When Is “Incident-To”
Billing Appropriate?

Q: We recently added a new physician to the practice, and our search was completed much more quickly than we’d anticipated. Our new doctor is now on staff, but he doesn’t have a Medicare number and isn’t credentialed by our practice’s managed care plans yet. In the interim, how should we bill for his services? Can we bill these services incident to another one of our providers? What options are available to us? A:Adding a new physician, physician assistant (PA), or nurse practitioner (NP) to a practice is a common occurrence, especially because more dermatologists are moving from solo to group practices or expanding the size of their present groups. As you’re probably already aware, the decrease in the number of dermatologists practicing full time, coupled with the increased demand by patients for dermatologic services, has resulted in most practices being booked up weeks and months in advance. Easier access has also impacted dermatologists in private practice, fueling their needs for more providers to cover the demands of their communities. The competition for new providers is fierce, which has enabled newly graduated residents the opportunity to choose where they want to go, what they want to be paid, and what benefits they wish to receive. The same is equally true for NPs and PAs as more dermatologists recognize the benefits of adding these physician extenders to their practices. The Road Well Traveled Here’s what happens in most practices when it’s time to add a new provider: 1. The practice tries to recruit a new provider. 2. No preparations are made in anticipation of adding the new provider. 3. One of the recruits accepts the position. 4. The new provider starts a short time later (commonly within 4 to 6 weeks). 5. The practice schedules patients with the new provider. 6. The new provider starts to see patients, but all is not well. And here’s where the tricky part surfaces: a.The provider has not received his/her Medicare number. b.The new provider has not been credentialed by the various managed care plans with which the practice is contracted. c. The practice has failed to obtain a group number. So What’s the Solution? The practice can’t afford to have the new provider sitting around reading back issues of Skin & Aging, nor can the practice afford to have the newly recruited associate see patients for free. The resolution seems to be so clear. Why not just bill the services performed by the new provider under the name and number of one of the senior providers in the practice? (Usually, this is the owner or senior associate in the group.) The owner’s or senior associate’s thought process goes like this: 1. I can have the new associate see the patients. 2. I’ll make sure that I am in the office at all times. 3. After the new associate examines the patient and determines the treatment protocol, I’ll pop into the exam room, quickly review the chart notes, concur with the recommendations made by the new associate and initial/sign the chart notes. 4. I can then bill these services as “incident to” using my name and provider number. 5. I’ll do this until the new associate is fully credentialed by the plans and I get all the provider numbers. Next, you discuss the idea with several colleagues in the area who have also recently added providers, and they concur that what you are considering is the same thing they are doing in their offices. Your colleagues even state that their office manager called the various managed care plans in the area and were told that it’s o.k. to bill under the name and number of one of the practice providers who is already credentialed. Problem Solved, or Not? “Incident-to” guidelines are not appropriate for the above outlined scenario. Section 2050 of the Medicare Carriers Manual provides the basis of why the definition of “incident to” has not been met. (Most managed care plans follow the same guidelines if they allow any incident to billings under their contracts.) Here are a few highlights of the guidelines and why the billing scenario described above is not allowed. Highlight of the rule: For purposes of this section (2050), physician means physician or other practitioner (PA or NP) authorized by the Act to receive payment for services incident to his or her own services. Problem: The new associate is not yet authorized to receive payment Highlight of the rule: To be covered incident to the services of a physician, services must be an integral, although incidental part of the physician’s personal professional services in the course of diagnosis or treatment of an injury or illness. Problem: The new associate is performing the services, not the senior physician. Where is the integral part that the physician provided? (Physician — meaning the senior doctor, not the new associate!) Highlight of the rule: Coverage of services incident to the professional services of a physician in private practice is limited to situations in which there is direct physician supervision of auxiliary personnel. Auxiliary personnel means any individual who is acting under the direct supervision of a physician. When “Incident to” Applies To be considered incident to, each occasion of service by auxiliary personal need also always be the occasion of the actual rendition of a personal professional service by the physician. Such a service could be considered to be incident to when furnishing during the course of treatment where the physician performs an initial service and subsequent services of a frequency that reflects his or her active participation in and management of the course of treatment. Problem: The new associate is performing the actual professional service. The fact that the senior physician comes into the exam room and supports the medical decisions made by the new associate does not meet the criteria established for incident-to billing. Additionally, it requires the physician to perform the initial service that again is being personally performed by the new associate, not the senior (e.g., supervising), physician. Highlight of the rule: Auxiliary personnel are defined as nurses, technicians and therapists who furnish incident to the professional services of a physician. The incident-to rule also applies to non-physician practitioners who are being licensed by the states under various programs, including certified nurse midwives, clinical psychologists, clinical social workers, physician assistants, nurse practitioners and clinical nurse specialists. Special coverage instructions also exist for various allied health/non-physician practitioners’ services. Problem: Nowhere in the regulations are licensed physicians included in the definition. Therefore, physicians are not eligible to perform “incident-to” services unless they actually limit their services to those outlined in the regulations. So What Is the Solution? Here are a few suggestions. 1. Schedule the newly hired provider only with Medicare and other non-contracted carriers. 2. Non-contracted carriers don’t re-quire credentialing. So provided the physician has a medical license, you can bill. For Medicare, you can have the new hire see Medicare patients. Medicare allows you to hold all claims and retroactively bill for services back to the date that Medicare received the application for the new physician. (You can call Medicare and they will advise you as to the date they received the new provider’s application.) 3. Advise patients who are covered by plans that are contracted by your practice that they can see the new provider but that the new provider is presently out-of-network and therefore, they will have larger out-of-pocket expenses. Some patients may select to see the new provider if it means not having to wait months for an appointment. (Be sure to have the patient sign an out-of-network waiver. For a copy of the form, log onto the Inga Ellzey Practice Group Web site at www.iepg.com, and click on forms.) 4. Have the new hire only provide services that you would otherwise allow your auxiliary staff (such as your nurses and medical assistants) to perform. 5. If the managed care plan you’re contracted with states that it will allow your new provider to see patients before he or she is credentialed and that the services provided before credentialing can be billed under the name and provider number of another physician in the practice, get that in writing. If you don’t get that in writing, you may suffer severe consequences down the road. Your Best Course of Action Better yet, start the paperwork immediately once you anticipate that a new provider will join your practice. Even if the provider backs out, it’s better to have wasted that time than to have dealt with the problems of getting a new provider to join your practice who can’t legally bill for services.