Medicare permits a physician to bill for certain services furnished by a nurse practitioner or other auxiliary personnel under what is referred to as the "incident to" billing rules.  The "incident to" rules permit services or supplies 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 to be reimbursed at 100% of the physician fee schedule, even if the service is not directly furnished by the billing physician.

A significant requirement to permit the services of physician extenders to be billed as "incident to" services requires direct personal supervision by the physician. The supervising physician does not necessarily need to be present in the room where the procedure is being performed.  The “direct supervision” standard requires the supervising physician be “physically present in the office suite and immediately available to furnish assistance and direction” during the time the auxiliary personnel is providing the service. 

The 2016 Medicare physician payment rule provided some clarification on how the direct supervision requirement under the “incident to” billing rules operates.  The new rule clarifies that the physician who directly supervises the applicable auxiliary personnel is the only party that can bill the service of the auxiliary personnel as “incident to” his or her service.  CMS considers this a clarification of its longstanding policy, but many providers will see this as a new restriction on the application of the “incident to” rules.

To understand the significance of this “clarification,” it is useful to note that more than one physician is often involved in the care of a patient.  It is not uncommon for one physician to visit the patient and order a test or procedure that is then supervised by another physician.  Prior to this “clarification,” the physician who originally ordered the service might have billed the service as “incident to” even though another physician actually supervised the performance of the service.  The revised regulatory language clarified this is not permitted and that only the physician actually present in the office suite who supervises the service can bill for the service as “incident to” their service.  When making a claim for services billed “incident to” a physician’s services, the billing number of the physician that actually supervises the performance of the service must be used rather than that of the ordering physician.

CMS clarifies the reasoning behind this rule as follows: “[B]illing practitioners should have a personal role in, and responsibility for, furnishing services for which they are billing and receiving payment as an incident to their own professional service.”

In view of this regulatory clarification, providers may wish to reexamine their billing process and procedures to clarify the correct billing for “incident to” services.  Staff should also be trained on the proper supervision of services billed under the “incident to” rules.