Incident To and NP Reimbursement

Our thanks to Linda Carlson, MS, CPNP, Colleen Kochman, MSN, CPNP and Ann Sheehan, MA, CPNP for providing the answers to these questions. (Updated 7/24/08)

Question: What does it mean when an NP bills "incident-to" and what are the restrictions of this type of billing?

Answer: The term "incident-to" refers to a billing mechanism, as defined by Medicare. It allows a nurse practitioner (NP) to bill for services under a physician’s National Provider Identification number (NPI) at 100% reimbursement, if the provided service meets the restrictive “incident-to” requirements. These restrictions include:

1. The service must be performed under a physician's "direct personal supervision," which is defined by Medicare as the physician being present in the office suite and immediately available to provide assistance and direction to the NP while performing the “incident-to” services.
2. The service provided must be "an integral, although incidental part of the physician's professional service" meaning that a direct, personal, professional service has already been furnished by the physician to initiate a course of treatment and the current “incident-to” service being provided by the NP is therefore an incidental part of the patient's treatment. This is usually a follow-up visit for a patient. The physician must "initiate the course of treatment" prior to any subsequent services being provided and billed for on an “incident-to” basis by the NP.
   • An NP can bill for these services under his/her own NPI number at 85% reimbursement, whether or not a physician is present on site. NPs are strongly encouraged to bill under their own NPI numbers rather than “incident to”, if at all possible, since their work is invisible to systems if billed “incident to” and the scope of practice is limited by the provisions stated here.
3. There must also be "subsequent services by the physician of a frequency that reflects his/her continuing active participation in the management of the course of treatment". Therefore, under the Medicare “incident-to” billing rules, the patient cannot see only the NP for all subsequent care. Continuing physician involvement in the patient's care must be documented.
   • In a clinic situation where several physicians and practitioners are working, Medicare recognizes and will pay for services where one physician orders the service and another one supervises the NP’s service. The same physician does not have to see the patient for ongoing management of care or supervise the NP.
4. The service provided by an NP who is an employee of the physician or clinic where the service:
   • was medically necessary.
   • is Medicare covered.
   • is commonly provided in that physician’s office or clinic.

Question: Do these “incident-to” rules mean that an NP cannot see an established patient for a new diagnosis?

Answer: Medicare rules and regulations do not specifically address this issue. This may depend on your state's scope of practice for NPs, as Medicare's rules and regulations do allow for payment of NP services authorized by state law. For additional information on this issue, see the website www.cms.hhs.gov.

Given the many restrictions of “incident-to” billing, it may not be worth the risk of exposing your practice to a Medicare audit and possible fines for the 15% difference in the reimbursement by billing under the “incident-to” guidelines. At 85% reimbursement, NPs can bill for any services provided and authorized by state law, without regard to physician presence or the status of the patient as either new or established, as long as they are not bundled into a facility or other provider fee under Medicare Part A.

Medicare provides coverage for people 65 and older and for certain disabled people. Therefore, most PNPs do not typically provide services to Medicare patients. It is important to realize that Medicare rules and regulations apply to Medicare billing only and are not transferrable to other insurers. Following Medicare’s lead, “incident to” billing has been instituted by some commercial insurance companies. These insurers have their own unique written policies regarding NP billing. There are many insurance companies that do not have any written guidelines for NP billing.

There are several resources available to you regarding NP reimbursement. Your state NP organization, nursing organization or specific insurance company guidelines are your best resources for specific NP billing guidelines. NAPNAP has a Position Statement titled “Reimbursement for Nurse Practitioner Services” which can be viewed online. The Multi State Reimbursement Alliance has been working on reimbursement issues for NPs. Information on this group’s work can be found at http://www.oaapn.org/apn_multi_state.php.