How to Do Incident-To Billing Right and Avoid Costly Mistakes

Navigating incident-to billing can feel overwhelming, but understanding it is essential for maximizing reimbursements and avoiding costly audits. This Medicare billing approach lets you receive 100% of the physician fee schedule—but only if done right. Ready to master incident-to billing like a pro? Let’s dive in.

Key Takeaways:

Incident-to billing allows practices to bill Medicare at 100% of the physician fee schedule.
A physician must create an initial care plan and provide direct supervision during follow-ups.
Rules vary by state and payer, so check your contracts and laws before billing.
Common pitfalls include billing for new problems and misunderstanding supervision requirements.
Proper documentation is crucial to avoid audits and ensure compliance.

What Is Incident To Billing (and Why Should You Care)?

At its core, incident-to billing refers to services or supplies performed as an integral but incidental part of professional services provided by a doctor during the diagnosis or treatment of an illness or injury. Translation? You’re billing for services in which the doctor has played a key role—either directly or through setting up the care plan.

The benefit? Incident-to billing allows reimbursement at 100% of the physician’s fee schedule. Without it, services provided by physician assistants (PAs) or nurse practitioners (NPs) are reimbursed at only 85%. That’s a big difference for your bottom line!

But—and this is a huge but—Medicare and other payers have strict requirements for when and how you can bill incident to. Mess it up, and you risk audits, clawbacks, and major headaches.

Rule #1: Know Your Payer Requirements for Incident To Billing

Before you even consider using incident to billing, you need to know your payer’s rules. Medicare sets the gold standard for incident-to billing guidelines, but commercial payers often tweak these rules. That means it’s critical to check with:

Your provider relations team
Insurance contracts
Your state’s laws

Remember, what works for Medicare might not fly with a commercial insurer. And state laws regarding supervision of PAs and NPs can vary widely, which also impacts your ability to bill incident to.

Rule #2: The Doctor Must Have Face-to-Face Contact First

Here’s where many practices go wrong: To use incident-to billing, the physician must conduct the initial face-to-face encounter with the patient and establish a care plan. This isn’t optional—it’s a dealbreaker.

So, what does this mean in practice?

The doctor sees the patient first, develops a treatment plan, and documents it.
Auxiliary personnel (like a PA or NP) can follow that care plan for subsequent visits.

If a PA or NP sees a patient for something outside of the established care plan, incident-to billing cannot be used.

Rule #3: The Doctor Must Provide Direct Supervision

Another major requirement for incident-to billing is direct supervision. Here’s what that looks like:

The doctor must be physically present in the office suite while the PA or NP sees the patient.
They don’t need to be in the same room but must be available if needed.

This is Medicare’s definition, and it applies to most situations. If the supervising physician isn’t on-site, incident-to billing is off the table.

Pro tip: There are also situations where general supervision may apply, but this is more common for chronic care management patients. Make sure you know when each type of supervision is allowed.

Why State Laws Matter for Incident-To Billing

Here’s where things get even trickier: State laws. Across the U.S., the requirements for supervising PAs and NPs vary. For example:

Some states require NPs to be supervised by a physician.
Other states allow NPs to operate and practice independently.

So, if you’re in a state where NPs can work independently, you may not even be able to use incident-to billing for their services.

See why it’s so important to double-check your state’s laws and payer contracts?

Common Scenarios for Incident-To Billing

Incident-to billing is more commonly used in specialty practices (think oncology, cardiology) than in primary care. Here’s why:

The doctor often sets up a complex care plan during the initial visit in specialties.
PAs or NPs then follow that care plan during follow-up visits.

For example:

Scenario	Can You Bill Incident To?
Initial visit with doctor	No, because the doctor is providing the service.
Follow-up visits with PA	Yes, if the PA is following the care plan and the doctor is on-site.
New condition addressed by PA	No, because it’s outside the original care plan.

Primary care providers may use incident-to billing as well, but it’s typically less common. The rules for supervision, care plans, and payer guidelines are just as strict in these settings.

Mastering Incident To-Billing—Avoiding Pitfalls and Maximizing Reimbursement

Alright, let’s keep this incident-to billing train rolling! By now, you’ve got a solid grasp of the basics—payer requirements, the face-to-face rule, direct supervision, and state-specific laws. But there’s still a lot to unpack to make sure you’re squeezing every penny out of this billing method without falling into any traps.

Let’s dive into common pitfalls, real-world examples, and some juicy details on reimbursement strategies to make sure you’re doing it right.

Pitfall #1: Billing Incident-To for New Problems

One of the most common mistakes practices make with incident-to billing is trying to bill it for new or unrelated conditions. Let me be super clear here: incident-to billing is only allowed for services tied to the original care plan created by the doctor.

For example:

✅ Correct: A PA sees a patient for diabetes management, following the care plan the physician initially developed.
❌ Incorrect: A PA treats that same patient for a new rash or other unrelated issue.

When a patient presents with a new condition, the PA or NP’s services must be billed under their own National Provider Identifier (NPI), reimbursed at 85% of the physician fee schedule.

This is why detailed documentation is critical. You’ll need to clearly show that the services provided by the auxiliary personnel are part of the ongoing care plan and not a deviation.

Pitfall #2: Misunderstanding Supervision Requirements

Let’s revisit the direct supervision rule because this is another area where practices can slip up.

For Medicare, direct supervision means the physician must be in the same office suite—not the same room. That sounds simple, but here’s where people mess it up:

The physician steps out: If the doctor is out at lunch, running errands, or attending a meeting outside the office, you cannot bill incident to.
Remote offices: If your practice has multiple office locations and the supervising physician isn’t physically present in the same location as the auxiliary staff, you cannot bill incident to.

This rule also applies to telehealth visits. If the physician isn’t physically on-site during the telehealth service, incident-to billing doesn’t apply.

Reimbursement Strategies: Why Incident-To Can Be a Game-Changer

So, why all the fuss about incident to billing? Simple: Money.

When billed correctly, incident-to billing allows you to receive 100% of the Medicare Physician Fee Schedule for services performed by auxiliary personnel. Without it, services provided by PAs or NPs are reimbursed at 85% of the fee schedule.

Let’s crunch some quick numbers:

Service	Billed Under Physician	Billed Under PA/NP
Office Visit (Level 3)	$100	$85
Office Visit (Level 4)	$150	$127.50

If your practice provides dozens (or hundreds) of these services per month, that 15% gap adds up fast. This is why it’s worth taking the time to understand and implement incident-to billing properly.

Real-World Example: How Specialty Practices Use Incident-To Billing

Let’s talk about how incident-to billing plays out in the real world, especially in specialty practices.

Oncology Example:

A patient has an initial consultation with the oncologist, who creates a treatment plan for chemotherapy.
On subsequent visits, a PA sees the patient to monitor their response to treatment, manage symptoms, and ensure adherence to the plan.
Since the PA is following the oncologist’s care plan and the oncologist is in the building, incident-to billing applies.

Primary Care Example:

A family physician evaluates a patient with hypertension and creates a management plan.
During follow-up visits, a nurse practitioner monitors the patient’s blood pressure, adjusts medication as planned, and reports to the physician.
As long as the physician is in the office suite, the visits can be billed incident-to.

The Documentation Dilemma: Cover Your Tracks!

Here’s the golden rule for incident-to billing: If it’s not documented, it didn’t happen.

Medicare auditors are notorious for combining documentation to ensure compliance. To protect your practice, make sure you:

Clearly Document the Care Plan: The physician’s care plan must be outlined in the chart, with specific details on how auxiliary personnel should proceed.
Note Physician Supervision: Include documentation that the supervising physician was on-site during the visit.
Distinguish New vs. Ongoing Conditions: Clearly indicate when a service is part of the ongoing care plan versus a new problem.

Pro tip: Have regular internal audits to ensure your documentation is airtight. It’s better to catch mistakes internally than during a Medicare audit.

Why Commercial Payers Matter

While Medicare is the go-to reference for incident-to billing, many commercial payers follow similar rules. However, there are some key differences you need to be aware of:

Reimbursement Rates: Some commercial payers may reimburse differently for services performed by PAs/NPs.
Supervision Rules: A few payers might allow more flexibility with supervision requirements.
Contract-Specific Guidelines: Always check your payer contracts to ensure compliance.

How to Set Up an Incident To-Billing Workflow and Maximize Your Reimbursement

Now that you’ve mastered the theory behind incident-to billing, let’s talk action steps. Implementing incident-to billing in your practice doesn’t have to feel like rocket science. With the right workflow, you can keep things compliant, efficient, and profitable. Here’s how to set everything up for success.

Step 1: Establish Clear Roles in Your Practice

First things first, you need to define who’s doing what. Incident-to billing works best when every team member knows their role in the process:

Physician’s Role: The physician conducts the initial face-to-face visit, establishes the care plan, and provides supervision (direct or general, depending on the situation).
PA/NP Role: Deliver services

as per the physician’s care plan, document patient encounters thoroughly and ensure their scope of practice aligns with state laws.

Billing/Coding Team: Stay updated on payer-specific guidelines, verify documentation, and flag any visits that don’t meet incident-to billing requirements.

Having this clarity eliminates confusion and ensures compliance from start to finish.

Step 2: Build a Documentation Workflow

Documentation is your strongest defense against audits, so make it airtight. Here’s a simple workflow you can follow:

Physician Encounter: Document the initial face-to-face visit and create a detailed care plan. Make sure the plan outlines the patient’s condition, goals, and the specific steps auxiliary staff will take in follow-up visits.
Auxiliary Staff Notes: When PAs or NPs see the patient, their notes must clearly indicate they are following the established care plan. If the patient presents with a new issue, that must also be documented—and billed separately.
Supervision Verification: Use a sign-in sheet or digital time-tracking system to confirm the supervising physician was on-site during the visit.
Billing Checkpoint: Before submitting a claim, double-check that the documentation supports incident-to billing. Your billing team should verify that the physician’s NPI is used for claims that qualify.

Step 3: Train and Audit Your Staff

Staff training is key to implementing incident-to billing effectively. Consider these steps:

Initial Training: Educate your team on Medicare’s requirements for incident-to billing, including face-to-face encounters, supervision, and payer-specific nuances.
Ongoing Education: Medicare and payer rules can change. Stay ahead by scheduling regular training sessions for your team.
Internal Audits: Perform regular chart audits to ensure compliance. Flag visits that don’t meet incident-to billing criteria and adjust processes as needed.

Step 4: Use Technology to Your Advantage

If you’re not leveraging your EHR (Electronic Health Record) system to streamline incident-to billing, you’re missing out. Here’s how tech can help:

Templates: Create care plan templates within your EHR to ensure consistency and thoroughness.
Alerts: Set up alerts to remind your team when a physician’s supervision is required or if a visit doesn’t qualify for incident to billing.
Documentation Tags: Use tags or flags in your EHR to differentiate between visits that qualify for incident to billing and those that don’t.

Automation reduces human error and helps you maintain compliance.

Step 5: Evaluate Reimbursement Trends

Finally, keep a close eye on your reimbursement data. Compare how much your practice earns when billing under incident-to billing versus billing under auxiliary personnel directly. If you notice any discrepancies, dig into the details to uncover potential issues (like documentation errors or payer-specific rules).

Maximizing reimbursement doesn’t just happen—it’s a process of continuous improvement.

FAQ: Incident To Billing Made Simple

Still scratching your head about incident-to billing? Don’t worry—you’re not alone. Below, I’ve tackled some of the most frequently asked questions to clear up any lingering confusion and help you feel confident about using incident to billing in your practice.

What exactly is incident-to billing?

Incident-to billing refers to a Medicare billing rule that allows a physician to bill for services provided by auxiliary personnel (like a PA or NP) as part of the physician’s care plan. The kicker? When billed under the physician’s NPI, the practice gets reimbursed 100% of the Medicare fee schedule, rather than 85% when billed directly under the PA/NP.

To qualify, the services must meet specific requirements, like being tied to the doctor’s initial care plan, supervised appropriately, and performed in the correct setting.

Who can provide services under incident-to billing?

Services can be provided by auxiliary personnel, which includes professionals like:

Physician Assistants (PAs)
Nurse Practitioners (NPs)
Registered Nurses (RNs)
Certified Medical Assistants (CMAs)

However, they must act under the direct supervision of the physician, and their services must align with the care plan the physician created during the initial visit.

What’s the difference between direct and general supervision?

Direct supervision: The supervising physician must be physically present in the same office suite during the patient encounter. They don’t need to be in the same exam room, but they must be readily available if needed. This is the standard requirement for incident-to billing under Medicare.

General supervision: The physician doesn’t need to be on-site but must be available for consultation (e.g., by phone). This applies in certain scenarios, such as chronic care management, but it’s not typically allowed for standard incident-to billing.

Can a PA or NP see a patient for a new problem and still bill incident-to?

Nope! If a patient presents with a new issue that isn’t part of the existing care plan created by the physician, incident-to billing cannot be used. The visit must be billed under the PA or NP’s NPI, and reimbursement will be at 85% of the Medicare fee schedule.

The physician must perform a new face-to-face visit to create a care plan for the new problem before incident-to billing can resume.

Does incident-to billing apply in all states?

Yes, but state-specific laws on PA/NP supervision can impact how it’s implemented. For example:

Some states require PAs and NPs to work under direct supervision of a physician.
Others allow nurse practitioners to practice independently, meaning incident-to billing might not apply to NPs in those states.

Always check your state’s regulations and payer requirements before using incident to billing.

Can incident-to billing be used for telehealth services?

Not really. Medicare’s rules for incident-to billing require direct supervision, which means the physician must be physically on-site in the same office suite. Since telehealth services don’t happen in an office setting, they generally don’t qualify for incident to billing.

However, some commercial payers might have more lenient rules. Always check with your payer!

What documentation is required for incident-to billing?

Proper documentation is everything when it comes to incident-to billing. Here’s what you need to include:

Initial Care Plan: The physician’s face-to-face visit notes must outline the treatment plan.
Follow-Up Notes: Auxiliary personnel (e.g., PA/NP) must document how they’re following the established care plan.
Supervision Notes: Clearly indicate that the supervising physician was on-site during the visit.
Differentiation of Services: If a new condition arises, document it separately and bill under the appropriate NPI.

If your documentation is incomplete, you risk non-compliance during audits.

Can incident-to billing be used for hospital services?

No. Incident-to billing is only allowed for services provided in a physician’s office or clinic. It does not apply to hospital settings, skilled nursing facilities, or inpatient services.

For hospital-based services, auxiliary personnel must bill under their own NPI, even if they’re working under a physician’s supervision.

What are the financial benefits of incident to billing?

The main benefit is higher reimbursement. Medicare reimburses 100% of the physician’s fee schedule when billing incident to, compared to 85% when billing under a PA or NP’s NPI.

Here’s a quick comparison:

Service	Incident To Billing	Billed Under PA/NP
Office Visit (Level 3)	$100	$85
Office Visit (Level 4)	$150	$127.50
Annual Wellness Exam	$200	$170

If your practice sees a high volume of patients, that 15% difference can significantly impact your revenue over time.

What are the risks of incorrectly using incident-to billing?

Misusing incident to billing can lead to:

Audits: Medicare auditors love to check compliance with incident to billing rules.
Clawbacks: If your claims don’t meet the requirements, you’ll have to repay the reimbursements.
Fines: Repeated non-compliance or fraudulent billing practices can result in hefty fines and penalties.
Loss of Trust: Non-compliance can damage your relationship with payers, patients, and even your practice’s reputation.

That’s why it’s essential to follow the rules, document everything, and conduct internal audits regularly.

Do commercial payers follow Medicare’s rules for incident-to billing?

Many commercial payers base their guidelines on Medicare’s rules, but there can be differences. For instance:

Some payers may allow more flexibility with supervision requirements.
Others might have specific rules for billing under a physician vs. auxiliary personnel.

Always check your contracts and reach out to provider relations for clarification on incident to billing for commercial plans.

Wrapping It All Up

Incident-to billing can be a huge asset to your practice if you understand and follow the rules. While it may feel complicated at first, taking the time to master the requirements—such as the initial face-to-face visit, supervision rules, and detailed documentation—pays off with increased reimbursement and smoother operations.

Just remember: compliance is non-negotiable. A misstep here could trigger audits, repayment demands, and even penalties. But with a solid workflow, a well-trained team, and careful attention to payer requirements, you can confidently navigate the world of incident-to billing like a pro.