment under a treatment plan that was initiated by the patient’s primary provider. The patient’s primary provider who is supervising the midlevel provider must remain actively involved in the care of the patient.

The supervising physician must have created the treatment plan for the condition being treated. This means that the patient must be established to the practice. If the patient is new to the practice, the midlevel provider can see and treat the patient (in accordance with state regulations). However, the services must be billed underneath the NPP’s NPI since the patient is new and the supervising provider has not yet created a treatment plan.

Rule 2

The services performed are commonly provided without charge or included in the physician’s or other listed practitioner’s bill.

The services may be covered under the incident-to guidelines if they are not covered under a different benefit category under Medicare. Services, such as diagnostic testing and vaccines, fall under a separate benefit category for Medicare. Services with their own benefit category must be billed directly by the performing provider.

Rule 3

The services provided must represent an expense to the physician under whom the services are billed.

The services must be billable or represent something for which the practice pays. If you are getting the service or the supply for free, you cannot pass the expense off to the insurance carrier. The midlevel provider employed by the practice represents an expense to the practice and, therefore, is permitted to bill services incident to the provider. If they are a free resource, or if they are employed by a group other than the practice (e.g., a midlevel provider who is employed by the hospital and placed in a physician practice), they do not qualify for incident-to billing.

Rule 4

The services must be commonly provided in the physician’s office or clinic.

Services must be performed in the physician office or clinic and not in an institutional setting. If the office or clinic is part of the outpatient clinic at the hospital, whether on campus (POS 22) or off campus (POS 19), incident-to rules do not apply. Additionally, services performed in the emergency department (POS 23) are not covered as incident-to services. Services in these settings fall into a different category of benefits called split/shared services. (See Healthcare Business Monthly, November 2022, for a detailed discussion of split/shared services.)

Further, if your provider sees patients in a nursing facility/skilled nursing facility (NF/SNF), those services may count as incident to if the provider has a specific office space at the facility. If services are provided outside of their specifically designated office space, the services are not billable under the incident-to guidelines and instead fall into the NF/SNF payment rules.

Rule 5

The physician provides direct incident-to services supervision and only the physician who supervises the incident-to services may bill them.

Medicare has specific rules and levels of supervision under which all procedures fall. These levels of supervision are general, direct, and personal supervision. Details about the levels of supervision can be found in the Internet Only Manual, Benefit Policy Manual, Chapter 15, Section 30:

• General Supervision – Services are performed under the physician’s general direction and control, but the provider does not need to be in the room during the procedure.
• Direct Supervision – The definition of direct supervision changes based on the location where the services occur; however, for incident-to services, which are only permitted in an office-based setting, direct supervision means that the supervising physician must be within the walls of the office suite and immediately available to assist if necessary. If the provider is not in the office suite while the services are being rendered, the services cannot be billed as incident to; they must be billed under the midlevel’s NPI.
• Personal Supervision – The supervising physician must be in the room while the procedure is being performed.

Under the incident-to rules, the services must be performed under direct supervision. If the provider is, for example, out of the office and available by phone for consultation, this does not meet the definition of direct supervision and would not qualify the PA’s services as being billed incident to the physician’s services.

Under audit, one of the key pieces of information requested from a carrier will be both the midlevel’s schedule and the supervising provider’s schedule. It would be expected that the provider who is supervising has patients on the schedule on the same date of service. An auditor may request examples of the provider’s presence in the office such as workstation login history for the date(s) in question. A co-signature of the supervising physician is not a requirement, but you may request it as a means of verifying the physician’s availability for oversight.

Rule 6

Medicare requires general physician supervision when clinical staff provides services under incident-to provisions for transitional care management (TCM) and chronic care management (CCM). Only the supervising physician or other listed provider may bill services and supplies incident to TCM and CCM services.

This section of the rule also confirms that ancillary staff, such as medical assistants, can perform portions of the TCM or CCM services, and those services are billable under the supervising provider.

Reference our decision tree to visually walk through the steps for determining when incident-to rules apply.

Examples of When You Can and Can’t Bill Incident-to Services

Now that we have walked through the rules, let’s look at some examples for when it is or isn’t appropriate to bill incident-to services.

Example 1

An established patient, Susie, comes into the office for follow-up on her hypertension. She shares her home blood pressure readings with the PA. The PA notes that her home readings are still running high and her blood pressure in the office today is 150/90. Based on the plan of care noted by the primary care physician (PCP), the PA increases her dose of lisinopril and asks the patient to follow up next month.

The provider established that if the patient’s blood pressure continued to be high, the medication should be titrated up. This would qualify for billing the service incident to under the supervising physician’s billing number as long as the supervising provider was in the clinic during the visit.

Example 2

Susie returns to the office one month later and sees the PA again. Today, her blood pressure is under better control. The increased dose of lisinopril seems to be adequate. Susie tells the PA that she is having difficulty obtaining her diabetes medication and asks if there is anything else that she can use. The PA discusses the situation with the PCP via phone, who agrees to a change in the diabetes medication. The PA writes a new prescription and asks the patient to follow up in a month.

There is a change to the medication made by the PA. The PCP was on the phone and not in the clinic at the time, so this visit is not billable as incident to. Even if the PCP was in the clinic, they did not see the patient and personally make the change. Further, if the PCP was in the clinic, a “hallway consult” between the providers does not satisfy the requirements for incident-to billing, and this visit must be billed under the PA.

Example 3

An established patient comes to the office today after sustaining a fall down a flight of stairs over the weekend. He was treated in the emergency department and told to follow up with his PCP. He comes to the office today complaining of shoulder and hip pain from the fall. The PA orders an immediate CT scan and will see the patient again in the morning.

While the patient is established to the practice, this is a new problem being treated. This would not qualify for incident-to billing and should be billed under the PA.

Don’t Forget the Payer’s Policy

Check with your Medicare Administrative Contractor (MAC) to determine if they have any additional guidance regarding billing services under the incident-to benefit. For example, WPS Government Health Administrators posted on their website on Feb. 24, 2022, the following guidance (updated Feb. 15, 2023):

We identified a Medicare vulnerability relating to “incident to” services paid under the Medicare Physician Fee Schedule (MPFS). We ask anyone billing “incident to” under the MPFS to complete a self-audit verifying services meet the Medicare rules.

Medicare allows “incident to” services for both a physician and nonphysician practitioner (NPP). The basis for both types of payment is the MPFS. Medicare allows physicians’ services at 100% of the MPFS, while it allows most NPPs’ services at 85% of the MPFS. When a service pays to the physician but should pay to the NPP, you owe Medicare a refund.

If you bill MPFS “incident to” services, complete a self-audit to confirm all the following apply:

• Billing is under the correct provider
• It meets the “incident to” requirements
• Documentation meets Medicare’s signature requirement

Note: You must meet all “incident to” requirements in the Internet-Only Manuals (IOMs) and Code of Federal Regulation (CFR).

If you identify a billing error, complete an Overpayment Claim Adjustment (OCA) or a voluntary refund. Once the claim is adjusted, resubmit the claim correctly.

This notice from one MAC highlights the importance of ensuring that your office handles all billing for midlevel providers correctly.

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Authors:

AAPC Documentation Advisory Committee: Melissa Kirshner, MPH, CPC, CDEO, CRC, CFPC, CPMA, COBGC, AAPC Approved Instructor, AAPC Fellow; Chelsea Kemp, RHIA, CCS, COC, CPC, CPCO, CDEO, CPMA, CRC, CCC, CEDC, CGIC, AAPC Approved Instructor; Kelly Shew RHIA, CPC, CPCO, CDEO, CPB, CPMA, CPPM, CRC, CEMC, AAPC Approved Instructor; Julie Davis CPC, CRC, COC, CPMA, CPCO, CDEO, AAPC Approved Instructor; Elizabeth Herbert RHIA, CPC, CPMA, CCC, CRC, AAPC Approved Instructor

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Resources:

Internet Only Medicare Claims Processing Manual, Chapter 12, Section 30.6.4

MLN901623 – Advanced Practice Registered Nurses, Anesthesiologist Assistants, & Physician Assistants (cms.gov)