“Incident to”: What you need to know

By Faith C. M. McNicholas, RHIT, CPC, CPCD, PCS, CDC, Manager, Lead Coding and Reimbursement Strategist, May 1, 2023

Academy coding staff address important coding topics each month in DermWorld Coding Consult. Read more Derm Coding Consult articles.

What is “incident to”?

“Incident to” is defined as services or supplies that are furnished “incident to” a dermatologist’s professional services when the services or supplies are furnished as an integral, although incidental, part of the dermatologist’s professional services in the course of the diagnosis or treatment of an injury or illness. Such services must be performed under the direct supervision of the dermatologist in the office or the patient’s home.

To qualify as “incident to” service(s), the dermatologist must initiate treatment and see the patient at a frequency that reflects their active involvement in the patient’s case. This is true for both new and established patients being seen for new problems. Qualifying “incident to” services must be provided by a caregiver qualified to provide the service, that is directly supervised by the dermatologist, and represents a direct financial expense to the dermatologist (e.g., a W-2 or leased employee, or an independent contractor).

After the initial encounter with the dermatologist, the non-physician clinician (NPC) can continue with subsequent patient encounters and bill the services under the dermatologist’s National Provider Identifier (NPI) number. During the subsequent encounters, the dermatologist must be immediately available to render assistance/guidance, if necessary, should a situation arise during the NPC and patient encounters. Being “immediately available” means the dermatologist must be present in the same office suite or another room of the patient’s home during the encounter but not necessarily physically present in the same room with the NPC and/or patient. The patient record must document that the essential requirements for “incident to” service have been met.

In a group practice, direct supervision can be provided by any physician member of the group practice that is present in the office on the day the service is provided, even though it may be a different dermatologist from the one that initiated the care. “Incident to” services can also be reported using the NPI number of the dermatologist providing direct supervision (immediately available) on the date of service, not necessarily the one that initiated the care plan.

Medicare allows 100% of the Medicare Physician Fee Schedule (MPFS) payment for “incident to” services when the NPC provides a service that meets the requirements detailed in the Medicare Benefit Policy Manual, Chapter 15, Section 60 (PDF) (Services and Supplies Furnished “incident to” a Physician’s/NPP’s Professional Service)

Note: If a dermatologist is not immediately available in the same office suite or home while the professional service(s) are being provided by the NPC, this disqualifies the encounter to be billed as an “incident to” to a Medicare Administrative Contractor (MAC).

In such cases, the encounter can be reported using the NPC’s NPI number and reimbursement will be paid at 85% of the MPFS.

Medicare coverage for “incident to” services

Medicare pays for services rendered by employees (including leased employees and independent contractors) of a dermatologist or a dermatologist-directed clinic only when all “incident to” criteria are met. Coverage is available for the services of such NPCs as nurses, technicians, and therapists when furnished “incident to” the professional services of a dermatologist. Therefore, services provided by NPCs would only be considered “incident to” if all the above conditions are met. If the conditions are not met, the service is not truly “incident to” and cannot be billed under the physician’s NPI. As such, claims reported using the NPC’s NPI number will be reimbursed at 85% of the MPFS.

“Incident to” service performed outside the office

When ancillary personnel performs services outside the office (e.g., in a patient’s home or an institution), Medicare covers their services as “incident to” a dermatologist service only if there is direct personal supervision by the dermatologist. However, services provided by ancillary personnel in an institution (i.e., skilled nursing facility, nursing, or convalescent home) present a special problem in determining whether direct dermatologist supervision exists. Using the telephone as a form of being available or being located somewhere in the facility by the dermatologist/NPC does not constitute direct supervision.

Some services may be covered under the “incident to” provision when provided by ancillary personnel that is employed by the dermatologist and working under their direct supervision. However, many of these same services may not be covered when they are provided to hospital patients or nursing facility residents because the services do not ordinarily require performance by a dermatologist and they are typically provided by personnel who are not directly employed by the dermatologist and/or under their supervision in the hospital or nursing facility settings. Services such as therapeutic injections fall into this category.

“Incident to” service in the patient’s home

“Incident to” services in patients’ homes require the physical presence of the dermatologist to qualify. However, exceptions to this direct supervision requirement apply to homebound patients in medically underserved areas where there are no available home health services for certain limited services as listed in Pub 100-02. Chapter 15 Section 60.4 (B) (PDF).

In this instance, the dermatologist need not be physically present in the home when the service is performed, although general supervision of the service is required. The dermatologist must order the services, maintain contact with the nurse or other employees, and retain professional responsibility for the service.

A second exception applies when the service at home is an individual or intermittent service performed by personnel meeting pertinent state requirements (e.g., nurse, technician, or physician extender), and is an integral part of the physician’s services to the patient.

Medicare defines a homebound patient as an individual considered to be confined to their home but is not necessarily bedridden. The patient’s condition should be such that there exists a normal inability to leave home and, as a result, leaving their home would require a considerable and taxing effort. If the patients do in fact leave the home, the patients may nevertheless be considered homebound if the absences from the home are infrequent or for periods of relatively short duration.

Therefore, Medicare considers beneficiaries to be homebound if they have a condition due to an illness or injury which restricts the individuals’ ability to leave their place of residence except with the use of special transportation, or the assistance of another person or if they have a condition which is such that leaving their home would further endanger the patient’s health or condition.

Aged persons who do not often travel from their homes because of feebleness and insecurity brought on by advanced age are not considered confined to their homes. If the patients are not considered “homebound,” Medicare cannot pay for the service(s). There is no place of service code for ‘homebound.’ However, the term ‘homebound’ must appear in box 19 on the CMS-1500 claim form or the electronic equivalent.

Note: This coverage should not be considered as an alternative to home health benefits where there is a participating home health agency in the area that could provide the needed services.

Appropriate billing for “incident to” service

Services rendered “incident to” a dermatologist’s service should be billed under the employing dermatologist’s NPI number or in the case of a physician-directed clinic the supervising physician‘s NPI number. The services will be reimbursed as if the dermatologist personally performed the service. There is no modifier required. If the dermatologist is non-participating, then the services can be billed as either assigned or non-assigned.

“Incident to” billing is paid at 100% of the MPFS, whereas the NPC billing under their own NPI number is paid at 85% of the MPFS.

Do all payers recognize “incident to” services?

“Incident to” billing is unique to services provided to Medicare beneficiaries and does not apply to private payers. Please check with your participating private payer to ascertain rules and guidelines on billing for services provided by NPCs under the direct supervision of the dermatologist.

“Incident to” billing guidance:

• Medicare for “incident to” services

• “Incident to”, revisited

• AADA Coding Resource Center

More coding guidance and resources can be viewed on the AADA Coding Resource center at staging.aad.org/coding.

Additional DermWorld Resources