Incident-to Billing: Navigating Medicare and Commercial Payer Guidelines

January 31, 2025

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What to Know About Incident-to Billing

Learn the dos and don’ts of incident-to billing that can help your practice make better use of nonphysician practitioners

If your practice uses incident-to billing, you’re likely familiar with how challenging it can be to adhere to the many rules and regulations. However, practices that do not use incident-to billing might be overlooking opportunities to use nonphysician practitioners (NPPs) more efficiently and may potentially forgo revenue their practice is eligible for under payer rules. We’ve prepared a summary of this billing approach if you’re considering implementing incident-to billing at your practice.

What is incident-to billing?

Incident-to billing allows NPPs to provide follow-up services under the direction of a supervising physician and bill under the doctor’s national provider identifier (NPI) number, resulting in a higher Medicare reimbursement rate.

Properly training your team about the ins and outs of incident-to billing can help your practice bill services in compliance with these complex regulations. Furthermore, proper training and understanding of guidelines for all payers may help mitigate the risk of audits, legal challenges, or fines. By carefully adhering to incident-to guidelines and rules, follow-up services provided by an NPP can receive 100% of the Medicare physician fee schedule rather than the 85% reimbursement rate provided when NPPs bill under their own NPI.

While auxiliary staff (such as medical assistants) may perform certain services under the supervision of an NPP, such claims must be billed under the supervising NPP’s NPI.

How is incident-to billing different from split/shared services

Distinguishing between incident-to and split/shared billing is crucial, as they are mutually exclusive billing regulations dictated entirely by the place of service. Incident-to billing is restricted to private office settings (POS 11) and allows for 100% reimbursement only when an NPP sees an established patient with existing problems, contingent upon the supervising physician providing direct supervision.

Split/shared billing, on the other hand, applies exclusively to facility settings, such as hospitals, emergency rooms, or skilled nursing facilities (POS 19, 21, 22, 23). With split/shared billing, physicians and NPPs are able to share visits for both new and established patients, and the billing provider is based on who performed the substantive portion of a visit — defined by the Centers for Medicare & Medicaid Services (CMS) as either more than half the total time or the substantive part of the medical decision-making (MDM). This means both the NPP and the physician must document what they each performed.

A tale of two incident-to billing scenarios

Let’s look at an example. An established Medicare patient experiencing acid reflux visits a gastroenterologist at her private practice. The doctor prescribes medication and schedules a follow-up visit in a week.

In Scenario A, the Medicare patient returns for the follow-up and is seen by a nurse practitioner, who is supervised and follows the care plan established by the practice’s gastroenterologist. The nurse practitioner records the patient’s progress, the absence of new complaints, and the supervising physician’s presence in the office suite. This visit may qualify for incident-to billing if all Medicare requirements are fulfilled, enabling the clinic to be reimbursed at 100% of the Medicare physician fee schedule.

In Scenario B, upon returning for the follow-up, the Medicare patient informs the nurse practitioner of a new complaint unrelated to acid reflux. The nurse practitioner, if qualified, can address the new complaint and outline a new treatment plan. However, incident-to billing cannot be used for this visit that addresses a new complaint. The clinic must bill Medicare under the nurse practitioner’s NPI, resulting in the clinic being eligible to collect 85% of the Medicare physician fee schedule.

Understanding incident-to Medicare guidelines

Knowing when and how to use incident-to billing with NPPs may help your practice better manage staffing and resources, especially when there is a shortage of physicians.

In order to bill a service as incident-to, CMS has several requirements, including that:

The supervising physician must have initially seen the patient (for the specific medical condition(s) being treated) and set up the treatment plan.
Only established patients seen by a supervised NPP for a follow-up appointment can be billed incident-to, provided there are no new problems.
For procedural services with a 10- or 90-day global period (e.g., biopsies, destructions, complex injections, or fracture care) rendered by an NPP, the supervising physician must be physically present in the office suite; however, for all other routine follow-ups rendered by an NPP, the physician may supervise from the office suite or virtually via real-time audio-video connection (audio-only connections are not sufficient).
The supervising physician must actively participate in the course of treatment.
The medical services must take place in a noninstitutional setting (e.g., POS 11).
Both the NPP and the supervising physician must be credentialed by Medicare; and
The NPP must be an employee of the supervising physician’s practice.

Incident-to billing is not consistent with CMS rules if:

The patient is new
An established patient presents with new medical complaints; or
The supervising physician is not present in the office suite or is not virtually available in real time by audio-video connection (only for services without a 10- or 90-day global period).

In addition, Medicare Administrative Contractors (MACs), which process Medicare claims in different parts of the country, may each have their own guidance and documentation requirements for incident-to billing that your practice should consider. If your practice runs clinics in multiple states, for example, each location must follow the applicable MAC guidelines for incident-to billing, as documentation requirements vary by MAC.

Breaking down physician supervision requirements and exceptions

While “direct supervision” is the baseline, CMS has introduced nuances that every modern practice should understand.

Direct physical: For procedural services with a 10- or 90-day global period (biopsies in dermatology or fracture care in orthopedics), the supervising physician must be physically present in the office suite.

Virtual or in-office: For standard follow-up visits, the physician must be present in the suite or available via real-time audio-video connection. (Note: Audio-only is not enough; the camera must be on.)

General: For services like chronic care management (CCM) or transitional care management (TCM) — common in gastroenterology or urology — CMS often allows for general supervision, i.e., the physician is legally “supervising” even if they aren’t physically in the building.

Understanding incident-to billing documentation for commercial payers and Medicaid

Just as your practice should be aware of MAC-specific requirements in your region when it comes to incident-to billing for Medicare services, you should also review commercial payers’ rules regarding incident-to billing practices. For example, some commercial payers may prohibit incident-to billing under circumstances that Medicare might otherwise allow and commercial payers may also have supervision requirements that differ from those described above. Similarly, incident-to billing rules may vary under different state Medicaid rules.

How incident-to policies vary by state and plan

Commercial payers and other non-Medicare payers may vary in their requirements that the NPP be credentialed by the payer. It’s essential that practices that bill using incident-to recognize and meet the specific requirements of each payer. Some payers require the SA modifier to be billed with an evaluation and management (E/M) code to indicate it was provided incident-to. A payer may require you to append the SA modifier to identify incident-to billing, but still only reimburse the claim at 85%. Other commercial payers prohibit incident-to billing entirely, requiring the provider of service to be the billing provider.

Integrating EHR and practice management systems to help streamline incident-to billing documentation

The distinction between clinical documentation and billing

The EMA® EHR from ModMed® is designed to streamline clinical documentation and suggest codes based on a provider’s notes and choices. If the NPP is seeing a new patient, they would note directly in EMA that the primary provider (the NPP in this case) is also the billing provider for this visit, and incident-to billing would not apply. EMA also has an SA modifier plan that may be used to indicate the service as incident-to and link the SA modifier to the CPT when the user chooses the plan.

Why setting up incident-to billing processing matters

As a ModMed user, you can configure our ModMed Practice Management (PM) system to handle claims following documentation guidelines, including whether or not a specific payer allows incident-to billing. Your practice can also configure PM to initiate payer-specific scrub edits that help you comply with the insurer’s incident-to billing requirements. Setting up these configurations may help reduce errors and save time.

Getting the most out of compliant incident-to billing

Compliant incident-to billing allows practices to receive 100% of the Medicare physician fee schedule reimbursement rate for NPPs providing follow-up care to eligible patients. In contrast, billing for the same services under an NPP’s NPI is eligible for 85% reimbursement. As a result, when it is appropriate and compliant to do so, your practice can collect 15% more for a Medicare-eligible service billed as incident-to compared to a practice that does not employ this billing option.

Test your knowledge

Now that we’ve covered the fundamentals of incident-to billing, take a short quiz to test your understanding.

1. True or false? Incident-to billing can be used in a hospital setting.

False: Hospitals and long-term care facilities follow different shared/split services rules and do not allow incident-to billing.

2. True or false? A medical doctor not credentialed by CMS can bill under another doctor’s NPI using incident-to billing.

False: Medicare does not permit one physician to bill incident-to using another physician’s NPI. Incident-to billing is designed to allow NPPs to be an extension of the physician and see patients for follow-ups.

3. True or false? Practices can use incident-to billing for all services provided by nonphysician practitioners.

False: Practices must follow specific criteria and understand the rules for each case and payer.

4. True or false? Having a supervising doctor cosign a nonphysician practitioner’s note is always sufficient to use incident-to billing.

False: Regulations vary from payer to payer. With Medicare, for example, the supervising physician must provide direct supervision (either physically present in the office suite or immediately available via real-time audio-video connection (for services that do not have a 10- or 90-day global period) when the NPP renders services billable as incident-to, and the supervising doctor may not always be required to cosign the note so long as the supervision was provided.

5. True or false? All commercial payers follow CMS incident-to billing regulations.

False: Practices should confirm if their commercial payers allow incident-to billing and follow applicable payer rules.

Watch our webinar on incident-to billing guidelines.

This blog is intended for informational purposes only and does not constitute legal or medical advice. Please consult with your legal counsel and other qualified advisors to ensure compliance with applicable laws, regulations, and standards.