Using “Incident-to” Billing to Maximize Reimbursement for Non-Physician Clinical Services

Intent and Disclaimer

This article will identify how to properly report and get paid for clinical services provided by “auxiliary personnel” (as defined over time by CMS and related parties) using a physician’s provider number to Part B Medicare for fee-for-service (FFS) payments for non-institutional services. The article discusses slight differences with incident-to rules related to certain behavioral health services as well as summarizes unique details related to Rural Health Clinics (RHCs) and federally qualified health centers (FQHCs).

If you need formal legal assistance on incident-to issues as they relate to Medicare, please seek qualified counsel and advice. In addition, due to likely varying contractual requirements you may have with your commercial and Medicaid carriers, expect variations with Medicare’s approach and interpretations on incident-to as it is generally a Medicare-only term.

Incident-to Basics

According to CMS Publication 100-02, Medicare Benefit Policy Manual, Chapter 15, Section 60.1, in order to receive full FFS payment for office/outpatient services provided to Medicare Part B patients by non-physicians such as nurse practitioners (NP) and physician assistants (PA), the services must be “furnished as an integral, although incidental, part of the physician’s personal professional services in the course of diagnosis or treatment of an injury or illness.”

Items that serve as the core of incident-to billing compliance that may require additional research includes:

  1. The initial evaluation must be performed by the physician via a direct, personal, professional service. The provider reporting via incident-to must be “employed” via a W-2 or as an independent contractor.
  1. The physician documents that they are delegating varying specific portions of the care to the auxiliary personnel.
    • For established patients seen under incident-to rules, this includes the provider being personally involved (i.e., not via telemedicine or phone) with significant changes in the care plan and/or if there are new problems that may require ongoing diagnostic/therapeutic care. 
    • The Physician establishes internal clinical protocols of when the physician needs to be personally involved in changes to treatment plans or medication changes.
    • The physician must maintain their “active participation in and management of the course of treatment.”
    • The auxiliary staff must be performing within their state scope of licensure.
  1. The physician (or another physician of the same specialty) whose billing number will go on the claim must be immediately available via “direct supervision” in the office suite to render emergency assistance for medical services. 
    • “Direct supervision” essentially means being physically in the office suite and able to quickly provide immediate care themselves if needed and summoned via a loud voice or local announcement system. This means that the physician is not a floor above, not next door, and not solely available via telephone or pager. Some interpretations of “direct supervision” also include not depending on a supervising provider who, though they are in the office suite, is performing a procedure that can’t be interrupted on another patient.
    • Note that virtual direct supervision remains allowable under certain circumstances until the end of 2023 as per CMS’ final 2023 Medicare Physician Fee Schedule.
    • The auxiliary personnel should document which provider was immediately available during the incident-to service.

If all incident-to rules are not followed, the auxiliary medical staff seeing a patient should be reported to their Part B Medicare Administrative Contractor (MAC) using their own provider number and should expect to receive a 15 percent reduction in the FFS payment. Check with non-Medicare payers to see if there is any variation on the delegation and supervision of care as well as try to negotiate non-incident-to payment reductions.

Variations for Behavioral Health

As 0f 2023, CMS approved a change to 42 CFR 410.26 allowing mental health professionals such as licensed professional counselors to provide care under the general supervision of physicians or qualified non-physician practitioners, which includes clinical psychologists.  General supervision essentially means that the service is performed under the “direction and control” of the supervising provider but does not require their physical presence.

Variations in RHCs/FQHCs

Inherent in the federal statutes that determine the scope of services provided by Medicare Part B and HHS-approved RHCs and FQHCs is the basic premise that non-physician personnel often provide services without a physician even being on site during certain patient hours. Because these unique facilities do not get paid an FFS amount for most covered services, they do not use the traditional CMS1500/837p “provider” claim that requires the provider number of who actually performed the service, thus bringing incident-to issues into play. Many issues beyond incident-to are very different in RHCs and FQHCs, so use care when applying traditional FFS rules to these facilities.

Rather, they usually use the CMS1450/837i “institutional” claim form processed by Medicare Part A MACs and get paid an encounter rate (or “per diem”) called an All Inclusive Rate (for RHCs) and a Prospective Payment System (for FQHCs); in these cases, the provider number is not a required element of the claim. Unless meeting the three exceptions listed in CMS’s Benefits Policy Manual Chapter 13 Section 40.3, the entire institution is represented and paid on the claim even if multiples encounters were provided by the same or other providers. 

Incident-to issues specific to RHCs/FQHCs can be found in sections 120-160 of the RHC/FQHC Benefits Manual. RHCs/FQHCs can report the services of any authorized provider, including NPs/PAs/CNMs/CPs/CSWs; licensed professional counselors and licensed marriage and family counselors expected to be added to the list in 2024 (they were made authorized providers for FFS providers in 2023).

Summary

Incident-to is a valuable and complicated issue that requires knowledge of the Medicare guidelines, case law, possible state variations with Medicaid, managed care, and general commercial payers.  These non-Medicare payers may have more specific language in your participation agreements including specific details on who can provide direct supervision and which non-physicians can provide care even though meeting Medicare’s rules. 

Please ensure your compliance by reviewing these references and seek qualified counsel if you think there may be issues. If you meet these guidelines, it is possible to expand care using qualified non-physician staff without a payment reduction. Bottom line, if you are using the provider number of someone where the medical record will show they did not actually perform the service, use great care via gathering great knowledge on this ever-changing topic!

Key CMS References and other good articles