With the May 11, 2023 expiration of the federal public health emergency (PHE) for COVID-19, many operational flexibilities healthcare providers used during the PHE will now sunset. Some flexibilities end immediately while others remain available through the end of 2023. Notably, for Medicare Part B suppliers that rely on “incident to” billing—including ambulatory infusion centers and many physician practices—practitioners can continue to provide “direct supervision” through virtual presence until the end of 2023.

Although this continued flexibility is significant for healthcare providers who have relied on remote supervision of auxiliary personnel (such as nurses) for incident-to billing, it remains important not to interpret this flexibility too broadly. There are—and always have been—several additional requirements under the incident-to billing rules. As healthcare providers prepare for the end of this flexibility come 2024, now is a good time to review overall compliance with the incident-to requirements.

Remote Supervision for “Incident to”

In some circumstances, certain services and supplies—including those furnished by auxiliary personnel, such as drug infusions performed by a nurse—can be billed incident-to the professional services of a physician or other billing practitioner. When satisfied, the incident-to rules allow practitioners to bill in their names, even if they did not personally furnish the services.

The direct supervision requirement is often the main hurdle for services billed incident-to. Prior to the PHE, “direct supervision” in the office setting generally meant that the supervising practitioner must be physically present in the office suite and immediately available to furnish assistance and direction throughout the performance of the procedure (though not necessarily present in the same room). Counterintuitively, direct supervision by the “rending” provider is still required even if the auxiliary personnel performing the service—say, a nurse practitioner—could furnish the services without supervision (or a lower level of supervision) under state law.

In response to the PHE for the COVID-19 pandemic, the Centers for Medicare & Medicaid Services (CMS) temporarily revised the definition of “direct supervision” through an interim final rule published in April 2020. Under the revised regulation, supervising practitioners can provide direct supervision remotely by being “immediately available” through virtual presence using real-time interactive audio and video technology rather than by being physically present in the office. Unlike some PHE flexibilities that end on May 11, this remote supervision flexibility extends through the end of the calendar year during which the PHE expires, specifically the end of 2023.

Reviewing “Incident to” Compliance

Although this remote supervision flexibility temporarily remains available, the additional incident-to requirements were unaffected by the PHE flexibilities. As healthcare providers prepare for the end of the remote supervision flexibility, now is a good time to review overall compliance with the incident-to requirements.

As a threshold matter, services billed incident-to must be an integral, although incidental, part of the practitioner’s professional services in the patient’s treatment course. This does not mean that a professional service performed by the billing practitioner must always accompany each incident-to service. But it does mean that the incident-to service must be part of the practitioner’s course of treatment. The practitioner must first establish the course of treatment, and the incident-to service be a part of (i.e., incidental to) the course of treatment. The practitioner, for example, can perform the initial service and subsequent services of a frequency that reflects their continuing active participation in and management of the course of treatment. If, however, the practitioner never was, or no longer is, involved in the course of treatment, the services cannot be billed incident-to because they cannot reasonably be considered incident to the professional services of the practitioner.

The services must also be of the type commonly furnished in a physician’s office. Services that would be medically inappropriate to furnish in a physician office cannot be billed incident-to. On the other hand, drugs and biologicals that are commonly provided in a physician’s office can be billed incident-to. Further, because these services are billed under a practitioner’s name incidental to the practitioner’s services, they generally also must be services that do not have their own benefit category, as does certain diagnostic testing.

If furnished by auxiliary personnel, the services and supplies must be furnished in a manner consistent with state law, including professional licensure and scope of practice restrictions. They must, as noted above, be furnished under the direct supervision of the supervising practitioner, even if state law permits a lower level of supervision. The supervising practitioner must have an employment or contractual relationship with the billing entity with which the practitioner has a valid reassignment. Although they must be billed under the name of the supervising physician, in a physician-directed clinic—i.e., a clinic where a physician is always present to perform professional services, each patient is under the care of a clinic physician, and nonphysician services are under medical supervision—the supervising practitioner need not be the same practitioner who ordered the service.

Like many aspects of Medicare, the incident-to requirements are as numerous as they are complex and the consequences of noncompliance are severe. Providers may experience CMS audits in which reimbursement is denied, or amounts are recouped for supplies and services if the incident-to requirements are not met. These audits can be particularly devastating when high-dollar drug infusions are denied because this leaves the provider bearing the full acquisition cost of the drug. Noncompliance with incident-to billing requirements can also result in violations of the federal False Claims Act (and state analogs), which can result in substantial fines, treble damages, and exclusion from federal healthcare programs.

Implications for Healthcare Providers

As the remote supervision flexibility remains in place only through the end of 2023, providers should take steps now to prepare for the return to in-person direct supervision. Create a transition plan and work with supervising practitioners and auxiliary personnel to ensure that all services are properly supervised to avoid potential false claims. Now is also a good time to review current and pre-PHE practices to verify that all incident-to requirements are satisfied and refresh, or create, a written policy that facilitates compliance with the incident-to requirements.

If you have any questions about the implications of incident-to requirements, please contact the authors.