How to Correctly Bill Incident To Services

“Incident to” billing refers to a Medicare provision allowing certain services performed by non-physician practitioners (NPPs) and auxiliary personnel to be billed under a supervising physician’s National Provider Identifier (NPI). This mechanism enables practices to receive 100% of the Medicare Physician Fee Schedule rate for these services, rather than the 85% typically reimbursed when NPPs bill under their own NPIs. The primary purpose of “incident to” billing is to facilitate comprehensive patient care within a physician-led team, ensuring that follow-up services align with the physician’s established treatment plan and direct oversight.

Core Principles of Incident To Billing

“Incident to” billing is a specific Medicare rule designed for services provided in non-institutional settings, such as a physician’s office or clinic. It permits services or supplies that are an integral, though incidental, part of a physician’s professional service to be billed under the physician’s NPI. This applies to services furnished by non-physician practitioners, including Physician Assistants (PAs), Nurse Practitioners (NPs), Clinical Nurse Specialists (CNSs), and also auxiliary personnel like nurses and medical assistants.

The services provided by these individuals are extensions of the physician’s personal services. The physician must have initially seen the patient, established a diagnosis, and developed a comprehensive plan of care. Subsequent services provided by the NPP or auxiliary personnel must directly relate to this established plan of care.

This billing method is generally limited to services performed in a physician’s office or clinic, defined as a non-institutional setting. It does not apply to services rendered in institutional settings such as hospitals (inpatient or outpatient), skilled nursing facilities, or emergency rooms, as these settings have different billing regulations. The physician must maintain active involvement and management of the patient’s course of treatment, even if not present for every visit.

Pre-Claim Requirements and Documentation

For a service to qualify for “incident to” billing, several specific requirements must be met before a claim can be submitted. A physician must directly supervise the services provided by non-physician practitioners or auxiliary personnel. Direct supervision means the supervising physician must be physically present in the office suite and immediately available to provide assistance and direction throughout the time the service is performed. This presence ensures the physician can intervene if necessary, though they are not required to be in the same room as the patient.

Eligible non-physician practitioners whose services may qualify for “incident to” billing include Physician Assistants, Nurse Practitioners, and Clinical Nurse Specialists. Auxiliary personnel, such as registered nurses, medical assistants, and technicians, can also provide services under “incident to” rules. Both the supervising physician and the non-physician practitioner or auxiliary personnel must be employed by the same medical group or entity that is submitting the claim.

The service must take place in a non-institutional setting, typically a physician’s office or clinic. Services performed in hospital inpatient or outpatient departments, skilled nursing facilities, or patients’ homes generally do not qualify. The service itself must be medically necessary and represent an integral part of the patient’s established treatment plan.

“Incident to” billing generally applies to established patients for follow-up care. The physician must have performed the initial service, established the diagnosis, and created the plan of care for that specific condition. If an established patient presents with a new problem or a significant change to an existing one, the physician must personally evaluate and manage this new issue for the service to potentially qualify for “incident to” billing for future follow-up.

Thorough documentation in the patient’s medical record is essential to support an “incident to” claim. The record must clearly identify who rendered the service and document the supervising physician’s physical presence in the office suite and immediate availability during the service. Evidence of the physician’s initial service, ongoing involvement in the patient’s care, and the medical necessity for the service must be present.

Claim Submission Process

Once all pre-claim requirements are met and documentation is complete, the process of submitting a claim for “incident to” services involves specific steps on the CMS-1500 claim form. The most critical aspect is accurately identifying the rendering and billing providers. On the CMS-1500 form, the National Provider Identifier (NPI) of the supervising physician must be entered in Box 24J as the rendering provider, even though a non-physician practitioner or auxiliary personnel performed the service.

The group’s NPI, or the individual physician’s NPI if a solo practitioner, should be placed in Box 33A as the billing provider. This ensures the claim is processed under the physician’s credentials. Standard Current Procedural Technology (CPT) and Healthcare Common Procedure Coding System (HCPCS) codes for the services rendered by the non-physician practitioner are used without requiring specific modifiers for “incident to” services by Medicare.

Diagnosis codes, reflecting the patient’s condition that aligns with the established plan of care, should be accurately reported. The date of service will reflect when the service was performed by the non-physician practitioner or auxiliary personnel. All services billed must be medically necessary and fall within the scope of Medicare coverage.

Claims are most commonly submitted electronically through a clearinghouse. Electronic submission is the preferred method for Medicare. Providers typically enroll for Electronic Data Interchange (EDI) with their regional Medicare Administrative Contractors (MACs) to facilitate electronic claim processing.

After submission, claims undergo initial automated edits to ensure compliance with HIPAA standards and other requirements. Claims that pass these “front-end” edits are then forwarded for further processing. While specific processing times can vary, electronic claims generally have a quicker turnaround compared to paper submissions. Practices must retain all supporting documentation in their records, as claims are subject to potential post-payment audits by Medicare. This documentation serves as proof that all “incident to” rules were followed, mitigating risks of recoupment or penalties.