Changes in Medicare's "Incident to" Rules
By: DAVID M. GLASER
Spring 2002
In the new Medicare fee schedule for 2002, the Centers for Medicare and Medicaid Services (CMS) made a major change to the rules governing billing for services "incident to" a physician's services. Now, when using the "incident to" benefit, services must be billed under the name and UPIN of the physician who is supervising the service.
There are several requirements to bill for services incident to a physician's service. First, a physician must have provided an initial service to the patient for the illness or injury for which the incident to service is provided. Historically, many Medicare carriers, including the carrier in Minnesota, have allowed nurse practitioners (NPs) and physician assistants (PAs) to bill incident to for minor new problems of an established patient, such as a cold or the flu, even if the attending physician had not treated the patient for the new minor illness. The Medicare Carriers Manual is ambiguous. Therefore, you should review your carrier's policy manual to determine your carrier's current policy. If the service does not qualify under the incident to rules, the NP or PA can bill independently and receive 85% of the physician fee schedule, if the NP or PA is independently credentialed with Medicare.
In addition to having an initial physician encounter, there must be a physician in the office suite whenever services are provided incident to a physician's services. The physician who provides the required supervision need not be the same as the physician who provided the initial service. In fact, the supervising physician need not even be in the same specialty as the patient's attending physician; for example, an oncologist can supervise physical therapy services. The supervising physician and the attending physician must simply be in the same group.
In the past, one of the biggest Medicare myths was that practices were required to bill services under the name of the supervising physician. In fact, there was no such requirement; services could be billed under the name of either the attending or the supervising physician. However, the 2002 Medicare fee schedule included a new requirement that all services incident to a physician's services be billed under the name and UPIN of the supervising physician. This change is likely to cause administrative problems. Clinics will need to determine what physician is present when a particular service is provided, and patients will get bills naming physicians that the patient may not recognize. This is likely to prompt calls from patients worried they have been billed improperly, but CMS has given no indication that the rule will be revised.
Perhaps the most poorly understood limitation on the use of "incident to" billing is that it cannot be used if services are performed in a hospital or skilled nursing facility (SNF). Medicare takes the position that the hospital facility fee and the SNF's prospective payment include payment for all nursing services. While the logic backing this position is questionable, when a nurse, NP, PA or other professional provides assistance to a physician in the inpatient or outpatient hospital environment, or in the SNF, only work performed by the physician should be used to determine the level of service provided.
For example, if a nurse does rounds with the physician, taking the history and performing part of the exam, the physician should only bill for the portions of the exam the physician performed, and for the history that the physician actually reviewed. In short, services by non-physicians in the hospital or SNF are like services performed by a resident; for purposes of billing, it is as if those services were never done.