Auditing with confidence: Incident-to services

In performing hundreds of audits over the years, I’ve found that one issue that continues to cause a huge concern — and often large paybacks to Medicare — is the process of billing for incident-to services.

Put simply, this concept allows a nonphysician provider (NPP) — such as a nurse, medical assistant, lab technician or psychologist — to see a patient under the guidance of an MD or DO and continue his or her established treatment plan. If all services are performed correctly, the treatment may be billed to Medicare under the name of the physician who provided the supervision on the date of service.

The Centers for Medicare & Medicaid Services (CMS) has established a comprehensive set of rules that must be followed for services to be eligible for incident-to billing. They include:

• The services are an integral, although incidental, part of the physician's professional service.
• The services commonly are rendered without charge or included in the physician's bill.
• The services are of a type commonly furnished in physicians' offices or clinics.
• The services are furnished under the physician's direct personal supervision and are furnished by the physician or by an individual who is an employee or independent contractor of the physician. Direct supervision does not require the physician's presence in the same room, but he or she must be present in the same office suite and be immediately available.
• The physician must perform the initial service and subsequent services of a frequency that reflects his or her active participation in the management of the course of treatment.
• The physician or other provider under whose name and number the bill is submitted must be the individual present in the office suite when the service is provided.

Bear in mind, the term “incident to” was developed by CMS and is strictly related to services rendered to a patient who is covered by Medicare. These rules relate to CMS services only. Private payers may use a similar term, and it is the responsibility of the practice to know the rules associated with each individual private plan as it relates to the concept of nonphysician provider (NPP) services. A practice bills using the NPP Medicare provider number for services that the NPP performed, that falls outside the scope of this scenario.

Given these rules, one can safely assume the following statements regarding billing for incident-to services:

• The NPP may not see new patients.
• When seeing an established patient with a new problem, the NPP may not establish the new treatment plan. The new treatment plan must be established by the MD/DO.
• This concept applies to office visits, not inpatient services.

Ensuring compliance

Under these guidelines, your practice can be reimbursed at 100% of the physician fee schedule for NPP services. However, failure to follow the rules closely could mean losing tens of thousands of dollars each year. Conducting an audit to ensure compliance with incident-to rules can help save your practice from this fate, but it can be challenging. I recommend taking the following questions and factors into account as you prepare to perform this important task.

Can a report be generated through the billing software that will identify these services?
The claim will have the MD/DO name or a group name and the services that were provided by the NPP. Consider: How was this information conveyed in the system at the time of service? Will the billing software be able to identify the NPP by name if there are multiple NPPs in the practice?

Will auditing one note from one date of service from one patient be sufficient to determine that the rules have been met?
No; this should not be considered sufficient evidence that the rules have been met. To truly confirm all the rules have been met, a chart audit would need to be performed. Auditing multiple notes from one patient would allow for confirmation that the original plan of care was established by the physician and that the physician provided subsequent services.

What items should the audit review?
Each item noted is equally important, and the audit could reflect a variance in any one area and it would not affect the other items. 

• Determine if the CPT code(s) billed was supported in the documentation and all guidelines were followed.
• Determine if the diagnosis code(s) billed was supported in the documentation and all guidelines were followed.
• Determine if the following factors were supported in the documentation to confirm that the rules of incident to were met:
  • The patient was an established patient.
  • The condition(s) addressed in the encounter was previously established and no new treatment plan was created.
  • If the patient presented with a new problem or if the existing condition required a new treatment plan, confirm that:
    • The physician did see the patient and provided documentation to support that the new condition(s) was addressed, and the new treatment plan was established by that physician.
    • The treatment plan was created by the physician.
    • The physician continued to have subsequent visits with the patient.

Additional actions to consider:

• Review contracts with private payers for any rules concerning incident-to billing.
• Consult the Medicare Administrative Contractor for the state where the NPP services will be rendered for any unique guidance, especially concerning any signature requirements by the MD/DO.
• Review the scope of service for NPPs within the state where services will be rendered.
• There are still gray areas within these rules, which provides a good opportunity for your practice to establish its own policies that specify:
  • How often the MD/DO should provide subsequent visits.
  • How to manage the MD/DO patient schedule when supervising an NPP.
  • How to ensure that new patients are not assigned to NPPs.