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Important Changes Made to "Incident to" Billing in CMS 2016 Revisions to Physician Fee Schedule

Medicare pays practitioners for "incident to" services at the applicable Medicare payment rate as if the practitioner personally furnished the service. For example, if billed by a physician, they are paid at 100 percent of the fee schedule amount, and if billed by a nurse practitioner or clinical nurse specialist, they are paid at 85 percent of the fee schedule amount. Payments are subject to the usual deductible and coinsurance amounts.

Up until January 1, 2016, the Medicare rules on physician (and other practitioner) incident to billing did not clearly answer two questions:

Medicare pays practitioners for "incident to" services at the applicable Medicare payment rate as if the practitioner personally furnished the service. For example, if billed by a physician, they are paid at 100 percent of the fee schedule amount, and if billed by a nurse practitioner or clinical nurse specialist, they are paid at 85 percent of the fee schedule amount. Payments are subject to the usual deductible and coinsurance amounts.

Up until January 1, 2016, the Medicare rules on physician (and other practitioner) incident to billing did not clearly answer two questions:

1. Does a physician who initiates treatment or who orders or refers the patient for an "incident to" service also have to supervise and bill for the service?

2. Can an "incident to" service be billed by a physician who doesn't supervise the service?

The CMS 2016 Revisions to the Physician Fee Schedule clearly answered both these questions:

1. The ordering, referring or treatment initiating physician does NOT have to also be the supervising physician, BUT...

2. ONLY the supervising physician can bill for "incident to" services

At the risk of redundancy, the physician (or other practitioner) supervising the auxiliary personnel need NOT be the same physician (or other practitioner) who is treating the patient more broadly. However, only the supervising physician (or other practitioner) may bill Medicare for incident to services. See 42 C.F.R. § 410.26.

CMS, in this 2016 Fee Schedule update, also reiterated a number of other critical rules for incident billing.

For the most part, incident to services and supplies must be furnished under the DIRECT SUPERVISION of the physician (or other practitioner). The only exception is transitional care management and chronic care management services, each of which only require general supervision if provided by clinical staff. For "general supervision", the services must be under the general quality control of physicians, but a physician does not need to be in the office. See 42 CFR § 410.32 (b) (3).

On the other hand, to qualify a DIRECT supervision, the physician does not actually have to be in the room. But, the supervising physician has to be on the premises (i.e in the office suite). And, he or she must be immediately available to assist the non-physician provider rendering the service.

What's an office suite? At a minimum it means a single structure that's usually under a single lease where offices are rented. For example, walkways, pathways and sky bridges between the office building and the hospital do not meet the on-premises supervision requirement.

"Incident" to services or supplies must also be:

· Furnished in a noninstitutional setting to noninstitutional patients.

· An integral, though incidental, part of the service of a physician (or other practitioner) in the course of diagnosis or treatment of an injury or illness.

· Furnished by a physician, a practitioner with an incident to benefit, or auxiliary personnel. See 42 CFR 410.26(b)

· Furnished in accordance with applicable state law. See 42 CFR 410.26 (b)(7)

In addition to physicians, the following practitioners are eligible to bill services "incident to": clinical psychologists; PAs, NPs, clinical nurse specialists and Certified nurse midwifes. See 42 CFR §§ 410.71(a)(2), 410.74(b), 410.75(d), 410.76(d) 410.77(c).

Note that services that have their own Medicare benefit category, such as diagnostic x-ray services, cannot be billed as "incident to" services. .

To fight insomnia, the 2016 Medicare program revisions to payment policies under the physician fee schedule and other revisions can be found at https://www.federalregister.gov/articles/2015/11/16/2015-28005/medicare-program-revisions-to-payment-policies-under-the-physician-fee-schedule-and-other-revisions.

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