Demystifying Medicare's 'incident to' billing by nurse practitioners, physician assistants

Renee Stantz

Q: I am one of several specialist physicians who recently joined a large hospital organization.
We use our midlevels extensively, both in the hospital and the office. Some are on staff at the hospital and are normally the first to see our patients. Our physicians then see the patients during rounding, document that they agree with the midlevel’s findings, and sign off on the note. We bill these visits under the physician’s Provider Identification Number (PIN). Is this correct? We utilize our PAs in a similar fashion in the office. They initiate the visits for new and established patients, document the visits and write the plans of care. The physician then sees the patient and signs off on the plan of care. We have been told by our new organization’s compliance team that we are not billing these visits appropriately. How should we bill them?

A: Let’s delve into incident-to guidelines first. Incident-to billing is a way of billing outpatient services (rendered in a physician’s office located in a separate office or in an institution, or in a patient’s home) provided by a non-physician practitioner (NPP) such as a nurse practitioner (NP), physician assistant (PA), clinical nurse specialist, certified nurse midwife, clinical psychologist, clinical social worker, physical therapist, or occupational therapist.

NPPs have their own benefit category and may provide services without direct physician supervision. They can bill directly for services and incident-to a physician’s services, if they are licensed by their state to assist perform the services.

Billing under a physician’s PIN

According to the Center for Medicare and Medicaid Services (CMS) National Coverage Provision for incident-to services, when NPPs provide services that are incident-to a physician or other practitioner’s service, they may bill under the physician’s PIN when the service or supply is:

• An integral, although incidental, part of the physician’s professional service;

• Commonly rendered without charge or included in the physician’s bill;

• Of the type that is commonly furnished in physician offices or clinics;

• Furnished by the physician or auxiliary personnel under the physician’s direct supervision.

Medicare defines these services as those performed by a NPP or auxiliary staff member who is acting under the supervision of a physician and who is employed by or contracted with the physician or the legal entity that employs or contracts with the physician. 

There must have been a direct, professional service furnished by the physician to initiate the course of treatment of which the service being performed by the non-physician is an incidental part.

This means that the physician must see the patient first, in order to initiate the plan of care for that patient, and the NPP  follows that plan of care during subsequent visits.

It also means that if a patient mentions a new problem during a follow-up visit for a problem with an established plan of care, the visit cannot be billed incident-to. For example:

Dr. A is treating a patient for diabetes. The patient’s evaluation and management (E/M) encounter in the office  is with a PA of the same group for an upper respiratory infection. Can the PA bill the service incident-to Dr. A and bill under Dr. A’s PIN?

In this situation, the upper-respiratory infection is not part of the treatment for diabetes and, therefore, is not an “integral, although incidental” part of Dr. A’s “professional service.”  The PA should not bill incident- to under Dr. A’s provider number, but should bill the appropriate level of new or established E/M service provided under his or her own provider number. The physician must have performed the initial service for the diagnosis or condition, and must remain actively involved in the course of treatment.

Finally, the physician must perform subsequent services that reflect his or her continued active management of the patient’s care.

Direct physician supervision

To understand this billing scenario, we need to explore further what CMS means by “physician’s direct supervision.”

According to CMS, “Direct supervision in the office setting means the physician must be present in the office suite and immediately available and able to provide assistance and direction throughout the time the service is performed. Direct supervision does not mean that the physician must be present in the same room with his or her aide.” 

Additionally, CMS states, “If auxiliary personnel perform services outside the office setting, e.g., in a patient’s home or an institution (other than a hospital or Skilled Nursing Facility,) their services are covered incident to a physician’s service only if there is direct personal supervision by the physician.” 

Therefore, the only time when a NPP or auxiliary staff member can bill a service under a physician’s PIN is when a physician is in the office suite and directly available to help, if needed. The physician merely being available by phone does not constitute direct supervision.

Keep in mind that the physician providing the direct supervision (or who is in the office) does not need to be the physician who established the plan of care for the patient. Check with your Medicare carrier for where the physician name(s) (i.e., the supervising physician and the physician who established the patient’s plan of care) should be placed on the claim form. 

Exception to direct supervision

Services to homebound patients in underserved areas, CMS says, are not subject to direct supervision, but rather general supervision requirements.

CMS defines general supervision as “The physician needs to be physically present at the patient’s place of residence when the service is performed. But the service must be ordered by the physician and performed under his overall supervision and control. The physician retains professional liability for the service.” A patient is considered homebound when his ability to leave his home is restricted and requires considerable effort. 

Closer look at your choices

While auxiliary personnel must bill their services incident-to (because insurance carriers do not credential them), NPPs have a choice whether to bill their services incident-to to Medicare. The incentive to bill incident-to services is reimbursement. Medicare allows 100% of the Medicare fee schedule amount for coverable services submitted by a physician.

Medicare allows a percentage of the physician fee schedule amount when services are submitted under a NPP provider number. The percentage is 85% for physician assistants, nurse practitioners, and clinical nurse specialists.

The drawback to  incident-to billing is the administrative burden of coordinating physicians and NPPs schedules in order to have a supervising physician on-site.

If your NPP or auxiliary staff is going to bill incident-to a physician’s services, be sure to follow the guidelines because this is an area under scrutiny by payers who recognize this type of billing. For that reason and because of the complexity of the guidelines, some offices have chosen to avoid incident-to billing. 

The answer to our reader’s question was provided by Renee Stantz, a billing and coding consultant with VEI Consulting Services in Indianapolis, Indiana. Send your practice management questions to medec@advanstar.com.

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