Persistent Misinformation Surrounds Incident-To Billing Practices

Medicare’s “Incident-To” Rule: Persistent Misunderstandings Among Healthcare Consultants

A major consulting organization has once again published misleading information about Medicare’s “incident-to” billing requirements, creating potential compliance risks for healthcare providers who rely on such guidance.

The consulting firm recently released an article that perpetuates outdated information about supervision requirements for incident-to services, which allow certain non-physician practitioners’ services to be billed under a physician’s provider number when specific conditions are met.

At issue is the firm’s erroneous claim that physicians must be physically present in the office suite for incident-to billing to be valid. The article incorrectly states that “the physician need not be in the room, but must be within the same office” for direct supervision requirements to be satisfied.

This guidance is at least five years out of date. In spring 2020, as part of the COVID-19 pandemic response, the Centers for Medicare & Medicaid Services (CMS) substantially modified the definition of “direct supervision” in regulation 42 CFR § 410.32(b)(3)(ii). The updated rule states that “the presence of the physician or other practitioner includes virtual presence through audio/visual real time communication technology.”

What began as a temporary pandemic measure has since been extended multiple times. Initially set to expire at the end of the public health emergency, CMS extended the virtual supervision allowance through 2024, then 2025. Most significantly, in the 2026 Physician Fee Schedule, CMS has made this change permanent.

This means physicians can now provide the required direct supervision via smartphones or other devices capable of real-time audio/visual communication without being physically present in the office. This represents a significant shift in practice management flexibility that many providers may be unaware of if they’re following outdated guidance.

This isn’t the only area where the consulting organization has provided questionable information. In a previous publication, they incorrectly asserted that incident-to billing cannot be used when a patient presents with a new problem. This contradicts the clear language in the federal regulation 42 CFR 410.26(b)(2), which explicitly permits incident-to billing “in the course of diagnosis or treatment of an injury or illness.”

The regulation’s inclusion of “diagnosis” is critical, as diagnosis typically applies to new rather than established conditions. This contradicts policies from some Medicare Administrative Contractors (MACs) that claim non-physician practitioners cannot diagnose while billing incident-to.

The stakes for healthcare providers are significant. Incident-to billing allows services performed by non-physician practitioners like nurse practitioners and physician assistants to be reimbursed at 100% of the physician fee schedule rather than the 85% these practitioners would receive billing under their own provider numbers.

For medical practices navigating complex billing regulations, receiving accurate guidance is essential. Relying on outdated or incorrect interpretations could lead to improper billing practices, potential audits, and financial penalties.

Healthcare providers should verify regulatory information directly from authoritative sources. The Electronic Code of Federal Regulations (ECFR) website provides access to the current regulations at 42 CFR 410.32(b), though it may not yet reflect the permanent status of the virtual supervision allowance established in the 2026 Physician Fee Schedule.

As healthcare regulations continue to evolve, especially following pandemic-era flexibilities, practices should establish verification processes for compliance guidance rather than relying solely on third-party interpretations. When experts disagree about regulatory requirements, requesting specific citations to relevant regulations allows providers to evaluate competing claims directly.

With telehealth and virtual care becoming increasingly integrated into healthcare delivery models, understanding the current state of supervision requirements is crucial for practice management and compliance strategies going forward.