A Tale of Two Charges Understanding the CMS Supervision Requirements for ‘Incident To’ Billing

One of the keys to maximizing revenue from the services of non-physician practitioners is understanding and correctly applying the Centers for Medicare and Medicaid Services (CMS) billing guidelines.

Billing for the services of non-physician practitioners (NPPs) may be done in one of two ways. One way is to bill direct under the NPP’s name and NPI. The other way is to bill ‘incident to’ under a physician’s name and NPI. If billed direct under the NPP’s name and NPI, CMS and others will only pay 85{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of the allowable fee paid to doctors. If billed ‘incident to,’ CMS will pay 100{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of the allowable fee. The difference of 15{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} in actual dollars collected annually can be substantial when applied to annual collections of $200,000 or more.

There will be situations in which NPPs may have to direct bill. Conversely there are some situations in which NPPs have to bill ‘incident to’ in order to get paid (see the March issue, “Collection Concerns”).

CMS Supervision Test

In order to bill ‘incident to’ and get paid the 100{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} allowable amount, certain criteria must be met. One of these criteria is the CMS supervision test. ‘Incident to’ is a CMS concept that means the NPP is providing a service that is integral but incidental to a physician’s professional service that is commonly rendered in physician offices and clinics. The physician must provide the initial service, i.e., he must see the patient during the initial visit, and must set up a plan of care (course of treatment).

The NPP may subsequently attend to the patient and bill under the physician’s name and NPI if properly supervised. If the patient comes in with a new presenting problem, the NPP must either direct bill (if allowed) or have the physician see the patient to establish a new treatment plan. Most other payers generally follow the CMS criteria but there may be some differences. For this reason, you should contact each payer to verify their position.

CMS has three levels of supervision, which are general, direct, and personal:

General supervision means the service or procedure is furnished under the physician’s overall direction and control, but the physician’s presence is not required.

Direct supervision in the office setting means the physician must be present in the office suite and immediately available to furnish assistance and direction. It does not mean that the physician must be present in the room when the service or procedure is performed.

Personal supervision means a physician must be in attendance in the room during the performance of the service or procedure.

Patient encounters in the office generally require direct supervision, although CMS uses the term ‘direct personal.’ CMS does not specify what is considered ‘present in the office suite,’ but it is generally considered met if the supervising doctor is on the same level in the same building and/or within shouting distance. If the referring physician cannot be present in the office suite, another doctor of the group may do the supervising. In this case, however, the service must be billed incident to the supervising physician, not the referring physician.

Services performed in a non-office setting, such as in the patient’s home or in an assisted-living facility, must have personal supervision. General supervision is permitted for homebound patients in medically underserved areas designated as health care professional shortage areas.

Who can be a supervising physician? Any physician member of the practice may, including leased or independent contractors. Non-employee physicians would have to make an assignment of benefits to the practice.

Non-physician practitioners can also be supervising personnel (unless not allowed by the state scope of practice or by commercial payers), but would have to bill the service under their NPI, which means it would only be reimbursed at 85{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} by CMS. Even so, this enables NPPs to leverage their services and be more productive.

Medical Record Documentation

In addition to the supervision requirements, it is very important that the patient’s medical record clearly documents that the physician initially met with the patient and set up a plan of care. Without this, there is no basis to support incident to billing. The record should also document not only the NPP rendering the service, but also that the physician was present and supervising at the time of service. Finally, the medical record must document the medical necessity of the service billed for.

Shared Visits

What is a ‘shared visit’? In certain instances, such as in a hospital, a doctor and a NPP from the same practice may both see a patient on the same day. If both practitioners have a face-to-face visit with the patient and if both document their service in the medical record, the visit can be billed either under the physician’s NPI (100{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} allowable paid) or directly under the NPP’s NPI (85{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} allowable paid) if allowed by the payer.

Remember, you can’t bill ‘incident to’ in a hospital. Both the physician and the NPP must be from the same group practice or employed by the same employer. Consultations and critical-care services do not apply and cannot be billed as a shared visit.

Diagnostic Testing

Diagnostic testing is a separate service category and has its own supervision guidelines that must be met in addition to those previously discussed.

NPPs, nurses, and technicians are the principal providers of diagnostic tests. Accordingly, it is critical that practices understand and comply with the diagnostic test supervision requirements. These may be more or less stringent than the ‘incident to’ supervision guidelines. Failure to comply may result in denial of claims, payback of previously paid benefits, and even exclusion from participating in the Medicare program. Failure to comply may also trigger a violation of the Stark Law.

Effective July 1, 2001, CMS set forth revised levels of supervision required for diagnostic tests payable under the Medicare physician fee schedule. There are actually six levels, three of which are virtually the same as the three general services supervision levels and three that are directed to specific specialties. In its Transmittal B-01-28, issued April 19, 2001, CMS identified, by CPT code, those diagnostic services requiring specific supervision levels. Every practice should have a copy of this memorandum and be familiar with the supervision levels for those diagnostic tests performed in their office.

An interesting aspect of these guidelines is that NPPs are not listed as supervising personnel. However, if it is within their state scope of practice, they can perform or supervise certain diagnostic tests if they are in the same room where the technical components of the tests are being administered by RNs or medical technicians, even if there is no physician in the office. If, for example, an NPP supervises a stress test and then provides the interpretation and report, he or she can bill 93015, reimbursable at 85{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5}. This is allowable even though the 93015 CPT code description includes the phrase ‘with physician supervision.’

If, however, the NPP performs or oversees the test and a doctor interprets the result, the NPP would bill 93016 (stress test, supervision only) and 93017 (stress test, tracing only), and the doctor would bill interpretative code 93018. In this instance, the NPP would be paid 100{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of the Medicare fees schedule for performing the technical component of the diagnostic test. CMS permits NPPs to perform diagnostic tests and bill for them under their own NPIs (state law permitting).

This area is very gray, and, to be safe, most practices, as a policy, do not designate NPPs as supervisory personnel over diagnostic tests. In many instances, it is not necessary because the required supervision is only level one or general, which does not require the physician’s presence in the office suite. However, in instances where a NPP is the ordering practitioner of a diagnostic test, such as an EKG, the test may still be billed ‘incident to’ the NPP even though the NPP is not the supervisor of the test. Also, if it is within the state scope of practice for the NPP to perform diagnostic tests, they may do so without physician supervision and direct bill Medicare for these, although payment will only be at 85{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5}.

Where there appears to be a conflict with CMS ‘incident to’ supervision levels, the diagnostic test supervision requirements override the ‘incident to’ requirements.

Note also that there are separate rules for certain vaccine shots. For example, an RN administering flu vaccine shots does not require supervision. This comes under specific directives, and the supervision guidelines don’t apply.

James B. Calnan, CPA, is partner-in-charge of the Health Care Services Division of Meyers Brothers Kalicka, P.C., in Holyoke, certified public accountants and business consultants; (413) 536-8510.