Incident To Billing Practices are Under Law Enforcement’s Microscope. Are Your Incident To Billing Practices Compliant?

Nurse Practitioners Physician and supervisor - Liles Parker

(September 20, 2022): In the Medicare billing context, the term "Incident To" refers to the fact that under certain circumstances, the services of non-physician, mid-level practitioners (such as Nurse Practitioners (NPs) and Physician Assistants (PAs)) are “. . . 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.” [1] Simply stated, as long as the various requirements mandated by Medicare have been met, the “incident to” services performed by mid-level practitioners can be billed as if the services were performed by the practitioner’s supervising physician, under the physician’s National Provider Identifier (NPI).[2] Clear as mud? Unfortunately, “incident to” billing practices remain a challenge for many health care practices around the country. It’s been 45 years since legislation was first enacted permitting NPs and PAs to bill Medicare for their services if they were performed incident to a physician’s professional services.[3] While this initial billing authorization of NP and PA services was quite limited, it has significantly expanded over the years. In this article, we will review the history of incident to billing and examine the rules that must be followed in order for NP and PA services to be properly billed incident to a supervising physician’s professional services.[4] Our focus is on Medicare (traditional) claims.[5]

I. Overview of the Medicare Program and the Use of Incident To Billing:

  • Establishment of the Medicare and Medicaid programs.

    Social Security Amendments 1965 - Liles parker

    Congress passed (and President Lyndon B. Johnson enacted) the "Social Security Amendments of 1965," which created the Medicare and Medicaid programs.[6]

    When first established, the Medicare and Medicaid programs were placed under the overall authority of the Department of Health, Education and Welfare (HEW).[7] Two of the subordinate organizations under HEW at that time were the Social Security Administration (SSA) and the Social and Rehabilitation Service (SRS). The Medicare program was placed under the administration of the SSA, and the Medicaid program was placed under the purview of the SRS.

    In 1977, Joseph Califano (the Secretary, HEW), on orders from President Jimmy Carter, created the Health Care Financing Administration (HCFA).[8] When HCFA was first created, its primary mission was to consolidate the management and administration of the Medicare and Medicaid programs under a single authority.[9] On June 14, 2001, HCFA was renamed the Centers for Medicare & Medicaid Services (CMS).

  • Enactment of legislation first authorizing “incident to” billing in qualified Rural Health Clinics.

    After establishing the Medicare program, it became quickly apparent that the number of rural-based physicians participating in the program were insufficient to care for Medicare beneficiaries living in rural areas. By 1977, this problem had become quite acute. To address this problem, Congress passed, and President Carter signed into law, the Rural Health Clinic Service Act of 1977.[10] Among its provisions, the Rural Health Clinic Service Act of 1977 created Rural Health Clinics[11] intended to address an inadequate supply of physicians serving Medicare beneficiaries in underserved rural areas, and to increase the utilization of Nurse Practitioners (NP) and Physician Assistants (PA) in these areas. As the Rural Health Clinic Service Act of 1977 provided, in part:

    “(aa)(1) The term “rural health clinic services” means –
    (A) physicians’ services and such other services and supplies are covered under section 1861(s)(2)(A) if furnished as an incident to a physician’s professional service,
    (B) such services furnished by a physician assistant or by a nurse practitioner and such services and supplies furnished as an incident to his service as would otherwise be covered if furnished by a physician or as an incident to a physician’s service." (Emphasis added).

    Simply stated, passage of the Rural Health Clinic Service Act of 1977 paved the way for the later growth of NP and PA services in the care of Medicare beneficiaries.

  • Impact of the Balanced Budget Act of 1997 on the coverage of “incident to” services.

    From 1977 to 1996, a number of changes were made which effectively expanded Medicare’s coverage of NP and PA services in a variety of care settings. In further recognition of the value of NP and PA services, Congress passed the Balanced Budget Act of 1997. This statute expanded Medicare’s coverage of NPs, PAs, and Clinical Nurse Specialists (CNSs) to all practice settings at a uniform rate of 85 percent of the physician’s fee schedule. This legislation also removed the restrictions on settings in which the services of NPs and CNSs would qualify for coverage by Medicare if the services were furnished incident to a physician’s professional services.[12]

II. Why Have Providers Increasingly Relied on Incident To Billing?

There are both practical and financial reasons why providers have increasingly relied on incident to billing. Each of these reasons are discussed below:

  • Practical considerations.

    From a practical standpoint, physician practices and groups have been placed in an untenable situation by the payors and their ever-growing credentialing programs.[13] Suppose that you are a physician with a growing internal medicine practice. Your practice participates in multiple payor plans and you are already credentialed with Medicare, Medicaid and several private payor plans. Should you hire an NP to assist with your growing caseload of patients, your NP will need to go through each payor’s credentialing application process before he or she will be permitted to directly bill a particular payor for the services personally performed. Although you are already credentialed with each of the payors at issue, it may take 60-90 days (or even longer if any complications are identified) for your NP to become credentialed. Until the NP is credentialed, the NP’s services cannot be billed directly to the payor. Unfortunately, this is often where the problems develop. Your biller may unwittingly bill the NP’s services under your NPI. Depending on the facts, improperly billing the services of your NP under your name and NPI can lead to administrative sanctions and False Claims Act liability. As discussed in Section IV, especially egregious conduct can result in criminal prosecution. One way of addressing this recurring problem is to assess whether the NP’s services qualify to be billed incident to those of the participating supervising physician.

  • Financial considerations.

    Over the last twenty years, physicians and other health care providers have continually faced payor cuts in Medicare reimbursement amounts. At the same time, they have been required to meet a growing list of unfunded / non-reimbursed regulatory obligations. Despite the fact that physician practice profit margins are declining, it is becoming more expensive each year for a physician to run a practice. In such an environment, it is easy to understand why a practice would hope to qualify for NP and PA services to be billed at 100% of the supervising physician’s fee schedule rather than receive reimbursement at 85%.

III. The Basics of Incident To Billing:

There are a number of basic requirements that must be met for the services of a qualified physician extender (such as NPs and PAs) to be billed incident to the professional services of a physician. Medicare has identified a number of requirements that must be met in order for the services performed by mid-level practitioners to be billed incident to the professional services of a supervising physician. As set out under 42 C.F.R. §410.26(b)[14], Medicare Part B pays for services and supplies incident to the service of a physician (or another qualified practitioner). The billing requirements for incident to are discussed below:

  • State licensure is required.

    To bill Medicare, both the supervising physician and the mid-level practitioner whose services are to be billed incident to must be properly licensed by the state.

  • State scope of practice limitations.

    For the services of an NP or PA to qualify for coverage and payment, the specific service at issue must fall within the mid-level practitioner’s scope of practice.

  • Most states require that NPs work under an appropriate collaborative practice agreement with a physician.

    With respect to NPs, Medicare Part B covers the service that they perform only if the services would be covered if furnished by a physician,[15] is not otherwise statutorily excluded from coverage,[16] AND the mid-level practitioner performs the services while working in “collaboration”[17] with a physician. There is currently a fair amount of controversy surrounding the level of independent practice that may be exercised by PAs. We recommend that you regularly monitor your state’s collaborative practice requirements with respect to both NPs and PAs as collaboration practice agreement requirements may vary by state. Please note, the physician is responsible for collaborating with a mid-level practitioner and does not have to be the practitioner’s “supervising physician” for incident to billing purposes.

  • The role of credentialing.

    The supervising physician must be credentialed by Medicare. As long as the supervising physician is licensed and properly credentialed with Medicare, services performed by NPs and PAs incident to the professional services of the physician may be billed under the physician’s NPI, even though the mid-level practitioner may not be credentialed with Medicare.

  • Non-institutional setting.

    While there are a few exceptions[18] to the general rule, the Centers for Medicare & Medicaid Services (CMS) defines an “Institutional Setting” as “all settings other than a hospital or skilled nursing facility.[19]

  • Must be an integral, although incidental, part of the physician’s professional service.[20]

    Over the years, there has been a fair amount of discussion regarding this requirement. Essentially, CMS takes the position that the services provided incident to those of the supervising physician must be an incidental part of the direct, professional services furnished by the physician to initiate a course of treatment. One question that frequency arises is “How often does a physician need to see a patient?’ As set out in the Medicare Benefit Policy Manual, “there must be subsequent services by the physician of a frequency that reflects the physician’s continuing active participation in and management of the course of treatment.

  • Commonly included in the physician’s bills.

    This requirement is self-explanatory. If a service would normally be billed out by a physician’s office, it is likely that one would qualify for incident to billing.

  • Services are of a type that are commonly furnished in physician’s offices or clinics. [21]

    Where supplies are clearly of a type a physician is not expected to have on hand in his/her office or where services are of a type not considered medically appropriate to provide in the office setting, they would not be covered under the incident to provision. Outpatient services that are provided in offices and clinics may still be billed under Medicare’s “incident-to” provisions if Medicare’s restrictive billing guidelines are met.

  • Direct personal supervision.

    The supervising physician does not have to be the physician who performed the initial patient evaluation. Any physician member of the group may be present in the office to supervise. A physician must actively participate in and manage the patient’s course of treatment. The exact requirement is usually defined by the state licensure rules for physician supervision of NPPs (e.g., the physician must see the patient every third visit). Services meeting all of the above requirements may be billed under the supervising physician’s NPI, as if the physician personally performed the service. Documentation should detail who performed the service, and that a supervising physician was in the office suite (although not necessarily the same room), at the time of the service.

  • Must be subsequent to the initial encounter.

    Incident-to services cannot be rendered on the patient’s first visit, or if a change to the plan of care (e.g., medication adjustment) is required. This care must occur under the “direct supervision” of a qualified provider. Per the Benefit Policy Manual:

    “If auxiliary personnel perform services outside the office setting, e.g., in a patient’s home or in an institution (other than hospital or skilled nursing facility), their services are covered incident to a physician’s service only if there is direct supervision by the physician [e.g., the physician must be physically present to oversee the care].”

    If the patient has a new or worsened complaint, a physician must conduct an initial evaluation and management (E&M) for that complaint and must establish the diagnosis and plan of care.

  • Generally, services must be provided by auxiliary personnel (e.g., NP or PA) under the physician’s direct supervision.[22]

    As set out under 42 C.F.R. § 410.32(b)(3)(ii), the term “direct supervision” means:

    “Direct supervision in the office setting means the physician (or other supervising practitioner) must be present in the office suite and immediately available to furnish assistance and direction throughout the performance of the procedure. It does not mean that the physician must be present in the room when the procedure is performed. Until the later of the end of the calendar year in which the PHE as defined in §400.200 of this chapter ends or, December 31, 2021, the presence of the physician (or other practitioner) includes virtual presence through audio/video real-time communications technology (excluding audio-only). (Emphasis added).

    Therefore, in the absence of the current Public Health Emergency (PHE), Medicare’s direct supervision requirements provided that if a supervising physician left the office OR was not immediately available to furnish assistance / direction, the service performed by a mid-level practitioner would not qualify to be billed as an incident to service. During the PHE, the direct supervision requirements were relaxed to permit a physician’s “virtual presence.” A more detailed discussion of the PHE is set out below.

  • During the Public Health Emergency (PHE), the definition of “direct supervision” has been modified.

    On January 19, 2020, Alex Azar, the Secretary, Health and Human Services (HHS), declared a Public Health Emergency (PHE) in connection with the 2019 Novel Coronavirus (COVID19).[23] As long as there has also been a Presidential declaration of an emergency,[24] the Secretary, HHS has authority to temporarily waive or modify application of certain Medicare requirements during the period of the emergency. In light of the PHE, Secretary Azar temporarily waived and / or modified a number of Medicare requirements. Effective June 12, 2020, the definition of “direct supervision” was modified as set out below. CMS Transmittal 10160 / Change Request 11805, dated May 22, 2020,[25] provides, in part:

    For the duration of the PHE for the COVID-19 pandemic, CMS revised the definition of direct supervision to allow direct supervision to be provided using real-time interactive audio and video technology. We recognize that given the risks of exposure, in some cases, technology would allow appropriate supervision without the physical presence of a physician. We note that in specifying that direct supervision includes virtual presence through audio/video real-time communications technology that this can include instances where the physician enters into a contractual arrangement for auxiliary personnel as defined in federal regulations at §42 CFR 410.26(a)(1), to leverage additional staff and technology necessary to provide care that would ordinarily be provided incident to a physicians’ service (including services that are allowed to be performed via telehealth). Additionally, we note that this change is limited to only the manner in which the supervision requirement can be met and does not change the underlying payment or coverage policies related to the scope of Medicare benefits, including Part B drugs.” (Emphasis Added).

    As you will recall, Medicare’s definition of “direct supervision” normally requires that a supervising physician be present in the office suite and immediately available to furnish assistance and direction throughout the performance of the procedure. [26] From a practical standpoint, this modification of the requirements for “direct supervision” removed the requirement that a physician be physically present in the office. Additionally, the direct supervision of mid-level practitioners could now be provided through the use of real-time audio and video technology. The latest extension of the PHE by the Secretary, HHS is effective through October 13, 2022.[27] It is important to keep in mind that this expansion of the definition of direct supervision will only continue until the end of the calendar year that the PHE ends.

  • Employment relationship.

    Both the credentialed physician and the qualified mid-level practitioner providing the incident to service must be employed by the group entity billing for the service (if the physician is a sole practitioner, the physician must employ the mid-level practitioner). This employment requirement was expanded in 2002 to permit a supervising and mid-level practitioner to be an “employee, a leased employee or an independent contractor” or the group or legal entity billing and receiving payment for the services.[28]

  • The services must be an expense to you.

    This requirement is tied directly to the “employment relationship” obligation set out above. In order for services to be billed incident to those of the supervising physician, the cost of the mid-level practitioner must represent a direct financial expense to your practice, regardless of whether the individual is a W-2 employee, a leased employee or an independent contractor.

Further, the requirements do not apply to services with their own benefit category. Diagnostic tests, for example, are subject to their own coverage requirements and may be more or less stringent than supervision requirements for services and supplies furnished incident to physician’s or other practitioner’s services.

IV. What are the Risks of Improper Incident To Billing Practices?

  • Administrative sanctions and penalties.

    The vast majority of incident to cases we have handled have been identified by Medicare, Medicaid and private payors through data mining and claims analysis. It is important to keep in mind that when you bill the services of an NP or PA under your billing number, payors have no way of knowing that a portion of the services billed under your number were actually performed by one or more mid-level practitioners. Even if we assume that the incident to requirements have been fully met, your workload statistics will still likely generate an audit of some type. At a minimum you will likely receive an Additional Documentation Request (ADR) from your Medicare Administrative Contractor (MAC). Your claims may also be placed on prepayment review or subjected to a postpayment audit by a Unified Program Integrity Contractor (UPIC). UPICs and other CMS program integrity contractors have been known to take a hard line when auditing mid-level practitioner claims that have been billed incident to those of the supervising physician. Although the deficiencies noted may not rise to the level of a False Claim or constitute criminal conduct, they can still result in a significant overpayment if your documentation has not been properly maintained.

  • Civil sanctions – False Claims Act liability.

    In recent years, there have been a number of False Claims Act cases brought against physicians, their practices and related entities for the failure to meet one or more of the requirements needed to properly bill incident to. For example:

    New Jersey. Billing for services of unlicensed personnel. In this whistleblower case, the Relator alleged that the defendants committed numerous violations of the Federal False Claims Act and the New Jersey False Claims Act when submitting claims to the Medicare, Medicaid, and TRICARE programs. More specifically, the Relator alleged that the defendants (1) purposely and routinely used inaccurate Evaluation and Management CPT codes to inflate the claims; (2) billed for services provided by licensed personnel when the services were actually provided by unlicensed personnel. The defendants paid $106,255 to resolve the False Claims Act violations alleged in the case.

    Pennsylvania. Lack of direct supervision. In this case, a whistleblower filed a qui tam lawsuit under the False Claims Act against a Pennsylvania-based medical group specializing in the treatment of varicose veins. Among the claims set out in the whistleblower lawsuit, it was alleged that the defendants submitted claims to Medicare for services that were rendered by non-physicians "incident to" the supervision of a physician when, in fact, no physician was present in the office. Ultimately, the defendants agreed to pay $1,205,000 to resolve the False Claims Act allegations.

    Oklahoma. Lack of direct supervision. In this Oklahoma case, the Evaluation and Management (E/M) services of a non-credentialed provider were billed under the NPI of a practice physician who did not personally perform any part of the services at issue and did not supervise the services rendered. The government brought an action under the False Claims Act and the defendant agreed to pay $500,000 to resolve the case.

    Pennsylvania. Lack of direct supervision. In yet another Pennsylvania whistleblower case, it was alleged that a number of physicians, along with an associated hospital and pain management clinic billed Medicare and the Federal Employee Health Benefits Program (FEHBP) for “incident to” services that did not qualify for payment. More specifically, it was alleged that the services performed by non-physicians did not qualify as “incident to” services because the supervising physicians were “actually away from the office or otherwise incapable of supervising." The defendants in this case agreed to pay the government $700,000 to resolve the False Claims Act violations alleged.

    It is increasingly common for you to learn of a pending civil False Claims Act investigation through the receipt of a Civil Investigative Demand (CID). [29] Federal prosecutors rely on CIDs to seek the production of responsive documents that may be relevant to the government’s investigation. Moreover, CIDs may be used by the government to require health care providers to answer interrogatories and to compel the oral testimony. If you receive a CID, it is essential that you contact an experienced health lawyer to assist you with a response. It is important to keep in mind that any information obtained by the government in a civil False Claims Act investigation can be shared with other Federal prosecutors and used in a parallel criminal prosecution.

  • Criminal liability and prosecution.

    Although infrequent, there have been several criminal cases brought against individuals and entities, at least in part, on the basis that services performed by a non-credentialed provider were improperly billed under the name and provider number of a credentialed provider. To be clear, none of the cases we have identified solely involved incident to claims. Most also alleged other common health care fraud schemes such as billing for services not rendered or identity theft. We have not seen any Federal prosecutions which were based solely on this specific type of illegal conduct. Nevertheless, it is clear that if a physician or practice group is alleged to have engaged in a broader scope of fraudulent conduct, prosecutors will not hesitate to include these types of false claims in an Information or Indictment. For example:

    New Jersey. Billing for services of unlicensed personnel. In this case, a New Jersey physician was charged with Medicaid fraud. The government alleged that he used unlicensed individuals to treat patients in his Elizabeth, New Jersey office. Both of the unlicensed individuals had attended medical school outside of the United States but had not passed the tests required to be licensed to practice medicine in New Jersey. The services performed by these unlicensed individuals were then billed to Medicaid under the defendant physician’s billing number, even though he was out of the country part of the time. The defendant physician pled guilty to health care fraud and was sentenced to 43 months in prison. He was also ordered the pay $1.8 million in restitution to the government.

V. What is the Future of Incident To?

From the government’s standpoint, incident to billing is a regulatory nightmare. No one disputes that when it was first authorized in 1977 / 1978, it was a much-needed band aid to address the growing shortage of physicians in rural areas. NPs and PAs were seen as a quick fix to address the scarcity of physicians available to care for rural Medicare beneficiaries. Over the next four decades, Medicare would further loosen the practice and billing restrictions on services by NPs and PAs.

  • Concerns Raised by the OIG Regarding Transparency.

    From a coding and billing perspective, the OIG has repeatedly noted that there is no easy way to determine if the auxiliary personnel whose services are being billed incident to are licensed or even qualified.[30] In fact, there is no way to tell if a claim has even been billed incident to in the first place. On its face, it appears that the physician performed the services at issue. To remedy this problem, the OIG recommended that CMS requires “physicians who bill services to Medicare that do not personally perform to identify the services on their Medicare claims by using a service code modifier. The modifier would allow CMS to monitor claims to ensure that physicians are billing for services performed by nonphysicians with appropriate qualifications.” CMS did not concur with the OIG’s recommendation to implement the use of a modifier. To date, there is still no way to tell on the face of a CMS-1500 if the services were rendered by a mid-level practitioner incident to those of his or her supervising physician.

    More recently, the OIG again raised their transparency concerns in connection with the billing of telehealth incident to services. As the OIG wrote in its September 2022 Data Brief examining telehealth program integrity risks:[31]This billing practice makes it difficult to determine when telehealth services were provided by the physician or when services were rendered “incident to” a physician.

  • Concerns Raised by the Medicare Payment Advisory Commission (MedPAC).

    The most influential group leading the drive to get rid of incident to billing is the Medicare Payment Advisory Commission (MedPAC). MedPAC is an independent congressional agency that was established by the Balanced Budget Act of 1997. MedPAC’s purpose is to advise Congress on issues affecting the Medicare program. As part of its 2019 Report to Congress, MedPAC recommended to Congress that incident to billing be eliminated, and that NPs and PAs should be required to bill Medicare directly for the services they provide. MedPAC estimated that the elimination of incident to billing “would result in huge savings for the Medicare program – an estimated $50-250 million in the first year and $1-5 billion over the first 5 years.[32]

VI. Ways to Reduce Your Level of Risk:

There are several ways that you can work to reduce your level of risk with respect to incident to billing. These include:

  • Quit billing incident to!

    Unfortunately, physicians and group practices have a long history of incorrectly billing the services of NPs and PAs incident to the professional services of their supervising physician. It’s been almost 50 years and incident to enforcement cases continue to arise. If your practice has a solid handle on the rules and documentation requirements, great! If not, quit billing incident to. It isn’t worth the 15%. The additional bump you receive through incident to billing will be overshadowed by the costs you incur defending an audit and paying back any overpayment that may be owed.

  • Streamline your HR and credentialing process.

    Read your enrollment applications and their associated payor contracts. What are the credentialing requirements that must be met? Plan ahead by starting the credentialing process as soon as possible when a new NP or PA joins the practice. You may even consider holding off the entry on duty date of new NPs and PAs until credentialing is completed.

  • Restrict the types of patients that can be seen by NPs and PAs until credentialing is completed.

    Restrict non-credentialed NPs and PAs from providing services to patients covered under a payor plan that requires credentialing. For example, have NPs and PAs limit their services to self-pay patients or other services that do not require credentialing.

  • If you intend to continue billing incident to, conduct internal audits to help ensure compliance.

    Under the Affordable Care Act (ACA), the Secretary, HHS may require that providers participating in Medicare, Medicaid and other Federal health benefit programs implement an effective Compliance Plan. “Internal Auditing and Monitoring” is one of the seven elements of an effective Compliance Program. If you are billing NP and PA services incident to, you should periodically review these claims to help ensure that they meet all applicable requirements for coverage, coding, and billing.

  • If you receive a Civil Investigative Demand (CID), immediately call an experienced health lawyer.

    Remember, there are a number of collateral risks that can flow from the initiation of a False Claims Act investigation. Call your attorney!

    To the extent that an audit or investigation of your incident to billing practices has already been initiated by the government, we recommend that you engage experienced legal counsel to represent you. Liles Parker attorneys have extensive experience and expertise representing physician specialty practices around the country in audits and investigations. Many of our health law attorneys are also Certified Professional Coders (CPCs) and / or Certified Medical Reimbursement Specialists (CMRSs). Questions? Give us a call for a free consultation. We can be reached at: 1 (800) 475-1906.

Robert W Liles , Managing partner - Liles Parker
Robert W. Liles, Esq. is Managing Partner at the health law firm, Liles Parker PLLC. With offices in Washington, DC, Houston, TX, and Baton Rouge, LA, our attorneys represent physicians, their practices and other health care providers around the country in connection with the receipt of Civil Investigative Demands (CIDs), False Claims Act investigations, and payor claims audits. Should you have any questions, please call us for a free consultation. Robert can be reached at: 1 (800) 475-1906.
  • [1] Ctrs. for Medicare & Medicaid Servs., Publ’n 100-02, Medicare Benefit Policy Manual, ch. 15 § 60.1 (1st rev. 2003) [hereinafter MBPM].
  • [2] Among its various provisions, the Administrative Simplification provisions of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) mandated the adoption of a standard, unique health identifier for each health care provider. Health Insurance Portability & Accountability Act of 1996 (HIPAA), Pub. L. No. 104-191, 110 Stat. 1936 (codified as amended in scattered sections of 18, 26, 29, and 42 U.S.C.) The NPI Final Rule, published by CMS in the Federal Register, established the National Provider Identifier (NPI) as the standard. HIPAA Administrative Simplification: Standard Unique Health Identifier for Health Care Providers Rule, 45 C.F.R part 162 (Jan. 23, 2004).
  • [3] Rural Health Clinic Service Act of 1977, Pub. L. No. 95—210, 91 Stat. 1485 (1977). See § 1 (aa)(1)(A)—(B).
  • [4] Billing exceptions such as shared services, locum tenens and reciprocal billing will be covered in a separate article.
  • [5] The appropriateness of incident to billing in connection with Medicaid, Medicare Advantage, Medicaid Advantage and TRICARE claims will be covered in a separate article.
  • [6] Social Security Amendments of 1965, Pub. L. No. 89­­-97, 79 Stat. 1432 (1965).
  • [7] At its time, the Department of Health, Education, and Welfare (HEW) was a massive organization, responsible for overseeing 210 different government programs. Merle Broberg, THE DEPARTMENT OF HEALTH AND HUMAN SERVICES 69 (1989).
  • [8] Robert A. Derzon, The Genesis of HCFA, 24 J. Health Affairs W-5-326, 328 (2005).
  • [9] On October 17, 1979, Congress passed, and President Jimmy Carter signed into law, the Department of Education Organization Act of 1979. Pub. L. 96-88, 93 Stat 668 (1979). This legislation provided for a separate Department of Education. The Department of Health, Education, and Welfare (HEW) became the Department of Health and Human Services (HHS) on May 4, 1980.
  • [10] Rural Health Clinic Service Act of 1977, Pub. L. No. 95-210, 91 Stat. 1485 (1977). See § 1 (aa)(1)(A)—(B).
  • [11] Effective March 1, 1978, Rural Health Clinics became eligible to participate in the Medicare program. These clinics were to be paid an all-inclusive rate (AIR) for medically necessary primary health services, and qualified preventive health services, furnished by a Rural Health Clinic practitioner.
  • [12] See Balanced Budget Act of 1997 § 4511(a), Pub. L. No. 105-33, 111 Stat. 442 (1997).
  • [13] For a general discussion on the purpose of “Credentialing” (not limited to medical doctors), please see our article titled: The Dangers of Billing Payors for the Services of Non-Credentialed Dentist / Non-Participating Dentist.
  • [14] As 42 CFR § 410.26(b) provides:
    1. Services and supplies must be furnished in a noninstitutional setting to noninstitutional patients.
    2. Services and supplies must be 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;
    3. Services and supplies must be commonly furnished without charge or included in the bill of a physician (or other practitioner).
    4. Services and supplies must be of a type that are commonly furnished in the office or clinic of a physician (or other practitioner).
    5. In general, services and supplies must be furnished under the direct supervision of the physician (or other practitioner). Designated care management services can be furnished under general supervision of the physician (or other practitioner) when these services or supplies are provided incident to the services of a physician (or other practitioner). 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.
    6. Services and supplies must be furnished by the physician, practitioner with an incident to benefit, or auxiliary personnel.
    7. Services and supplies must be furnished in accordance with applicable State law.
    8. A physician (or other practitioner) may be an employee or an independent contractor.
    9. Claims for drugs payable administered by a physician as defined in section 1861(r) of the Social Security Act to refill an implanted item of DME may only be paid under Part B to the physician as a drug incident to a physician’s service under section 1861(s)(2)(A). These drugs are not payable to a pharmacy/supplier as DME under section 1861(s)(6) of the Act.
  • [15] See 42 C.F.R. § 410.75(c).
  • [16] See 42 C.F.R. § 410.75(c)(2).
  • [17] As set out under 42 C.F.R. Sec. 410.75(c)(3)(i):

    “Collaboration is a process in which a nurse practitioner works with one or more physicians to deliver health care services within the scope of the practitioner's expertise, with medical direction and appropriate supervision as provided for in jointly developed guidelines or other mechanisms as provided by the law of the State in which the services are performed.”

  • [18] See MBPM §60.B.

    “Hospital services incident to physician’s or other practitioner’s services rendered to outpatients (including drugs and biologicals which are not usually self-administered by the patient), and partial hospitalization services incident to such services may also be covered.”

  • [19] See id. at § 60.A,
  • [20] See id. at § 60.1.
  • [21] See id. at § 60.1A.
  • [22] See id. at § 60.1B.
  • [23] See § 319 of the Public Health Service Act, 42 U.S.C. § 247(d).
  • [24] On March 13, 2020, President Donald Trump declared a national emergency concerning COVID-19. Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak (Mar. 13, 2020).
  • [25] CMS Transmittal 10160 / Change Request 11805, Summary of Policies in the Calendar Year (CY) 2020 Medicare Physician Fee Schedule (MPFS) Public Health Emergency (PHE) Interim Final Rules (May 22, 2020).
  • [26] 42 C.F.R. § 410.32(b)(3)(ii).
  • [27] Xavier Becerra, the current Secretary, HHS, extended the existing PHE on July 15, 2022.
  • [28] CMS Transmittal 1764 / Change Request 2222, dated August 28, 2002 . See also Ctrs. for Medicare & Medicaid Servs., Publ’n 100-04 Medicare Claims Processing Manual, ch.1 § 60.1.B (3086th rev. 2014)
  • [29] Importantly, the U.S. Attorney’s Office may only issue a CID if: (1) the government is assessing whether or not to intervene in a whistleblower case, OR (2) the government has initiated its own investigation of possible violations of the False Claims Act but has not yet filed a case. For a more detailed discussion of CIDs , see our article titled “The Collateral Enforcement Risks of DOJ Civil Investigative Demands (CIDs) Issued in False Claims Act Maters and Cases.
  • [30] Office of Inspector General Report, “Prevalence and Qualifications of Nonphysicians Who Performed Medicare Physician Services.” OEI-09-06-00430. (August 2009).
  • [31] OIG Data Brief titled “Medicare Telehealth Services During the First Year of the Pandemic: Program Integrity Risks.” Page 14. September 2022, OEI-02-20-00720.
  • [32] Medicare Payment Advisory Commission (MedPAC), Report to Congress – Medicare and the Health Care Delivery System, p.152-62 (June 2019).