Failure to Adhere to Incident-to Rules Can be Costly

The U.S. Department of Justice recently announced that two physicians and their family medicine practices located in Tennessee will pay $341,690 to resolve allegations that they violated the False Claims Act by knowingly charging Medicare for services rendered by nurse practitioners at the higher reimbursement rate for physician services.

The providers are alleged to have violated what is known as the “incident-to” rule. Under that rule, Medicare pays 85 percent of the physician fee schedule (PFS) when a service is billed under the NP’s or PA’s own National Provider Identifier (NPI). However, Medicare pays 100 percent of the PFS rate when the same service provided by an NP or PA is billed “incident to” a supervising physician. It is important to note that the physician must be present in the office suite while the services are being provided and immediately available to provide assistance if needed.

In this case it was alleged that, from 2015 to 2018, the physicians and their clinics billed Medicare as though the physicians had provided the services in question, when in fact nurse practitioners had treated the patients without the supervision required by Medicare’s “incident to” rules.  In fact, in some cases, not only were the physicians not in the office, but they were out of state or out of the country.

In addition to the direct supervision provision, the incident-to rule only allows physicians to bill Medicare at the full physician fee schedule amount for the services that are performed by a non-physician practitioner, if the services are:

  • Included in a treatment plan for an injury or illness where the physician performs an initial service and is involved actively in the course of treatment.
  • The Medicare-credentialed physician must initiate the patient’s care. If the patient has a new or worsened complaint, a physician must conduct an initial evaluation and management (E/M) service for that complaint, and must establish the diagnosis and plan of care.
  • The physician must see the patient at a frequency that reflects his/her active involvement in the patient’s case.
  • The incident-to service must usually be performed in the office setting, and must be part of the normal course of treatment of a diagnosis or illness.

As we wrote about last year, in its June quarterly report to Congress, the Medicare Payment Advisory Commission (MedPAC), recommended that incident-to billing for APRNs and PAs be scrapped, requiring them instead to bill directly for services they provide.

As healthcare continues to rely more on APRNs and NPs to provide care, we may see an even greater push for the elimination of incident-to billing. However, until such time, it’s critical for providers to be aware of the requirements of this rule and to ensure that they are being followed.

The Health Law Offices of Anthony C. Vitale can assist clients with compliance matters relating to incident-to as well as other billing rules. Our attorneys also can assist you should you become the target of an investigation. Give us a call at 305-358-4500 or send an email to and let’s discuss how we might be able to assist you.

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The Health Law Offices of Anthony C. Vitale