3Gen's Physician Billing Services

Anyone considering physician billing services to address challenges with physician assistant “PA billing” will need to familiarize themselves with “incident to” billing.

This article will help you understand what it is, what the requirements are when billing for these services, and potential impacts on your organization.

What Is “Incident To” and Why Is It Important to Me?
According to the American Academy of Physician Assistants (AAPA), “incident to” is a billing provision under Medicare that allows a patient to be seen exclusively by a non-physician practitioner (NPP) and to be billed under that physician’s name with the requirement that certain strict criteria are met.

Outside of “incident to” billing, when a PA or Advanced Practice Registered Nurse (APRN) provides a service, it is reimbursed at 85% as opposed to when provided by a physician, where services are reimbursed at 100%. This type of billing only applies to the clinic or hospital setting and does not apply to hospitals or facilities. It also requires that specific conditions be met, including:

  • Being on-site when the PA or APRN renders follow-up service
  • Treating the patient during the initial visit for the medical condition
  • Establishing a diagnosis and treatment plan
  • Both the physician and non-physician practitioner providing the service must be employed by the entity billing for the service
  • A physician must be actively involved in managing the patient’s course of treatment

This type of billing is an option. Services that are delivered by APRNs and PAs can be billed under their name, as authorized by the appropriate state [1].

What Does This Mean for Physician Billing Services?
In cases where incident to billing is used, the care provided is attributed to the physician with whom the PA or APRN works. This can confuse patients when they receive their Medicare Summary Notice (MSN), since it will indicate someone who they weren’t treated by. It’s very possible that the MSN could list the name of a physician and a patient actually had all their care delivered by a PA. Patient test results can also potentially be misdirected to the physicians when they should have gone to the PA who was treating them.

This type of billing can obscure the positive contributions of PAs and APRNs to your organization. It also makes it difficult to track care and results provided by these professionals – it’s almost impossible to properly identify the volume, type, or quality of services being delivered by PAs. This can greatly impact the accuracy of your internal performance measurement efforts, but also external programs such as the Centers for Medicare and Medicaid Services (CMS) Quality Payment Program. The PA’s ability to be listed on performance measure databases like Physician Compare can also be interrupted.

When trying to make decisions and recommendations on how to improve care, medical billing practice, or even allocate resources, this type of billing can hamper your efforts.

Challenges to Incident To Billing
There have been challenges, one of the most prominent being the Medicare Payment Advisory Commission (MedPAC) in its June 2019 Report to the Congress: Medicare and the Health Care Delivery System. This was their claim,
“First, Medicare allows NPs and PAs to bill under the national provider identifier (NPI) of a supervising physician if certain conditions are met, a practice known as “incident to” billing. While the existing literature on the prevalence of “incident to” billing is limited, we conducted two analyses that suggest that a substantial share of services furnished by NPs and PAs to FFS beneficiaries were likely billed “incident to” in 2016. Therefore, the Commission recommends that the Congress require APRNs and PAs to bill the Medicare program directly, eliminating “incident to” billing for services they provide.” [2]

While MedPAC does not have the ability to create or change policies, they do advise Congress on a range of policy issues. They have essentially recommended that the Medicare program eliminate “incident to” billing, instead billing under the National Provider Identifier (NPI) number of the PA or APRN who is providing care. They are also recommending that PAs and APRNs be identified on claims and in the systems that gather data by the specialty they practice under. As things stand now, their specialty is listed as “physician assistant.”

If this recommendation takes place, services that were previously attributed to physicians that are performed under the “incident to” billing method would then accurately reflect the PA or APRN who delivered care. Organizations like yours would have more accurate insight into the quality of care provided by the professionals and deeper understanding of their contribution to outcomes and the patient experience.

You, though, might be concerned that if “incident to” billing were to ever go away, reimbursement would drop. While this could be the case in some situations, there is also the possibility that the burdensome billing requirements going away can increase efficiency, supporting better use of PAs and other professionals – a change that could make up for the 15% drop in reimbursement.

This change could also cut back on issues like the case of Pennsylvania State University having to pay almost $900,000 because of allegations of submitting improper claims with respect to supervision of doctoral students and “incident to” billing [3].

Overall, the state of “incident to” billing is still up in the air and unfolding, and is something leaders in physician billing services should keep an eye on. If you want to discuss how the change could possibly impact the way you provide and are reimbursed for services, we invite you to contact us today.

[1] American Academy of PAs, “Medicare’s “Incident to” Billing Hinders the Recognition and Assessment of PA Value,” 17 June 2019. Available: https://www.aapa.org/news-central/2019/06/medicares-incident-to-billing-hinders-the-recognition-and-assessment-of-pa-value/.
[2] Medicare Payment Advisory Commission, “Report to the Congress: Medicare and the health care delivery system,” MedPAC, Washington, DC, 2019.
[3] The United States Attorney’s Office Middle District of Pennsylvania, “The Pennsylvania State University Agrees To Pay $899,824.55 To Settle A Voluntary Disclosure Related To The Penn State Psychological Clinic,” 3 March 2022. Available: https://www.justice.gov/usao-mdpa/pr/pennsylvania-state-university-agrees-pay-89982455-settle-voluntary-disclosure-related.

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