An Incidental Matter: Reviewing the Intricacies of Incident To Billing

It’s a rather strange term, isn’t it? Whoever introduced it into modern medical usage should be given a timeout for forcing this phrase onto the American healthcare landscape. Yes, we’re talking about the well-known but little understood doctrine of “incident to.” By the way, is that an adjectival or nominative phrase? Does it come with a hyphen; and, if so, when is it applied?

However it’s categorized from a grammatical perspective, the general concept it describes is at least partially clear. Even so, many medical providers are failing to grasp the full range of requirements associated with incident to billing, and auditors are licking their chops at the prospects.

The Concept

The phrase “incident to” was originally part of the Social Security Act and later adopted by the Medicare billing rules. It essentially describes the performance of a healthcare service that is aligned with the instructions and/or plan of a different (usually higher-ranking) provider. Here’s the official definition from the Medicare Benefits Policy Manual, Ch 15, Sec 60.1:

Incident to a physician’s professional services means that the services or supplies are 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.

While the above excerpt provides some modicum of clarity, let’s be clear: the main point of the incident to concept is about billing—and specifically billing in the name of someone who didn’t directly provide the service. And this usually entails billing at a higher rate than had the claim gone out under the name of the person who actually provided the service. Here’s the classic example: a nurse practitioner (NP)–whose billing rate is 85% of the allowable—performs the service, but the claim goes out under the name and NPI of the supervising physician at the 100% rate.

Medicare and some other payers allow this type of billing because they’re relying on two fundamental factors—what you might call the twin pillars of incident to billing: (a) there will be some level of supervision, and (b) there will be some level of ongoing supervisor involvement.

The Requirements

As implied above, incident to is primarily a Medicare concept. So, it will be important to review Medicare’s prerequisites for billing such services. It is important to note, here, that incident to rules not only allow a non-physician practitioner (NPP) service to be billed by a physician at the 100% rate; the rules also allow the service of auxiliary personnel (e.g., RNs) to be billed by the supervising NPP at the 85% rate. But for ease of explanation, the following requirements only take into account the scenario where an NPP (such an NP) is performing the incident to service and a physician is billing it out at the 100% rate. With that in mind, here are the requirements:

New vs. Established Patient. The physician must have initially seen the patient and established the course of treatment, i.e., plan of care. This means that you cannot bill incident to for a new patient visit. This also means that you cannot bill incident to services for a new problem/complaint related to the established patient. Medicare is quite clear: a new problem means a new care plan—which the physician must create—in order for subsequent visits relative to that new problem to be billed out as incident to.

Care Plan Connection. The incident to service (by the NP or PA) must be part of the physician’s established course of treatment.

Ongoing Involvement. Not only must the physician initiate the care plan, he or she must remain actively involved in the patient’s care over the course of the subsequent, incident to visits. This requirement is not fully fleshed out by Medicare, but meeting with the patient more than once would seem to be a minimal requirement.

Direct Supervision. Unlike non-incident to services where an NP, for example, can perform services (at the 85% rate) without the on-site presence of a supervising physician, incident to services (billed at the 100% rate) are subject to the direct supervision requirement. This type of supervision requires the physician to be in the office/clinic (not necessarily in the same exam room) during the service. If the office is connected to a surgery center, they cannot be in surgery center section of the building. They must be within the confines of the office suite, as incident to only applies in an office setting.

There is a relatively new exception to the physical presence rule: The direct supervision requirement can be met where the supervising physician is not in the office but where both the supervising physician and the provider of the incident to service have access to real-time, two-way, audio/visual technology that allows for virtual presence AND the supervising physician is immediately available to be contacted via such technology. In other words, the doctor who has access to this technology but who is out scuba diving at the time of the incident to service cannot bill the service.

Financial Cost. The individual performing the incident to service must represent an expense to the billing physician or the entity with which the physician is connected (e.g., employee, leased employee, contract labor of the physician or the group entity).

Given the above, providers should be careful to keep in mind the following recommendations when documenting incident to services (again, these are based on a scenario where the physician is billing the service):

• Physician’s initial plan of care note should state that future visits may involve services by auxiliary personnel (e.g., NP, PA).
• The incident to service note should reflect that the service is related to the physician’s plan of care.
• Patient’s progress and response to the physician’s plan of care should be noted.
• Signature of the individual performing the incident to service should be added to the note. (It is not necessary for the supervising physician to co-sign the progress note.)
• Indicate the physician’s ongoing involvement in the care of the patient.
• Documentation should confirm that the physician was present in the office/clinic and “immediately available” during the visit (or available virtually by means of real-time, two-way, audio/visual technology).
• Denote when the physician sees the patient and any service the physician may have performed during such occurrences.
• List the name of supervising physician at the time of the service.

So, there you have the guidelines for incident to services when it comes to Medicare patients. It is important to remember that payers other than Medicare may have different rules. Some payers may follow Medicare, others may outright reject the concept altogether, and still others may have their own set of requirements. It will be important to review each payer’s rules before assuming a service can be billed as incident to.

For example, Blue Cross Blue Shield/Blue Care Network of Michigan has a unique approach. Beginning March 1 of 2027, where the rendering provider is an enrolled NPP, the claim will be paid under the NPP’s name/NPI at the normal NPP rate of 85%—regardless of physician supervision. So, effectively, there is no incident to where the rendering provider is enrolled. However, if the NPP is not enrolled, the service rendered by the NPP will be paid as incident to, but at an 80% rate, rather than the 100% (or even 85%) rate.