What Is Incident-to Billing & Why You Should Avoid It?

One of the most challenging issues for NPs comes down to billing for services. After having performed a thorough history and physical, prescribing a culturally competent and evidence-based treatment, proper documentation is essential for the success of a practice.  For NPs billing Medicare, they will receive 85% of the physician payment schedule (there is really no rhyme or reason as to how they arrived at this number). Private insurers vary on their reimbursement rates from 100% to something less.

Using electronic health records (EHRs) has somewhat eased the billing mystery by ensuring that certain documentation is completed and justified before submitting the claim. But before we get into billing, every NP will need to get a National Provider Identifier (NPI). The NPI replaces any and all previous identifiers. The National Provider Identifier initiative was mandated by the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and requires that NPIs be used by health plans, health care clearinghouses, and health care providers that process claims, handle claim status inquiries/responses and eligibility inquiries/responses, as well as other transactions. The NPI is a 10-digit number and it is a good idea to memorize this number or keep it handy since it is now often asked for when phoning in a prescription to the pharmacy instead of giving your DEA number. Nurse practitioners can apply for an NPI by going to www.cms.hhs.gov/nationalProvIdentstand

Incident-to Billing

Many NPs working for physicians bill Medicare using “incident-to.” Incident-to billing is only applicable for Medicare and is not recognized with other carriers or even with Medicaid. The implication is that the service is being billed “incident-to” the physician by the NP. One can try to make sense of the Medicare Carrier Manual on Incident-to billing that can be found here though it is certainly not as easy read. In a nutshell, incident-to billing can only be used for office visits and not in institutional settings. Incident-to billing assumes that an established patient has already been physically seen by a physician who established the diagnosis and treatment plan. The NP technically can follow-up with this patient and bill the service as incident-to (which would be 100% of the physician payment schedule), However, if the NP was seeing a patient with an established diagnosis of diabetes and on a  follow-up visit, has a “new” problem such as knee pain, the NP can NOT bill this new diagnosis as incident-to unless the physician physically examined the patient. As far as documentation is concerned, both the physician and the NP would have to write their own substantive notes on the new diagnosis in order to collect 100% otherwise the NP can see the patient with the new diagnosis of knee pain, establish a treatment plan but then bill at 85%

Finally, even for established diagnoses, incident-to billing assumes that the physician is physically present in the office at all times when the NP is seeing the patients – there is very little flexibility in the language with this and something as simple as the physician stepping out of the office for lunch, would preclude the NP billing under incident-to.

What To Do

Obviously, incident-to billing has many stipulations which are not readily understood. I believe that all NPs should be billing using their own NPI numbers regardless of physician presence. Not only is this proper billing, it gives NPs visibility and data collection capabilities that may otherwise have been unnoticed. While this may be difficult to explain to a physician employer who assumes that the NP can bill at 100%, the strict language of incident-to and the possibility of a Medicare audit with fines for any violations should make this easier to understand.

Please be sure to consult with a billing expert if there are any specific questions on this oft confusing topic.





I’m Dr. Stephen Ferrara, a practicing Nurse Practitioner with over 10 years of clinical experience. I’m a senior clinical associate at a large urban hospital system in the Bronx, NY and I’ve owned and operated the largest Nurse Practitioner retail based clinic operation in New York State. I have experience in college, correctional and men’s health.

I have my Bachelor’s degree in Biology and Nursing as well as my Master’s degree, and recently I attained the Doctor of Nursing Practice degree! I’m active within my state’s nurse practitioner association and have lectured at numerous conferences.

In addition to blogging here at OnlineNursePractitionerPrograms.com, for the past 3 years I’ve authored A Nurse Practitioner’s View. I have a passion for health care technology and integrating evidence-based practice into daily practice.Thanks for stopping by! I hope you find the information on this blog useful for your educational and career endeavors into the field of nursing.