Incident-to Billing Revisited: Chasing the 15%
Written by: Shannon O. DeConda | NAMAS, a division of DoctorsManagement, LLC
Incident-to billing, as defined by the Centers for Medicare & Medicaid Services (CMS), has long been both a point of interest and a source of confusion among healthcare providers. For many years, the prevailing advice among compliance experts has been to exercise caution or refrain from incident-to billing altogether because of the substantial risk of errors, overpayments, or audits. This cautious approach makes sense in a regulatory environment that prioritizes meticulous documentation, insists on strict supervision rules, and sets clear boundaries on which services qualify. However, with repeated reductions in reimbursement rates, some physicians are finding that the 15% margin gained by billing incident-to may help mitigate financial pressures, allowing them to sustain staffing, maintain services for their patients, and ultimately keep their practices viable. It is this changing environment that is prompting a more nuanced discussion: perhaps there is a place for incident-to billing in clinics that have strong compliance protocols, especially when patient visits revolve around ongoing maintenance rather than acute, unpredictable issues.
Before understanding why a practice might revisit incident-to billing, it helps to briefly review the fundamentals of how it works. Incident-to billing essentially allows an NPP—such as a Physician Assistant, Clinical Nurse Specialist, Clinical Psychologist, Clinical Nurse Mid-Wife, Certified Nurse Anesthetist, Licensed Clinical Social Worker, or Nurse Practitioner—to provide a service that is part of a plan of care established by the supervising physician. If the practice meets specific criteria, which include direct supervision requirements and use of a physician’s preexisting treatment plan, the billed services are reimbursed at 100% of the physician fee schedule instead of the usual 85% for NPPs. These strict criteria generally mean the physician must be present in the office suite and immediately available during the patient visit, the patient must have a problem or diagnosis that has been addressed by the physician previously, and any new issues or significant changes in condition typically require the physician’s direct involvement before NPPs can resume follow-up care incident-to. For years, many have discouraged pursuing incident-to billing due to the complexities of these rules and the high stakes of non-compliance. A single mistake, such as the supervising physician not being physically present, can invalidate the claim, and an audit revealing a pattern of incorrect claims could lead to expensive recoupments or worse. Practices were, and still are, rightly concerned that the potential gain of 15% might not be worth the headache and risk unless they have robust systems in place to ensure compliance.
Nevertheless, the financial landscape of healthcare continues to evolve. Reimbursement cuts increased administrative burdens, and higher overhead costs are forcing physicians to make critical decisions to sustain their practices and continue providing patient care. That additional 15% margin can help offset some of these challenges, and for some specialties, it may represent the difference between supporting a sufficient number of NPPs and having to limit services or reduce staff. The key is not to abandon compliance standards but to integrate incident-to billing into an overall practice strategy that is both thorough and methodical.
Remember, incident-to pays at 100% because the NPP’s service is integral to the physician’s overall care, as the NPP is simply following and maintaining the treatment plan established by the physician. This distinction accounts for the 15% difference in reimbursement, given that the incident-to service is deemed a direct component of the physician’s core service.
The practices most likely to succeed with incident-to billing are those that see patients primarily for maintenance or stable conditions, where the plan of care can be laid out in a forward-thinking manner. For example, in specialties such as rheumatology or pain management, patients return regularly for medication adjustments and long-term monitoring of chronic conditions. In these scenarios, the physician can create an adaptable treatment plan that contemplates different patient responses and potential next steps, all within clear bounds that the NPP can follow.
Rheumatology or pain management offices, on the other hand, often treat long-term conditions that do not fluctuate dramatically from visit to visit. A typical plan might read: “Begin medication X, schedule a follow-up in six weeks, and if symptoms have not improved or the patient’s condition is not at goal, then increase the dose and refer the patient to physical therapy. Should the patient’s symptoms worsen beyond that point, please return the patient to me for reconsideration of the treatment plan.” This is precisely the type of language that can maintain compliance with incident-to rules. The physician is laying out a clear pathway and anticipating what happens if the patient does not improve within a certain timeframe or if a particular intervention fails. As long as the NPP follows this predetermined plan, and the supervising physician is on-site and readily available, the encounter can qualify for incident-to billing. If the patient’s situation deviates from the expected trajectory, the patient would need direct physician evaluation, thereby removing that visit from the incident-to realm.
Contrast that model with other specialties, such as dermatology or general pediatrics, where it is more common to have patients present with unexpected acute issues or multiple complaints during the same visit. In these specialties, incident-to billing is not met as each new complaint would not have a plan of care that was established by the physician for the NPP to follow. A dermatology patient might come in for follow up care, but then mention a suspicious mole, and then also ask about a rash, each of which, beyond the follow up care, requires new treatment plans for incident-to guidelines to be met. Similarly, a pediatric patient might arrive with flu-like symptoms or an ear infection that was not part of any previous plan. In these cases, the service no longer qualifies as incident-to because the problems are new or significantly different from the previously established treatment plan(s).
Implementing these strategies successfully requires a deep commitment to compliance. Practices need established protocols to ensure that each patient seen incident-to by an NPP has a previously documented plan of care. The NPP plays a central role in compliance success: they must verify a supervising physician is physically present and immediately available, review the existing treatment plan to confirm the patient’s condition aligns with the physician’s treatment plan, and recognize if the episode of care deviates from that plan. When deviations occur, the NPP must know precisely when to direct the patient back to the physician for revalidation of the treatment plan. Additionally, the NPP must communicate through the EMR or with the billing team to determine whether services should be billed incident-to or direct-billed. Meanwhile, office managers or compliance officers should create written protocols and compliance policies related to incident-to services. Beyond these protocols, continuous education for all team members is vital. Physicians must understand how to establish robust treatment plans and NPPs trained on when to refer patients back for direct care along with incident-to vs. direct-billing. Practice administrators and billing specialists should be well versed in CMS and other payor regulations and guidance. Finally, regular internal or external audits help detect and address errors before they lead to more serious compliance issues.
Despite all these considerations, practices should still weigh the benefits and potential pitfalls carefully. Some physicians will conclude that the risk of error and the added administrative burden of ensuring proper supervision and documentation continue to outweigh the financial benefits. Others may find that, with the right specialty focus and patient population, incident-to billing is indeed a way to preserve practice revenue without compromising care or compliance standards. As healthcare continues to evolve, and as reimbursement models adapt, it is wise for practice leaders to re-evaluate previous stances on incident-to billing. When used in appropriate contexts, and accompanied by comprehensive training and rigorous oversight, incident-to billing may be a viable option for some organizations. Ultimately, the key is not to take a blanket stance but to understand the specific needs and capabilities of the organization, the nature of patient encounters, and the willingness of the entire staff to maintain strict adherence to CMS and payor rules.
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About the Author:
Shannon O. DeConda, CPC, CPMA, CEMA, CEMC, CPA-EDU | Certified Instructor
President, NAMAS, a division of DoctorsManagement, LLC
VP of Regulatory Compliance, DoctorsManagement, LLC
Ms. DeConda has devoted her entire career to healthcare, starting as a front-desk receptionist and progressing through roles in medical assisting, respiratory therapy, practice management, billing and denials support, and in-office coding, auditing, and education.
In 2007, she founded the National Alliance of Medical Auditing Specialists (NAMAS)—the first organization to formally educate medical auditors and the original creators of the CPMA credential. Today, as President of NAMAS and as the VP of Regulatory Compliance with the parent company, DoctorsManagement, Ms. DeConda continues to elevate industry standards, providing essential resources and training to healthcare professionals nationwide.
