Practice Management Alert

Look to Medicare rules for a basic foundation.

It’s worth knowing how Medicare handles incident-to billing because many payers use Medicare’s guidelines as the basis for their own rules about the billing practice.

Background: What is incident-to billing? “Medicare allows practitioners or physicians to bill Medicare for services provided by nonphysicians as if the services were actually provided by a physician,” says Terry Fletcher, BS, CPC, CCC, CEMC, CCS, CCS-P, CMC, CMCSC, CMCS, ACS-CA, SCP-CA, owner of Terry Fletcher Consulting Inc. and consultant, auditor, educator, author, and podcaster at Code Cast, in Laguna Niguel, California.

When utilizing this practice, services 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, she adds.

Note: The term incident-to is applicable only to the Medicare program, technically; but, again, many payers follow Medicare guidelines.

Understand the Rules

There are some persnickety rules about incident-to billing, so if you want to utilize the practice, make sure you know the conditions.

“Incident-to rules allow a physician to bill a NP [nurse practitioner] or a PA [physician’s assistant] service, a NP PA, clinical nurse specialist, clinical nurse midwife, and clinical psychologist and social worker — they all fall under a midlevel or NPP [nonphysician practitioner] service but incident-to rules allow a physician to bill those services under a physician’s number under specific conditions,” Fletcher says.

Basically, the nonphysician practitioner must be an employee of the physician, the care they provide for a patient must not be the initial point of care, and the physician has to be nearby physically.

“The nonphysician practitioner must be an employee working for the physician or physician group, and physician services must be furnished during course of treatment where physician performed the initial service — that means initiating care, so a new patient visit — and then subsequent services of a frequency which reflect the physician’s active participation and management of a course of treatment,” she explains.

Additionally, the service must be rendered under a physician’s personal supervision. “I wish they wouldn’t say personal supervision, it really is called direct supervision, meaning that the physician needs to be in the office in the time of the service. We call it within yelling distance,” Fletcher says.

Dive Into the Nuts and Bolts

Generally, the physician as the initial point of care is crucial to billing incident-to successfully. However, your state may have different rules, so it’s worth checking.

“At some point the doctor is going to see the patient again, but they’re the ones who are going to see them initially. That’s not to say a nurse practitioner or physician assistant can’t see a new patient visit, depending on your state rules, so make sure you know what your state says about that, because every state is different,” Fletcher says.

Caveat: If a nonphysician practitioner sees a patient during the initial visit or conduct a new treatment, it’s probably easier and better to bill that service under the nonphysician practitioner’s Medicare number, depending on your state’s laws.

But that rule is partially designed to make sure that the nonphysician practitioner is truly an employee of the person whose number is being utilized.

“A lot of practices recently, and I don’t know why this is coming up, have said, ‘Well, we use a nurse practitioner from the hospital and they help us with our patients and they bill out services under our physician.’ You can’t do that,” Fletcher says.

“First of all, and one of the biggest rules: You can’t pass along an expense to a patient that you did not incur, because every service, every CPT^® code, every billable service that you have has something tied to it called overhead — part of the relative value unit — and if you’re not paying somebody a salary to provide services for you, or paying them a fee, then you can’t bill for services that include that overheard in the value of what you get paid,” she explains.

This means making sure that the nonphysician practitioner is an employee or is otherwise paid — a 1099 or a contracted rate works, too, Fletcher says.

Try to Avoid Different Policies for Different Payers

While Medicare’s policies on incident-to billing are probably the template from which other payers make their own rules, be careful about any negotiations for different rules with other payers.

“I really believe that unless you have a policy from every payer that you are contracted with, use Medicare as your gold standard. If you have a payer that wants things done differently, that’s up to you if you want to follow that, but to just say, ‘I’m going to do this for Medicare and no one else.’ That’s going to put you into a noncompliant realm, which is going to be a problem,” Fletcher says.