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Getting Paid for Someone Else’s Work: The Hidden Hurdles of Incident-To Billing

March 18, 2024

It’s not an unknown phenomenon. Getting paid for something that was at least partially performed or created by someone else is a well-established practice. Thomas Edison was well known for taking the inventions of others, including his employees, and appropriating them as his own, receiving the acclaim and a hefty pay day (Nikola Tesla was not a happy camper).  Then, there are those who contribute to the lyrics or musical elements of hit tunes, only to be denied the song-writing credits and royalties. While such occurrences are generally seen as unfair, getting paid for the work of others is actually condoned by the federal government—specifically in the area of healthcare. It’s referred to as “incident-to” billing. The question is, are healthcare providers meeting all the requirements to appropriately submit such claims?

General Concept

Medicare allows a billing provider, such as a physician or non-physician practitioner (NPP), to bill for services performed by others under certain, well-defined conditions. In this context, the billing provider is deemed to be a supervisor. Let’s first explore this concept in the context of a supervising physician. Why would a doctor want to bill for someone else’s work?

One of the main ways this billing concept can enhance the practice’s financial prospects is when service is performed by one of the clinic’s NPPs. If these “mid-level” providers, like the NPs, were to bill for a patient encounter under their own name/NPI, they would receive 85 percent of the allowable, instead of the 100 percent that a doctor would receive had the doctor performed the same service. If there was a way to turn the NP’s service from an 85-percent reimbursement to a 100-percent reimbursement, that would certainly benefit the doctor’s overall practice. This can be accomplished through incident-to billing. But beware; there are extensive requirements you must meet before you, as the supervising and billing physician, can submit such a claim.

A Question of Location

The availability of incident-to is not universal. It is limited to certain places of service (POS). In seeking to determine where such services can be billed, we first turn to 42 § 410.26 of the Code of Federal Regulations (CFRs). The regulation states that, for incident-to services to be payable to the supervising physician, such services must take place in a non-institutional setting, which the regulation goes on to clarify as “any setting other than a hospital or skilled nursing facility.” But does this really mean that incident-to services are acceptable to Medicare in all locations other than a hospital and SNF? Let’s take a closer look.  

A few years ago, one of the nation’s leading compliance attorneys for chronic pain issues indicated his belief that incident-to payments only applied to the office setting (POS 11). This was due to the repeated references to the office setting within Medicare’s primary guidance on incident-to services and billing: Chapter 15, Section 60, of the Medicare Benefit Policy Manual. He stated his position as follows:

The bottom line is that I believe the constant use of the “in office” language in Section 60 [of the MBPM] supports the position that you must bill POS 11 in order to bill incident to.

Since that opinion was put forward, Noridian—a Medicare administrative contractor (MAC)—wrote as recently as last year that incident-to only applies when the “services are performed in the physician’s office or in the patient’s home.”

Defining Supervision

For a physician to bill services performed by an NPP under the incident-to doctrine, the NPP would have to be operating under the “direct supervision” of the billing physician during the time of the patient service. This means that the billing MD must be in the same office suite (not necessarily the same room) as the individual performing the incident-to service.

The question occasionally arises: what about a situation where the pain practice rents office space in the ASC (surgery center) and the billing physician is in the ASC but outside the parameters of the rented office space within that same building? Medicare has made it clear that such a situation would violate direct supervision. The billing physician must be in the same “office suite” and must remain immediately available to the individual performing the incident-to service.

Having said that, we must now point out a seeming contradiction. The 2024 Medicare Physician Fee Schedule (PFS) final rule authorizes the billing physician in an incident-to scenario to directly supervise, via telehealth, through the end of this year. That is, virtual supervision is currently allowed where the billing physician is not in the office where the NP is performing the service but is immediately available to be contacted by way of audio-visual technology.

The Relationship Matters

The incident-to concept is based on a presumption that the person for whose services you’re billing is under your control. Beyond that, the person performing such services must represent some expense to the billing physician (employee, contract labor, etc.). This is why the incident-to concept doesn’t really make sense in the facility setting. You shouldn’t be able to bill for what the hospital’s nurses or employees are doing relative to your patients. But if they’re your nurses or your nurse practitioners, etc., then there is some logic to being able to bill for their services since they represent a cost to you.

Not For Every Patient

Incident-to services billing cannot occur where the patient is new. The billing provider must have seen the new patient and developed a plan of care for there to be any hope of billing incident-to relative to any subsequent visits by that patient. In other words, only established patient encounters can be billed out under the incident-to Medicare rules. In addition, the billing physician must intermittently be involved in the patient’s care during the course of treatment.

Should that established patient present with a new problem, the billing physician would need to be the one to address it at that time. Any later encounters as to that problem can be addressed by the NPP and billed out as incident-to.

A pain physician who wishes to bill under the incident-to rules should ensure that the patient record contains documentation of the doctor’s presence and involvement in the initial visit and new problems, as well as the plan of care and all follow-up involvement during the course of care. The chart should also reflect your presence in the office suite during the incident-to services. You need to assume that these NPP services—which pay out at 100 percent instead of 85 percent—could be the target of audits. It would be nice to have documentation in the chart showing how you conformed with the rules when the auditor comes calling.

As to the hundreds of other payers out there, many will follow Medicare’s lead. Others will have different specifications. Each one would have to be looked into to see if they have rules that differ from Medicare. 

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