Can you please explain incident-to vs. direct billing?

Practice Services spotlight: How to bill in a health care team environment

Courtesy of MSV

15 June 2012

As the use of health care teams becomes increasingly prevalent in Virginia practices, successfully navigating health plan rules around “incident to” versus direct billing will ensure reimbursement for billable services. The following guidelines serve as a general overview of billing for non-physician provider services under the Medicare program; please refer to your health plan contracts for specific information regarding how commercial plans want your practice to bill for nurse practitioner (NP) or physician assistant (PA) services.

What are incident-to services?
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. Qualifying incident-to services must be provided by a caregiver whom you directly supervise and who represents a direct financial expense to you, such as a PA or NP. To qualify as incident-to, services must be a part of your patient’s normal course of treatment, during which a physician personally performed an initial service and remains actively involved in the course of treatment. Under this arrangement, Medicare will reimburse at 100 percent of the allowable rate.

Can a non-physician provider directly bill Medicare?
PAs and NPs can also bill under their own provider numbers after receiving payer credentials from Medicare. Services performed under this arrangement will be reimbursed at 85 percent of the physician fee schedule. This is not considered incident-to billing.

Will commercial health plans credential mid-level providers?
While Medicare will credential mid-level providers, not all commercial plans will credential non-physician providers. Check with individual carriers for billing guidelines and reimbursement policies for additional information.

What are the key changes regarding statutory changes effective July 1, 2012?
Key changes will take effect July 1, 2012 that promote team-based care: Legislation amending Virginia Code § 54.1-2957 defines a patient-care team and expands the number of NPs who can work with a physician from four to six per physician.
Legislation amending Virginia Code § 54.1-2952 will allow a licensed physician to work with up to six PAs at any one time, as opposed to current Virginia law allowing maximum supervision of two PAs.