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Billing incident to professional services [PODCAST]

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The Hospital Finance Podcast

In this episode, we are joined by Rob Senska, General Counsel and Director with LW Consulting, to discuss billing incident to professional services.

Learn how to listen to The Hospital Finance Podcast on your mobile device.

Highlights of this episode include:

  • Overview of incident to professional services
  • What regulations govern the billing for these services
  • What the requirements are for billing incident to
  • The process for auditing and monitoring for correct incident to billing

Mike Passanante: Hi, this is Mike Passanante. And welcome back to the Hospital Finance Podcast.

Today, I’m joined by Rob Senska, General Counsel and Director with LW Consulting, a full-service consulting company providing compliance, strategic and audit services to healthcare providers.

Rob has nearly 20 years of legal compliance and regulatory experience in the healthcare field focusing on both the payer and provider sides.

Rob has held senior level hospital legal and compliance leadership roles at both community hospitals and major national health systems. He’s also worked at top New Jersey and New York law firms in their health and hospital practice groups.

Rob holds a JD from Brooklyn Law School, an MBA from Union University, a BS from Union College, and a Lean Six Sigma Blackbelt Certification from Villanova University.

Rob, welcome to the podcast!

Rob Senska: Good morning, Mike. Thank you very much for having me.

Mike: So today, we’re going to talk about documentation support billing incident to professional services. So Rob, let’s start out. What is incident to professional services?

Rob: Sure, Mike. The incident to rules are billing rules that provide an exception allowing 100% of allowable reimbursement at the physician level for non-physician practitioners or what we’ll call NPPs as long as all of the enumerated requirements that are detailed in the CMS rules are met.

Mike: And what regulations govern billing for these services?

Rob: This is very important, Mike, because these are all codified. These rules for billing “incident to” are codified in the CMS regs. And for the people listening, the specific citation is 42CFR section 410.26. Also, these rules are laid out in the Medicare Benefit Policy Manual under the Incident To section.

Now, by way of a brief background, Mike, when Medicare was enacted, Congress provided for a payment to the physician who directly interacted with the patient. But Congress also recognized that physicians received help in their offices from other providers.

So these incident to rules were established to cover services that are an integral, although incidental, part of a physician’s professional services to the patient. And because these services are so intertwined with those that the physician provides, a claim for non-physician provider services that are “incident to” the physician’s services can be submitted as if the physician actually performed the service.

The non-physician providers are invisible on the claim form when these are submitted. And therefore, the claim is paid at 100% of the physician fee schedule, not the other practitioner schedule.

Mike: What are the requirements for billing incident to?

Rob: Sure! I think one thing first and foremost to keep in mind is that these incident to rules are specific and apply only to Medicare reimbursement. So, some of the elements that are set forth and delineated in the regulations for this are that the service must take place in a “non-institutional setting.” Another requirement is that a Medicare credentialed physician must initiate the patient’s care.

Also, after the initial encounter, during which the physician arrives at a diagnosis or plan of care, a non-physician provider (or NPP again) may provide follow-up care.

Other elements. A physician must actively participate in and manage the patient’s course of treatment. Basically, the patient just can’t be completely handed off through the course of care to the other non-physician practitioner.

Also, the incident to service must be the type of service usually performed in the office setting and must be part of the normal course of treatment of diagnosis or illness for the patient.

These are some of the primary key elements for properly billing “incident to.”

Mike: Okay. So, let’s look at the other side. What services cannot be billed as incident to?

Rob: Right! Great point. Any services performed in all other settings other than an office setting are not allowed for incident to billing. So the site of service code for the coders listening in is service code 11 for properly billing incident to. All other place of service or site of service codes may not be billed based on an incident to basis.

So, saying it another way, very basically, it must be in the office setting.

Now, I will note—and it’ll be outside the scope of this discussion, Mike—that hospitals have their own set of guidelines for what are called split or shared services. Our company does consult and provide guidance on that topic, but it’s a little bit outside the scope of this discussion.

Mike: Rob, how is reimbursement affected when billing incident to?

Rob: As long as the regulatory requirements are met—some of which, we just went through—the reimbursement is not affected at all, meaning the providers will receive 100% of the allowable Medicare rates.

Mike: So, what are the benefits for employing non-physician practitioners especially if they’re only reimbursed 85% of the Medicare allowable?

Rob: That’s a great question and a great point. So just stepping back for a second, the non-physician practitioners are generally paid at a rate of 85% rather than the 100%. So there are still very good reasons that we’ve seen in the industry for having non-physician practitioners bill even if it’s not incident to.

These providers can extend their ability to deliver more care to the patients. So the physicians can essentially almost be in more than one place.

Now, MGMA data has suggested that physician practices and groups that actually use and bill NPP’s perform better overall in several categories, including financially. In fact, an MGMA report in 2010 found that 61% of providers or provider groups have “better performing practices by using and billing for non-physician providers.” This number jumped up in 2013 to almost 68% having “better performing practices by using and billing NPP’s under their own credentials.”

So, practices have a higher patient capacity. And this can translate into more revenue by utilizing and leveraging these NPP’s.

There is industry knowledge and literature that suggests that using NPP’s can not only allow you as a practice see more patients, but it frees the physicians to perform higher level services and more complex services for patients.

So, essentially, by employing non-physician providers and having them practice at the top of their license, it really makes sense for everyone. What I like to say, it’s the right leveling of the provider to have max capacity and touch the patients.

The other thing we see in the industry is that these NPP’s often can spend a little more time with the patient, thus establishing an even stronger provider, we’ll say, and patient relationship… all benefits to a practice.

Mike: Do other insurers accept billing incident to?

Rob: No, this is strictly, as I alluded to earlier, really a Medicare concept. You really have to check all your payer guidelines to see what is acceptable for NPP rules and incident to. This is strictly, in this context, Medicare-specific.

Mike: And what is the process for auditing and monitoring for correct incident to billing? And who should oversee the auditing process?

Rob: Right! I think it’s important to check this. We do see a lot of errors in this area. Again, you really need to make sure you’re following the CMS-dictated protocol and meeting the requirements of the regs. Medicare does look at this. It’s something that they will review quite frequently sometimes. So they’ll look at every guideline to see if there are improper payments being made. And a lot of practices we’ve seen needs some educating in this space.

So, it’s important for a practice that is doing incident to billing to perform a probe audit and really check themselves to see if there are any discrepancies with what they’re doing and the regs.

And in general, we find in our practice, there’s almost always some room for improvement and some confusion quite candidly because it’s not as straightforward as you would think.

So, we’ve seen a lot of practices not billing it right.

We’ve also seen areas where the practice’s actual policies and procedures or standard operating processes as they’ve laid out in writing are not properly aligned or properly written to be in compliance with the incident to rules. So the people might be following what I’m saying are their own practice guidelines, but those guidelines are written inappropriately or incorrectly.

So, that’s obviously key, making sure what you’ve put into your policies and procedures is right and then what people are following are right.

So it’s important to have experts guide you in this space very often and to have specific guidance on this topic and knowledge and education to make sure that you’re following the incident to protocols and requirements properly.

Mike: Rob, thanks for helping us understand how to properly bill incident to. If someone wanted to find out more about you or LW Consulting, where can they go

Rob: They can reach us at, Mike. Thank you.

Mike: Thank you, Rob.


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