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Making Medicare incident-to rules work for you

By Todd A. Rodriguez, Esq.

When used properly, the Medicare “incident-to” billing rules can be one of the single most effective tools for extending a physician’s in-office capabilities. However, failure to follow the rules to the letter can result in significant overpayment and even fraudulent billing liability. This article discusses the requirements of the Medicare incident-to billing rules and common pitfalls experienced by many physicians when applying the rules.

In a nutshell, the incident-to rules permit a physician to bill for the services of non-physician mid-level providers and auxiliary personnel as if the physician performed those services himself. On their face, the rules are in fact quite straightforward. Specifically, to be covered on an incident-to basis, the services and supplies must be:

· An integral, although incidental, part of the physician’s professional service.

· Commonly rendered without charge or included in the physician’s bill.

· Of a type that are commonly furnished in physician offices or clinics.

· Furnished by the physician or by auxiliary personnel under the physician’s direct supervision.

Incident-to the Physician’s Services

As an initial matter, incident-to services must be integral though incidental to the physician’s services. The Centers for Medicare and Medicaid Services (CMS) has interpreted this to mean that there must have been a physician’s service rendered to which the auxiliary personnel services are incidental. However, according to CMS, this does not mean that a physician’s service must precede every single incident-to service. Rather, there must have been a physician’s service which initiates the course of treatment during which incident-to services will be rendered. So, for example, a new patient evaluation and management visit could never be performed on an incident-to basis by auxiliary personnel. However, follow-up low-level visits after the new patient visit has been conducted could be performed on an incident-to basis by non-physician personnel.

CMS has also interpreted the “incidental” requirement to mean that the physician must not only perform a service initiating a course of treatment, but also performs subsequent services of a frequency which reflect his or her active participation in and management of the course of treatment. CMS has not, however, established any specific frequency of subsequent services the physician must perform in order to meet this standard. It should be noted that some state Medicare carriers have adopted local coverage determination policies on the incident-to requirements and, in fact, some carriers do, in their local policies, prescribe the frequency of subsequent services that must be provided by the treating physician. It is important, therefore, that physicians check with their Medicare carriers for local coverage determinations relating to the incident-to rules.

Only in the Office Setting

Generally speaking, the incident-to rules only apply to services rendered in the physician office setting. In fact, the regulations expressly state that services and supplies must be furnished in a “non-institutional setting to non-institutional patients” in order to be covered as incident-to. CMS has also provided guidance on this provision stating that where auxiliary personnel perform services outside of the office setting, such as in a patient’s home or an institution (other than a hospital or skilled nursing facility), their services may be covered under the incident-to rules only if there is direct supervision by the physician. Since the supervision requirements (discussed below) require that the physician be in the office suite where the services are being rendered, in a non-office setting, direct supervision would require that the physician be in the immediate presence of the auxiliary personnel while the services are being rendered. Moreover, the manual provisions clarify that for hospital patients and for skilled nursing facility patients who are in a Medicare-covered stay, there is no Medicare Part B coverage for incident-to services.

Direct Physician Supervision

As noted above, in order to be covered under the rules, incident-to services must be performed under the direct supervision of the physician. For purposes of the rules, direct supervision is defined as presence in the office suite where the services are being rendered, at all times while the services are being rendered. In addition, the physician must be immediately available to assist if needed.

The direct supervision requirement often presents a number of problems for physicians relying on the incident-to rules. To begin with, not all physician office space lends itself to the “office suite” concept. Medical office buildings which clearly designate different physician offices as “suites” allow for a straightforward application of the rule. However, in larger group practices that occupy multiple wings or floors of a medical office building, this requirement may not be so easily applied. In addition, offices which may be separated by common areas such as hallways, stairways, or even elevators can present special problems. Unfortunately, CMS has not provided any clear guidance on what constitutes an “office suite.” Accordingly, physicians can either apply a common sense approach to the rule and hope that if the services are reviewed that approach will stand up, or, seek written guidance from their local Medicare carrier. Of course, when seeking guidance from the carrier, a physician should prepared to abide by whatever response they receive. In addition, to avoid tipping the carrier off to potentially non-compliant behavior, physicians should consider using their legal counsel to submit the inquiry on an anonymous basis.

The supervision must be provided at all times while the services are being rendered. Neither the regulations nor CMS’s Manual guidance allow for any flexibility in this rule. Lunch breaks, coffee breaks and even bathroom breaks that take the physician out of the office suite or otherwise render the physician unavailable to immediately respond if needed could potentially violate the rule. Accordingly, if these kinds of breaks are anticipated, it is advisable for the physician to make arrangements with another physician in the practice to cover during those brief absences.

Fortunately, in a group practice setting, the incident-to rules do provide for some flexibility when it comes to the supervision requirement. Specifically, in a “physician-directed clinic” any physician in the clinic may serve as the supervising physician. According to the Medicare Benefit Policy Manual, a “physician-directed clinic” is one where (1) a physician (or a number of physicians) is present to perform medical rather than administrative services at all times while the clinic is open, (2) each patient is under the care of a clinic physician, and (3) the non-physician services are under medical supervision.

Accordingly, physicians within the group who are there to perform clinical services rather than purely administrative services (e.g., hiring a physician for the sole purpose of sitting in the office as the supervising physician would likely not work), any physician in the group may serve as a supervising physician.

The physician must also be immediately available to assist at all times that the incident-to services are being rendered. CMS has not provided clarification on the immediate availability requirement so, while physicians may be tempted to apply their own definition of “immediate,” the safest approach is to assume that “immediate” means without delay. This of course requires that the supervising physician not be engaged in activities which he or she could not walk away from on a moment’s notice. In addition, even if the physician is in the office suite, office barriers could prevent his or her immediate access to the patient receiving the incident-to services. So, locked doors, hallways or staircases within the office suite should be given consideration when determining where the supervising physician must be in order to be capable of immediately responding if needed.

Who can perform incident-to services?

The incident-to rules were originally designed to permit physicians to bill for the services of office personnel such as technicians, medical assistants and nurses. However, CMS has extended the incident-to rules to services rendered by mid-level providers such as certified nurse midwives, clinical psychologists, clinical social workers, physician assistants, nurse practitioners, and clinical nurse specialists. Even though these mid-level providers may obtain their own Medicare provider numbers and bill for services directly, the incident-to rules would enable a physician to bill for these services under the physician’s number. While this does allow for some flexibility in billing for the services of these providers (where, for example, a mid-level provider has not yet obtained his or her Medicare provider number), it should be noted that for some of these providers, Medicare reimbursement is only 85 percent of the applicable Physician Fee Schedule amount when billed on an incident-to basis, but is at 100 percent of the Fee Schedule amount when billed under the mid-level provider’s number. Physicians should, therefore, take this into account when deciding how to bill for mid-level provider services.

The Medicare incident-to rules, when used properly, can quite literally give physicians an extra set of hands around the office, enabling them to do more work at a lower cost and likely at a faster pace than they could otherwise do on their own. However, if even one of the requirements is not met, the services are simply not billable to Medicare.

Todd A. Rodriguez, Esq., is a health care attorney in the Chester County, Pennsylvania office of Fox Rothschild LLP.

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