Mythbusting the incident-to rules for PAs and NPs

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Female on computer

MYTH = All insurers and payors follow incident-to rules.
MYTH = PAs and NPs cannot get paid 100% reimbursement for seeing a Medicare patient.
MYTH = PAs and NPs cannot see new Medicare patients.
MYTH = PAs and NPs must have the physician on site at all times to see any Medicare patient.
MYTH = Incident-to billing applies to all sites of service including hospital settings.

Since the creation of incident-to billing for non-physician providers (Physician Assistants – PAs, Nurse Practitioners – NPs) by the Centers for Medicare and Medicaid Services (CMS), there has been significant confusion regarding proper billing and reimbursement for claims. I have often referred to the concept of incident-to billing as the most misunderstood and misattributed billing issue for PAs and NPs, hence the multiple MYTHS applied to this concept above.

Within the Medicare reimbursement system, PAs and NPs are reimbursed at an 85% rate when billing under their own provider number. Incident-to was developed as a mechanism to allow physician/midlevel teams to capture 100% reimbursement if specific clinical and documentation conditions are met.

Following the 3 S system will ensure your success in following the rules.

An incident-to claim is an outpatient claim, which is for a Medicare patient. There is no such thing as incident-to billing for Blue Cross Blue Shield or Aetna. In addition, to bill incident-to, the physician must be physically present at the time of service when the patient sees the PA or NP. If the PA or NP sees the patient and the physician is not present, they will bill under their own number at 85%.

SELECTION of Provider
Incident-to claims are billed under the physician number at 100%. If you are billing a PA or NP claim under their own provider number, they will be reimbursed at 85%.

Incident-to claims must be for an established patient, seen in the past by the physician, with an established plan of care.

For example:
Dr. Jones sees Mrs. Smith for evaluation of hypertension. He starts her on medication, educates her about lifestyle modification and recommends her to follow up with PA Ford in 1 month. He documents a clear plan of care and recommends future labs.

In one month, PA Ford and Dr. Jones are both busy seeing patients in clinic. PA Ford sees Mrs. Smith that day for follow up of hypertension, refills her medication and orders her follow up labs. This could be billed as an incident to visit. However, if at the end of the follow up visit, Mrs. Smith says to PA Ford, “Oh, by the way… I fell last night in the bathroom and my left shoulder is sore. While I am here, could you examine it?” Now – there is a new problem. PA Ford may then either:

Examine, evaluate and treat the shoulder – including ordering any pertinent tests or x-rays – and then bill that visit under her own provider number – and get 85% reimbursement.
Wait for Dr. Jones to step out of a patient room, have him come in and see Mrs. Smith and document an evaluation and treatment plan, and then the visit may be billed incident to at 100% reimbursement.
Often, the realities of clinical patient care demand efficiency and it is not effective for patient or provider to consistently adopt scenario #2 outlined above. Therefore, we often advise that practices and physicians will realize maximum cost effectiveness when allowing the PA or NP to see patients pursuant to their scope of practice, and encourage billing under their own provider number, regardless of payor.

Audits of Medicare charts are ever increasing and adherence to these rules and conditions must be clearly documented to ensure compliance. Auditors may or may not be clinicians, and it must be apparent from the documentation in the medical record which provider performed which service(s). In addition, Medicare guidelines specify that “coverage is limited to the services a PA or NP is legally authorized to perform in accordance with state law.” Considering that the Health and Human Services Office of the Inspector General (OIG) plans to scrutinize incident-to services as referenced in the 2012 Work Plan, it is even more critical to fully understand and comply with these guidelines for incident-to billing.

About the Author: Lisa P. Shock, MHS, PA-C, is a seasoned PA who has practiced in primary care and geriatrics since her days at the Duke PA program in the late 90s. She enjoys part time clinical primary care practice and is the President and CEO of Utilization Solutions in Healthcare – a specialty consultant company for physician practices and hospitals, offering a wide range of services to help implement and improve upon the utilization of PAs in the health care system. Contact her with questions at

References: Section 60, p. 79.

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