“Incident To” Billing: When and How?


“Incident to” services are defined by the Center for Medicare and Medicaid Services (CMS) as: services that 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. While this sounds straightforward enough, there are actually some very specific guidelines for this billing scenario.

When the requirements for “incident to” billing are met, the services are billed with the physician’s name and NPI on the claim. These charges will be reimbursed at 100% of the Medicare Physician Fee Schedule (MPFS) rather than the 85% reimbursement for non-physician providers (NPPs) such as APRNs or PAs.  Both the billing physician and the NPP performing the service must be employed by the same entity. 

The most important aspect of “incident to” billing – and often the most misunderstood – is that in order to be considered incidental, the service must be connected to a course of treatment designed by the billing physician. The physician would provide the initial service and establish a plan of care for a particular problem or problems. The NPP would perform follow up services “incident to” the physician’s services as demonstrated by following the documented treatment plan.  As a result, new patients or new problems for established patients may never be billed as “incident to” … there is no previous service or plan of care available as the patient or problem would be new in those cases.  This criterion makes the billing of services as “incident to” quite rare throughout our organization.

“Incident to” services must be performed in an office setting to qualify for Part B billing purposes.  The physician is expected to provide direct supervision to the performing provider, which CMS describes as “present in the office suite and immediately available and able to provide assistance and direction throughout the time the service is performed”.  If the physician providing the direct supervision for the NPP is not the same physician who initiated the plan of care, the service would be billed under the supervising physician present and available during the encounter.  Documentation should indicate that the physician is actively involved in the course of treatment, and the physician should perform subsequent services at a frequency that reflects his/her participation with the plan of care.

The Office of Inspector General (OIG) added “incident to” billing back onto its annual Work Plan in 2012 after a brief hiatus.  The OIG has determined that these services have a higher error rate than that for “non-incident to” services.  The OIG and CMS can identify audit targets based on studying billing patterns, conducting time studies, and in volume analysis.  If there are 50 E&Ms billed on a particular day (by one physician) which equate to 21 hours based on the time associated with each code, this would raise a flag for “incident to” billing.

So, if you are considering billing “incident to” in order to capture 100% of the MPFS for services rendered, be sure to have adequate and appropriate documentation to support compliance with each of these requirements. 

Sources:  Medicare Benefit Policy Manual, Chapter 15, Section 60; MLN SE0441; www.ngsmedicare.com, https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c15.pdf, https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/se0441.pdf