Insight on “Incident To” Billing

November 19, 2004


The intent of this article, which was written by the Texas Medicare carrier to its providers, is to clarify “incident to” services billed by physicians and non-physician practitioners to carriers. “Incident to” services are defined as those services that are furnished incident to physician professional services in the physician’s office (whether located in a separate office suite or within an institution) or in a patient’s home.

These services are billed as Part B services to your carrier as if you personally provided them and are paid under the physician fee schedule.

Note: “Incident to” services are also relevant to services supervised by certain non-physician practitioners such as physician’s assistants, nurse practitioners, clinical nurse specialists, nurse midwives, or clinical psychologists. These services are subject to the same requirements as physician-supervised services. Remember that “incident services” supervised by non-physician practitioners are reimbursed at 85 percent of the physician fee schedule. For clarity’s sake, this article will refer to “physician” services as inclusive of non-physician practitioners.

To qualify as “incident to,” the services must be part of a patient’s normal course of treatment, during which a physician personally performed an initial service and remains actively involved in the course of treatment. You do not have to be physically present in the patient’s treatment room while these services are provided, but you must provide direct supervision; that is, you must be present in the office suite to render assistance, if necessary. The patient record should document the essential requirements for incident to service.

More specifically, these services must be all of the following:

  • An integral part of the patient’s treatment course;
  • Commonly rendered without charge (included in the physician’s bills);
  • Of a type commonly furnished in a physician’s office or clinic (not in an institutional setting); and,
  • An expense to the physician.

Examples of qualifying “incident to” services include cardiac rehabilitation, providing non-self-administrable drugs and other biologicals and supplies usually furnished by the physician in the course of performing his/her services, e.g., gauze, ointments, bandages, and oxygen.

The following paragraphs discuss the various care settings, which are important to note because the processes for billing vary somewhat depending on the care site.

Physician Office


In the physician office, qualifying “incident to” services must be provided by a caregiver whom the physician directly supervises and who represents a direct financial expense to the physician (such as a “W-2” or leased employee, or an independent contractor).


The physician does not have to be physically present in the treatment room while the service is being provided, but must be present in the immediate office suite to render assistance if needed. If the physician is a solo practitioner, he or she must directly supervise the care. If in a group, any physician member of the group may be present in the office to supervise.

Hospital or SNF

For inpatient or outpatient hospital services and services to residents in a Part A covered stay in an SNF, the unbundling provision (1862 (a)(14) provides that payment for all services are made to the hospital or SNF by a Medicare intermediary (except for certain professional services personally performed by physicians and other allied health professionals). Therefore, “incident to” services are not separately billable to the carrier or payable under the physician fee schedule.

Offices in Institutions


In institutions including SNFs, your office must be confined to a separately identifiable part of the facility and cannot be construed to extend throughout the entire facility. Physician staff may provide service incident to the physician’s service in the office to outpatients, to patients who are not in a Medicare covered stay or in a Medicare certified part of an SNF. If an employee (or contractor) provides services outside of the physician’s “office” area, these services would not qualify as “incident to” unless the physician is physically present where the service is being provided. One exception is that certain chemotherapy “incident to” services are excluded from the bundled SNF payments and may be separately billable to the carrier.

In Patients’ Homes


In general, a physician must be present in the patient’s home for the service to qualify as an “incident to” service. There are some exceptions to this direct supervision requirement that apply to homebound patients in medically underserved areas where there are no available home health services, only for certain limited services found in Pub 100-02. Chapter 15 Section 60.4 (B). In these instances, a physician does not need to be physically present in the home when the service is performed, although general supervision of the service is required. However, the physician must order the services, maintain contact with the nurse or other employee, and retain professional responsibility for the service. All other incident to requirements must be met.


A second exception applies when the service at home is an individual or intermittent service performed by personnel who meet pertinent state requirements (e.g., nurse, technician, or physician extender) and it is an integral part of the physician’s services to the patient.

Ambulance Service


Neither ambulance services nor EMT services performed under a physician’s telephone supervision are billable as “incident to” services.

For a complete discussion of “incident to” billing go to:

http://www.cms.hhs.gov/medlearn/matters/mmarticles

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