"Incident to" billing was never developed as a means for physician assistants (PAs), nurse practitioners (NPs) and clinical nurse specialists (CNS) to bill the government. When Medicare first was implemented in the 1960s (prior to the memories of many NN&I readers), the general family physician was the most important practitioner in town.1 This was the time of "Marcus Welby" when you could have X-rays, lab tests, any lesion removed, suturing done, an EKG and all paperwork completed during your leisurely visit to the physician…who was treating you and all family members who came with you.
This physician had an office assistant who was either trained on the job or may have been a diploma nurse or nursing assistant. Usually one person functioned as the X-ray technician, phlebotomist, EKG technician, front desk staff and, on the side, also did the transcription and office billing.
It soon became apparent that the responsibilities of the office staff freed up the physician to care for patients but that the payments to physicians needed to cover the "incidentals" supplied by their staff. In order to reimburse practices for the full work of their physicians and staff, physicians’ professional services were established under an "incident to" service. An incident to service was defined as “an integral, although incidental, part of the physician’s personal professional services to the patient.”1
Less money, same time
When PAs and NPs were certified as billing practitioners by Medicare, bowing to both the will of the dollar and the will of organized medicine, payment for the PAs/NPs, under their own provider number, was to be at 85% of the physician billing. It was a bitter pill to swallow but in order to obtain provider numbers, PAs and NPs agreed to the compromise. It has been a bone of contention ever since.
Incident to was then adapted to PA and NP billing to allow the office to collect at 100% for the PA/NP’s work.1 (Note: hospital billing is a whole other set of rules). The concept was that the physician could overlap with the PA/NP in the office and any visit with an established patient seen by the PA/NP would be paid at 100%. This did not require that the physician see the patient, review the chart, or have any other input except to be physically present. A physician in the practice (not necessarily the one in the office) must have previously examined the patient and have established a plan of care. If no physician was in the office at the time, the PAs/NPs could still see patients but would bill at 85% under their own provider number.
This concept was promoted as a mechanism to increase payment to the offices in order to encourage more practitioners to accept Medicare patients. This was also an acknowledgement that the work of PAs/NPs was often vital to the practice and to the Medicare population, and satisfied the physicians clamoring for higher reimbursement for their PAs/NPs. Initially it appeared to be a win-win for everyone. But soon problems started cropping up.
Medicare's definition of 'incident to'
Medicare defined incident to in their outreach letters (again and again) with the most recent definition released in 2013:
To qualify as “incident to,” services must be part of your patient’s normal course of treatment, during which a physician personally performed an initial service and remains actively involved in the course of treatment. You do not have to be physically present in the patient’s treatment room while these services are provided, but you must provide direct supervision, that is, you must be present in the office suite to render assistance, if necessary. The patient record should document the essential requirements for incident to service.2
While the concept specifically defined who (by degrees or certifications) and where (office), the issue of what was continuing "the plan of care" was nebulous (see sidebar). What was "continuing the plan of care" and "what was a new diagnosis"? Medicare tried to solve the problem by giving an example of an "incident to" patient but this only seemed to make matter worse.
Example: 75 y/o diabetic patient with an open, non-oozing wound on toe after problems with poorly fitting shoes. Wound cleaned, dressed and patient taught local wound care. Physician in office but PA/NP does not discuss with him/her.3
Required: Physician physically in office, PA/NP is your employee, done in office, previously managed by physician.
A certain level of inconsistency in the interpretation of "incident to" is due to the subcontractors or MACs (Medicare Administrative Contractors) that Medicare uses to process claims and interpret payment policy throughout the country. The definition of what care was "continuing the plan of care of the physician" versus what was newly changed from one MAC to another. The confusion was so great that Medicare's Office of Inspector General (OIG) became involved. In 2012, the OIG announced plans to review "incident to" services to look for fraud and abuse. Here is the excerpt from the OIG report:
2012 OIG work plan: Physicians: Incident-To Services (New)
We will review physician billing for “incident-to” services to determine whether payment for such services had a higher error rate than that for non-incident-to services. We will also assess CMS’ ability to monitor services billed as “incident-to.” Medicare Part B pays for certain services billed by physicians that are performed by non-physicians incident to a physician office visit. A 2009 OIG review found that when Medicare allowed physicians’ billings for more than 24 hours of services in a day, half of the services were not performed by a physician. We also found that unqualified non-physicians performed 21 percent of the services that physicians did not perform personally. Incident-to services represent a program vulnerability in that they do not appear in claims data and can be identified only by reviewing the medical record. They may also be vulnerable to overutilization and expose Medicare beneficiaries to care that does not meet professional standards of quality. Medicare’s Part B coverage of services and supplies that are performed incident to the professional services of a physician is in the Social Security Act, § 1861(s)(2)(A). Medicare requires providers to furnish such information as may be necessary to determine the amounts due to receive payment.4
This final OIG plan was the death knell to using "incident to" billing for a significant number of practices that had been exploring options for increasing revenues. If the RAC (recovery audit contractors) used by Medicare to review claims find any claim they disagree with, not only must a practice pay back the revenues but a fine up to $10,000 per incident can be issued.5 Often practices find it easier to pay the fine than to fight “the 1000 lb. gorilla.”
The benefits go to…
"Incident to" billing does not benefit PA and NPs. By using the physician’s NPI number for billing, the actual "work" of the PA/NP is hidden from the practice. Often the PAs/NPs will not be able to negotiate a larger salary or justify their contributions to the practice since their billings are "hidden" under the physicians’ billings. In many private groups, this can be adjusted by adding a code to the billing such that the office staff can pull up the PA/NP’s "true" productivity and not just those visits that were billed under the PA/NP NPI number. However, in a larger organizations, this is more difficult. PAs/NPs can bill for dialysis rounds (unlike residents and fellows) and often the PA/NP’s rounds are credited to the attending…whether or not he/she was there, since physicians in the practice are interchangeable for billing purposes per CMS. PA/NPcontributionsare hidden from work force researchers, federal legislators and others who, based on what they see, may not understand the volume of patient visits being delivered by PAs/NPs. Thus, when PAs/NPs come to Capitol Hill to advocate for more inclusion in Medicare programs, the legislators do not realize that the PA/NP is already doing the work (under "incident to" billing which is hidden under the physician NPI)…just not getting credit for it.
The recent publication of the Medicare Provider Utilization and Payment Data may have caused a misconception as to the amount of reimbursement received by physicians. These aggregate physician reimbursement numbers often included reimbursement from services provided by PAs and NPs that was billed "incident to" the physician’s NPI number. Many physicians had to back-pedal to their patients to explain that they were really not making $10 million/year billing Medicare.
For these reasons, and the fact that the average addition of "incident to" for a 99213 office visit is only $10/office visit, many large organizations have decided to forgo "incident to" billing.6 Perhaps they are right to decide "incident to" must go the way of the dinosaur. It is time to let "incident to" billing go and to let PA and NP billing to stand on its own.
Case 1: A 67 year-old female followed by your practice for congestive heart failure and seen originally by the physician presents to the PA/NP for follow-up management. The physician is in the suite of offices during the exam but does not see the patient. The PA/NP notes that the patient has more edema and some crackles on exam. The PA/NP increases furosemide, orders follow up labs and bills "incident-to". Acceptable?
A. Yes. The physician had already seen the patient for the same diagnosis, set out the plan of care and the PA/NP was following the plan of care. The physician was in the same suite at the time the patient was seen although he/she did not see the patient personally.
Case 2: The patient in Case 1 complains of a cough and is running a fever of 99F. The PA/NP evaluates and diagnoses an upper respiratory infection. He/she treats the infection, increases the furosemide, orders follow-up labs and schedules the patient to follow up with physician at the next appointment. 'Incident to'?
A. Yes or No. If the PA/NP can diagnose and treat the issue, NOT increasing the complexity of the medical-decision making or providing a more detailed exam or expanding the history, then one can treat the problem and bill "incident to." However, just the history alone makes this difficult.
Case 3: A long standing CKD patient comes back to your office for her four month follow-up. Using the protocols developed by your practice and documented in the EHR (electronic health record), the PA/NP manages her kidney disease, adjusting medications for the underlying diabetes and hypertension. Since the office is now part of the new local hospital clinics, patient information is updated into the new EHR, noting that the management was set out by the physician on the original visit. Can you bill 'incident to'?
A. No. Your practice has been bought by the hospital system and thus Medicare considers your practice to be "hospital" for billing purposes. "Incident to" can only be billed in an outpatient setting. The fact that your office is outpatient does not matter to Medicare. The ownership is hospital. This particular question is being reviewed by Medicare right now.
Case 4: A 72 year-old male with a history of AKI on CKD (acute on chronic kidney disease) is followed by the PA/NP after an acute ATN episode caused by ibuprofen. The supervising nephrologist had stopped the medication in the hospital and set up the follow-up with the PA/NP in the office with new labs. The PA/NP reviews the most recent labs, documents the resolution of the AKI and cautions the patient to stay away from all NSAIDs. There is a physician in the office but she does not care for this patient and she does not know the patient's history. Can you bill 'incident to'?
A. Yes and no. Since the physician of record set out the plan of care and the 'collaborating physician or alternate physician' is onsite, the PA/NP can bill "incident to." If the physician who is onsite is not on the PA/NP collaborating agreement, there is no "incident to". The onsite physician must be part of the same practice as the PA/NP are and be listed with the state as either a collaborating physician or alternate.
Case 5: A long standing CKD patient from your practice called with swelling of her lips. The office put the patient on the PA/NP schedule. The PA/NP notes that with the doubling of the ACE inhibitor at the last visit with the nephrologist was the most likely cause of the 'allergic' angioedema reaction. The PA/NP stops the medication. There is a physician in the suite of offices but he does not see the patient. Can this be billed as "incident to?"
A. Maybe. The documentation must show that the physician was involved in the change and the patient must see the physician on the next visit. Even then, this is MAC (Medicare Administrative Contractors) specific. Each MAC interprets the rules as set out by CMS and makes judgment calls as to what is considered following the plan of care and what constitutes setting a new plan of care. This particular scenario is very likely NOT allowed by most MACs as "incident to."
1. Gosfield A. The Ins and Outs of “Incident-To” reimbursement. Fam Pract Manag. 2001 Nov-Dec;8(10):23-27.
2) MLN Matters. Number SE0441 2013
3) Medicare Part B (42 C.F.R. Section 410.26)
4) Social Security Act, § 1833(e).) (OEI; 00-00-00000; expected issue date: FY 2013; new start)
6) Michael Powe, AAPA Vice President, Professional and Reimbursement Advocacy, NKF Spring Clinical Meetings, Orlando, Fl 2013.