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Incident-To Billing

Incident-to billing allows non-physician providers to report services as if they were performed by a physician.  “Incident to” in medical billing refers to a situation where a non-physician healthcare provider, such as a nurse practitioner or physician assistant, provides services under the supervision of a physician. These services are billed under the physician’s National Provider Identifier (NPI) rather than the NPI of the non-physician provider.

Incident To guidelines

  1. Incident To billing applies only to professional services billed to Medicare.
  2. The service billed Incident to must take place in a non-institutional setting which the CMS defines as “all settings other than a hospital or skilled nursing facility”.
  3. Incident to services cannot be rendered on the patient’s first visit.  The physician must conduct an initial E/M service for the new condition, and must establish the diagnosis and plan of care.
  4. Subsequent to the encounter during which the physician establishes at a diagnosis and initiates the plan of care, an NPP (non physician provider) may provide follow-up care under the direct supervision of the qualified provider.

Direct Supervision in the office setting does not mean that the physician must be present in the same room with her or his side.  However, the physician must be present in the office suite and immediately available to provide assistance and direction throughout the time the aide is performing services.

If Auxiliary personnel perform services outside the office setting, eg., in a patient’s home or in an institution (other than hosptital or snf), their services are covered incident to a physician’s service only if there is direct supervision by the physician.  For eg., if a nurse accompanies the physician on house calls and administered an injection, the nurse’s services are covered.  If the same nurse made the calls alone and administered the injection, the services are not covered (even when billed by the physician) since the physician is not providing the direct supervision. 

  • A physician must actively participate in and manage the patient’s course of treatment. This requirement typically is defined by individual state licensure rules for physician supervision of NPPs.
  • Both the physician and the qualified NPP providing the incident to service must be employed by the group entity billing for the service.  If the physician is a sole practitioner, the physician must employ the NPP.
  • The incident to service must be of a type usually performed in the office setting, and must be part of the normal course of treatment of a diagnosis or illness. 

Once all the above criteria are met, services provided by non-physician healthcare providers can be billed as if they were performed by the physician directly, often resulting in higher reimbursement rates from payers such as Medicare.  Proper documentation of the supervision and involvement of the physician is essential to support billing “incident to” services.  

Reporting Incident to Billing

To ensure proper reimbursement according to the fee schedule, “incident to” services should be billed on the CMS-1500 Claim Form or electronic equivalent as follows:

Item 17 Enter the name of the physician or non-physician practitioner who performs the initial service and orders the non-physician service.

Item 17b Form CMS-1500 (08-05) – Enter the NPI of the referring/ordering physician listed in item 17 Effective May 23, 2007, 17a is not to be reported but 17b MUST be reported when a service was ordered or referred by a physician.

Item 24J Form CMS-1500 (08-05) – Enter the NPI of the rendering provider or the supervisor in the lower portion. Item 31 Form CMS-1500 (08-05) – Enter the signature of the rendering physician or nonphysician practitioner providing the service or providing direct supervision.

Item 31 Form CMS-1500 (08-05) – Enter the signature of the rendering physician or non-physician practitioner providing the service or providing the direct supervision.

Exceptions to “Incident to”

  • Services provided in hospital.
  • Diagnostic testing
  • Services rendered during the global period.

Documentation Requirements:

  • Services provided “incident-to” should be co-signed, even in an EMR, by forwarding the NPP’s documentation to the MD for review and co-signature. it is highly recommended that the supervising physician add a statement in the medical record: “I have reviewed and agree with the diagnosis and treatment plan for [patient].


  • An established Medicare patient experiencing acid reflux visits a gastroenterologist at her private practice. The doctor prescribes medication and schedules a follow-up visit in a week.

In Scenario A, the Medicare patient returns for the follow-up and is seen by a nurse practitioner, who is supervised and follows the care plan established by the practice’s gastroenterologist. The nurse practitioner records the patient’s progress, the absence of new complaints, and the supervising physician’s presence in the office suite. This visit may qualify for incident-to-billing if all Medicare requirements are fulfilled, enabling the clinic to be reimbursed at 100% of the Medicare physician fee schedule.

In Scenario B, upon returning for the follow-up, the Medicare patient informs the nurse practitioner of a new complaint unrelated to acid reflux. The nurse practitioner, if qualified, can address the new complaint and outline a new treatment plan. However, incident-to-billing cannot be used for this visit that addresses a new complaint. The clinic must bill Medicare under the nurse practitioner’s NPI, resulting in the clinic being eligible to collect 85% of the Medicare physician fee schedule.

How Incident-to Policies May Vary by State and Plan

  • Commercial payers and other non-Medicare payers may vary in their requirements that the NPP be credentialed by the payer. It’s essential that practices who bill using incident-to recognize and meet the specific requirements of each payer. 


  • Compliant incident-to-billing allows practices to receive 100% of the Medicare physician fee schedule reimbursement rate for NPPs providing follow-up care to eligible patients. In contrast, billing for the same services under an NPP’s NPI is eligible for 85% reimbursement. As a result, when it is appropriate and compliant to do so, your practice can collect 15% more for a Medicare-eligible service billed as incident-to compared to a practice that does not employ this billing option.

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