Billing Medicare for 'incident-to' services

Cracking the Code

Alexander Miller

Dr. Miller, who is in private practice in Yorba Linda, Calif., represents the American Academy of Dermatology on the AMA-CPT Advisory Committee.

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There are many instances in which designated medical staff provide in-office services under the supervision of a physician. Such services are considered as delivered “incident to” the supervising practitioner’s services. When the physician is the supervisor the services are billed under the physician’s National Provider Identifier (NPI) and paid at 100 percent of the Medicare physician fee schedule. When a physician assistant (PA) or nurse practitioner (NP) (non-physician practitioner) supervises, the services are billed under the PA’s or NP’s NPI and reimbursed at 85 percent of the physician fee schedule. Common “incident-to” services include taking vital signs, administering injections, changing dressings, and removing sutures. Most offices have designated personnel other than the physician performing the aforementioned services, and intuitively know that such services are appropriately included in the physician’s billed service. However, the billing and documentation requirements become more specific when dealing with patient care provided by a PA or NP yet billed under the physician’s NPI.

Medicare establishes specific requirements for “incident to” services. For physicians supervising licensed non-physician practitioners such as PAs or NPs these include:

  • The PA or NP must be directly supervised.
  • The PA or NP is either an employee or an independent contractor representing an expense to the physician.
  • The physician must be in the office suite while care is being rendered, and must be available to give assistance if needed. (For a group practice, any physician within the group may supervise.)
  • The patient must be an established patient with an established problem.
  • The physician must have performed the initial patient encounter and service.
  • The physician must remain actively involved in the patient’s subsequent treatment course.
  • Residents and fellows may not supervise “incident-to” services.

[pagebreak]The practical details and corollaries of the above requirements are:

  • Incident-to billing may only be done for established patients with an established problem.
  • New patient encounters do not qualify for incident-to billing.
  • Established patients with new problems do not qualify for incident-to billing.
  • The supervising physician does not have to be present in the treatment room but must be present in the office suite (the physician does not have to see the patient).
  • Documentation should define:

    o Who performed the service.

    o That the physician was present in the office suite (a dated signature is helpful).

  • The provider’s services must be medically necessary.
  • When PAs and NPs see new patients or established patients with new problems the encounters are billed under the non-physician’s NPI and reimbursed at 85 percent of the physician fee schedule.

For Medicare, the physician must be able to demonstrate active engagement in the patient’s care and must meet the defined supervisory criteria in order to qualify for incident-to billing and the 100 percent of the physician fee schedule reimbursement that it allows. The Medicare Benefit Policy Manual, Chapter 15, Section 60.2 defines supervision as: “...the physician must be physically present in the same office suite and be immediately available to render assistance if that becomes necessary.” The manual further states, “...there must be subsequent services by the physician of a frequency that reflects the physician’s continuing active participation in and management of the course of treatment.” Thus, one should not bill for incident-to services when continuing care is solely provided by a PA or NP.

The above “incident-to” criteria specifically apply to Medicare patient billing. Private insurers may have other guidelines. State laws and regulations define the specific supervisory and scope of practice criteria for PA or NPs. Such regulations and requirements will vary from state to state, and typically involve less stringent physician supervision that what is necessary for Medicare incident-to billing.

Adherence to proper guidelines when billing Medicare for incident-to services will help keep one protected in the event of an audit and from potential fraud and abuse allegations.[pagebreak]

Example 1: A new Medicare patient is initially evaluated by an NP or PA, who generates a diagnosis and a treatment plan. During the conclusion of the evaluation the physician comes in, introduces him/herself, reviews the chart, approves the treatment plan, and signs the chart. As the physician participated in the patient care, the encounter is billed under the physician’s NPI and reimbursed at 100 percent of the physician fee schedule.

Answer: Incorrect. The NP or PA initiated and performed the new patient encounter. Merely saying “hello” to the patient, reviewing the chart data, and signing a chart does not constitute a personal initial patient evaluation by the physician. The physician must initiate and complete the encounter. The encounter should be billed under the PA or NP’s NPI.

Example 2: While you are in your office an established Medicare-insured patient sees your PA. During the course of the routine follow-up visit you leave for the hospital to do an inpatient consultation, as you have full confidence in your PA’s expertise. You subsequently bill the visit as an incident-to service under your NPI.

Answer: Incorrect. Under Medicare regulations you, the physician, must be in the office suite during the course of the patient evaluation and treatment for the visit to be billed as an incident-to service under your NPI and reimbursed at 100 percent of the Medicare fee schedule. The visit should be billed under the PA’s NPI and reimbursed at 85 percent.

Example 3: A Medicare patient sees your NP for a follow-up visit for ongoing psoriasis treatment. During the evaluation your NP notices a facial lesion suspicious for a basal cell carcinoma and biopsies it. Your office then bills for the psoriasis evaluation and management and for the biopsy under the NP’s NPI because a new problem was identified and treated.

Answer: Correct. As a new problem was evaluated and treated by the NP, the billing is appropriately done under the NP’s NPI and reimbursed by Medicare at 85 percent of the physician fee schedule.

Example 4: During the course of a Medicare patient’s follow-up visit for seborrheic dermatitis the patient describes the onset of a new groin and buttocks rash that the PA diagnoses as tinea corporis. The supervising physician then evaluates the patient for the new problem, generates a treatment plan, and asks for a follow-up visit in one month. A month later the patient sees the PA for assessment of a response to treatment. The first visit is billed under the physician’s NPI, as the physician evaluated the new problem, and the subsequent visit is also billed under the physician’s NPI, as it was for an established problem.

Answer: Correct. During the first visit the PA had a decision to make: invite the physician to evaluate the patient or take over the evaluation and treatment. Involving the physician in the patient evaluation and treatment allowed for the visit to be billed under the physician’s NPI. The follow-up visit was for an established problem, so it too was appropriately billed under the physician’s NPI. Had only the PA seen the patient during the first visit, the first and follow-up visits would have been billed under the PA’s NPI and reimbursed by Medicare at 85 percent of the physician fee schedule.