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Incident To Billing – Physician Office Setting

Billing of “Incident To” Services In Physician’s Office

Physician offices will generally bill for certain services performed by non-physician personnel as “incident to” the services of a physician.  “Incident to” services generally means services or supplies that are furnished as an integral, although incidental, part of the personal professional services of the physician.

The determination of whether a service is provided “incident to” a physician’s services can also have physician compensation implications.  The Stark law permits a group practice physician to be compensate based on personal production and “incident to” services.  Services that cannot be billed “incident to, such as diagnostic imaging services, cannot be credited directly to the physician when determining compensation within the group, a number of requirements must be met in order to bill a service as “incident to” the physician’s service performed in a physician’s office (as opposed to an outpatient department of a hospital).  The “incident to” billing requirements are summarized by the Center for Medicare and Medicaid Services in Chapter 15 of the Medicare Benefit Policy Manual.

Services and supplies commonly furnished in physicians’ offices are covered under the incident to provision. 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.  Supplies usually furnished by the physician in the course of performing his/her services, e.g. bandages, and oxygen,  are also covered.

To be covered supplies, including drugs and biological, must represent an expense to the physician or legal entity billing fir he services or supplies. For example, where a patient purchases a drug and the physician administers it, the cost of the drug is not covered.  However, the administration of the drug, regardless of the source, is a service that represents an expense to the physician. Therefore, administration of the drug is payable if the drug would have been covered if the physician purchased it.

The physician must directly supervise the personnel performing the applicable service.  Direct supervision in the office setting does not mean that the physician must be present in the same room with his or her aide.  However, the physician must be present in the office suite and immediately available to provide assistance and direction throughout the time the aide is performing services.  The availability of the physician by telephone and the presence of the physician somewhere in the institution does not constitute direct supervision.  The physical presence of the physician is required in order to bill the service “incident to” the physician’s service.  In a group practice setting, other group members can supervise services that are ordered or directed by another physician member of the group.  However, a physician group members must be available in the office suite in order to bill the service on an “incident to” basis.  If there are no physicians in the office at the time that the service is rendered to a patient, the service cannot be billed. Even if the provider has the ability to provide the applicable service independently, physician supervision must be present if the service is billed “incident to” the service of a physician.  There must also be a primary physician professional service furnished to initiate a course of treatment.  The physician must provide the initial service and the non physician practitioner’s service must be related to the initial service in order to be billed “incident to.”

 The personnel providing the services must have  legal relationship to the entity that is billing the service as “incident to” the service of the physician.  In most cases this will not raise a problem because an employee of the practice will be billing the services.  However, this issue can raise a problem in cases where an outside provider supplies personnel to operate the technical component of medical equipment.  Inappropriate billings for “incident to” services present a significant compliance area for physician practices.  Policies should be put in place to direct staff on the appropriate rules to assure that a service is correctly billed.

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John H. Fisher

Health Care Counsel
Ruder Ware, L.L.S.C.
500 First Street, Suite 8000
P.O. Box 8050
Wausau, WI 54402-8050

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