Employing non-physician practitioners (physician assistants, nurse practitioners, clinical nurse specialists, etc.) is an effective way to increase productivity in a physician office. However, under Medicare rules, covered services provided by non-physician practitioners (NPPs) are reimbursed at a reduced rate (85 percent of the fee schedule amount).
The “incident-to” billing rules provide an exception, allowing 100 percent reimbursement for non-physician services that meet the requirements detailed in the Medicare Benefit Policy Manual, Chapter 15, Section 60 (Services and Supplies Furnished Incident To a Physician’s/NPP’s Professional Service).
There are six basic requirements to meet the incident-to guidelines for Medicare payment:
1. The service must take place in a “noninstitutional setting,” which the Centers for Medicare & Medicaid Services (CMS) defines as “all settings other than a hospital or skilled nursing facility” [emphasis added].
Per the Benefit Policy Manual, “Hospital services incident to physician’s or other practitioner’s services rendered to outpatients (including drugs and biologicals which are not usually self-administered by the patient), and partial hospitalization services incident to such services may also be covered.”
2. A Medicare-credentialed physician must initiate a patient’s care. If the patient has a new or worsened complaint, a physician must conduct an initial evaluation and management (E&M) for that complaint, and must establish the diagnosis and plan of care. Incident-to services cannot be rendered on the patient’s first visit, or if a change to the plan of care (e.g., medication adjustment) is required.
3. Subsequent to the initial encounter (during which the physician arrives at a diagnosis and plan of care), an NPP may provide follow-up care. This care must occur under the “direct supervision” of a qualified provider. Per the Benefit Policy Manual:
Direct supervision in the office setting does not mean that the physician must be present in the same room with his or her aide. However, the physician must be present in the office suite and immediately available to provide assistance and direction throughout the time the aide is performing services.
If auxiliary personnel perform services outside the office setting, e.g., in a patient’s home or in an institution (other than hospital or skilled nursing facility), their services are covered incident to a physician’s service only if there is direct supervision by the physician [e.g., the physician must be physically present to oversee the care].
The supervising physician does not have to be the physician who performed the initial patient evaluation. Any physician member of the group may be present in the office to supervise.
4. A physician must actively participate in and manage the patient’s course of treatment. The exact requirement is usually defined by the state licensure rules for physician supervision of NPPs (e.g., the physician must see the patient every third visit).