Ancillary Staff vs. Reimbursable Providers: Navigating CMS and Commercial Payor Rules

Are You Billing Ancillary Staff Correctly? Avoid Costly Errors

Ancillary or Reimbursable? Why the Distinction Matters More Than Ever

Written by: Sean Weiss   |   DoctorsManagement, LLC

One of the biggest issues I address weekly for clients and law firms across the country is the use of “ancillary staff” vs. “reimbursable providers”. In the current environment, ensuring appropriate revenue generation while maintaining compliance requires clear understanding of who can bill for services, and at what rate. The Centers for Medicare & Medicaid Services (CMS) and commercial insurers draw sharp lines between “ancillary” staff whose work is bundled into most service fees, and “reimbursable” practitioners whose professional services generate separate payments. 

“Ancillary Staff” 

CMS Definition: Under Medicare, ancillary staff perform supportive services that facilitate patient care, but do not themselves qualify as independent billers. CMS categorizes these individuals as “auxiliary personnel”—for example, medical assistants (MAs), licensed practical nurses (LPNs), and clinical technicians (42 C.F.R. § 410.26 (a)(1)). Their activities (e.g., taking vital signs, drawing blood) are considered part of the overall services. 

Commercial Payors: Most private insurers mirror CMS: they generally DO NOT pay separately for ancillary staff services. Instead, ancillary services are included in the facility or practice’s administrative overhead or embedded in the professional provider’s fee. 

 

Who Qualifies as a “Reimbursable Provider”? 

CMS Eligible Providers: Medicare pays professional fees only to recognized “providers” or “suppliers,” such as: 

• Physicians (MD, DO) 

• Physician Assistants (PAs) 

• Nurse Practitioners (NPs) 

• Clinical Nurse Specialists (CNS) 

• Certified Nurse Midwives (CNM) 

• Clinical Psychologists and Clinical Social Workers (for mental health services) 

Only these licensed practitioners may bill Medicare directly for evaluation and management (E/M) services or procedures under their own National Provider Identifier (NPI). 

Commercial Payors: The list of reimbursable providers is broader—sometimes including Registered Nurses (RNs) for triage calls, health coaches for specific wellness programs, or pharmacists for certain medication therapy management services—depending on contract language and state scope-of-practice rules. 

 

Incident-To Billing: Incident-to billing (Medicare Benefit Policy Manual, Chapter 15, § 60) permits a non-physician practitioner’s services to be billed under a physician’s NPI (at 100% of the physician fee schedule) when: 

1. Physician Established Plan of Care: The physician personally performed the initial visit and established a treatment plan. 
2. Direct Supervision: The physician is present in the office suite and immediately available to provide assistance. 
   1. Direct supervision means, except as provided in paragraphs (a)(2)(i)1 and (ii) of this section, the level of supervision by the physician (or other practitioner) of auxiliary personnel as defined in § 410.32(b)(3)(ii)2. For the following services furnished after December 31, 2025, the presence of the physician (or other practitioner) required for direct supervision may include virtual presence through audio/video real-time communications technology (excluding audio-only): (42 CFR 410.26(a)(2)) 
      1. (i) Services furnished incident to the services of a physician or other practitioner when provided by auxiliary personnel employed by the billing practitioner and working under their direct supervision and for which the underlying Healthcare Common Procedure Coding System (HCPCS) code has been assigned a PC/TC indicator of `5′.
      2. (ii) Office or other outpatient visits for the evaluation and management of an established patient that may not require the presence of a physician or other qualified health care practitioner. 
3. Commonly Provided Services: The ancillary tasks are integral, although incidental to the physician’s professional service (e.g., dressing changes, injections). 
4. Employment Relationship: The individual furnishing service must be an employee, leased employee, or independent contractor of the physician’s group. 

 Why It Matters: 

• Higher Reimbursement: Services billed “incident-to” a physician receive 100% of the physician fee schedule versus 85% of the physicians allowed fee schedule if billed under the NPP’s NPI. 
• Compliance Risks: Failure to meet any of the criteria – especially direct supervision or initial visit requirement – can lead to recoupment and False Claims Act exposure. 

 Split/Shared Visits: A New CMS Opportunity: Effective January 1, 2022, CMS allows split/shared E/M visits with more stringent requirements. Under this policy (Medicare Program; CY 2022 PFS Final Rule), a visit may be billed under the physician’s NPI if both the physician and a qualifying non-physician practitioner (NPP) each personally perform substantive portions of the encounter on the same calendar day, and one of them furnishes the substantive portion—either history/physical exam or medical decision-making. 

 Key Points: 

• Substantive Portion: The provider who performs the medical decision-making (MDM) or, if MDM is not all that is applicable, the history/exam portion, and greater than 50% of the documented time is what drives the service. 
• Documentation Requirements: Both practitioners must document their portion in the medical record. 
• Commercial Payors: Many private insurers have followed CMS’s lead, but some still limit split/shared billing to hospital settings or do not recognize it at all. Always verify your contract. 

Ancillary Staff in Telehealth and College of Codes 

Telehealth “Virtual Rooming”: During the COVID-19 Public Health Emergency, CMS temporarily (under the 1135 waivers) allowed clinical staff to perform “rooming” tasks—taking vitals, updating medication lists prior to a telehealth encounter, but only under direct supervision and when billed by the physician. Although these waivers have expired, CMS and many commercial payors continue to permit similar workflows in their telemedicine guidelines. 

 Coding Considerations: 

• Unbundling Risks: Billing separately for ancillary tasks (e.g., CPT® 99211 for a nursing visit) when no physician oversight exists can lead to significant problems. 
• Modifier Usage: Incident-to services and split/shared visits require specific modifiers (e.g., modifier “SA” for split/shared under Medicare) to distinguish them from fully physician-performed visits. 

 

Practical Tips for Compliance 

1. Audit Staff Roles: Maintain clear job descriptions differentiating ancillary staff duties from those requiring licensed providers. 
2. Incident-To Training: Educate both clinical and billing teams on the strict criteria for incident-to billing—especially direct supervision and initial visit requirements. 
3. Document Split/Shared Visits: Implement chart templates that prompt both provider and NPP to capture their substantive portions. 
4. Review Commercial Contracts: Understand each payor’s stance on incident-to and split/shared billing to avoid denials. 
5. Regular Audits: Conduct periodic internal reviews of incident-to and split/shared claims to catch compliance gaps before external auditors do. 

 The key to compliance is to understand the roles of your ancillary staff and what services they can engage in that are reimbursable provider services. Avoiding incident-to billing pitfalls and understanding CMS’ guidelines and those for split/shared visit requirements, and payor-specific policies, healthcare organizations can ensure compliance and capitalize on lawful reimbursement. In a landscape where every dollar counts, and every audit matters, this nuanced understanding is an operational imperative. 

 

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About the Author: Sean Weiss

Sean has dedicated his more than 25 – year career to helping healthcare facilities reduce the risk of noncompliance and achieve measurable financial results. An accomplished compliance and management professional, Sean has extensive knowledge of the inner workings of government agencies at both the federal and state level, including the Office of Inspector General, Department of Justice and The United States Attorney’s Office.