Incident to Billing Criteria (Medicare Option #2)

[ Defined | Reimbursement | Provider Numbers | Requirements | Physician-Directed ClinicsHospital Settings | Employment Criteria ]

"Incident to" services are defined as services or supplies furnished as an integral, although incidental, part of the physician's personal professional services in the course of diagnosis or treatment of an injury or illness. 

Reimbursement is based on 100% of the physician fee schedule amount.

Provider Numbers
Services provided "incident to" are billed under the physician's provider number.  Refer to the CMS and Novitas references at the end of this email for complete billing details.

All the following requirements must be met before an NPP may bill under the "incident to" provision:

  • The NPP must be an employee of the physician;
  • The initial visit (for that condition) must be performed by the physician .This does not mean that on each occasion of an incidental service performed by an NPP, that the patient must also see the physician. It does mean there must have been a direct, personal, professional service furnished by the physician to initiate the course of treatment of which the services being performed by the NPP is an incidental part.
  • There must be direct personal supervision by the physician as an integral part of the physician's personal in-office service. The physician must be physically present in the same office suite and be immediately available to render assistance if that becomes necessary;
  • The physician has an active part in the ongoing care of the patient. Subsequent services by the physician must be of a frequency that reflects his/her continuing active participation in, and management of, the course of the treatment.

Physician-Directed Clinics
A physician-directed clinic is one where:

  • A physician (or a number of physicians) is present to perform medical (rather than administrative) services at all times the clinic is open;
  • Each patient is under the care of a clinic physician; and,
  • The non-physician services are under medical supervision.

In highly organized clinics, particularly those which are departmentalized, direct personal physician supervision may be the responsibility of several physicians as opposed to an individual attending physician.  In this situation, medical management of all services provided in the clinic is assured.  The physician ordering a particular service need not be the physician who is supervising the service.  

Hospital Settings
Services and supplies that would normally be covered "incident to" in an office setting, such as NPs that the physician hires and supervises, are not billable by the physician in hospital settings .  Therefore, if the physician uses the services of his/her own employees in a hospital setting and the physician merely supervises his/her services, the physician is not eligible for a payment from Medicare.  Although the physician's employees might meet the supervision and employment requirements generally applicable to "incident to" services in other settings, their services are nevertheless not payable as "incident to" services to the physician when furnished in a hospital setting.  This is because supervision alone does not constitute a reimbursable practitioner service.  The physician must personally perform the practitioner service for which the physician bills for it to payable in the hospital setting.  If the physician does not personally perform the service, the physician is not entitled to any practitioner payment.  

Employment Criteria
To be considered an employee for purposes of the "incident to" provision, the non-physician performing an "incident to" service may be a:

  • Part-time;
  • Full-time; or,
  • Leased employee of the supervising physician, physician group practice, or of the legal entity that employs the physician who provides direct personal supervision.

A leased employee is a non-physician working under the a written employee leasing agreement which provides that:

  • The non-physician, although employed by the leasing company, provides services as the leased employee of the physician or other entity; and,
  • The physician or other entity exercises control over all actions taken by the leased employee with regard to the rendering of medical services to the same extent as the physician or other entity would exercise such control if the leased employee were directly employed by the physician other entity.

To satisfy the employment requirement, the non-physician either leased or directly employed) must be considered an employee of the supervising physician or other entity under the common law test of an employer/employee relationship.

At-A-Glance Billing Guidelines


Last Updated On

May 13, 2016

Originally Published On

March 23, 2010