Among the proposed changes to Medicare regulatory requirements related to billing and coverage of physician services set forth in the 2016 Medicare Physician Fee Schedule Proposed Rule (the Proposed Rule), the Centers for Medicare and Medicaid Services (CMS) addresses its current position regarding requirements for supervision of services that are billed under the “incident-to” billing rules and qualifications for auxiliary personnel furnishing such services.

Medicare billing rules permit physicians and certain non-physician practitioners (collectively, practitioners) to bill for services and supplies that are furnished “incident-to” a practitioner’s services. Incident-to services and supplies are those that are integral, but incidental, to the practitioner’s professional services.

In general, incident-to services must be furnished under the direct supervision of a practitioner and current regulations at 42 CFR § 410.26(b)(5) state that “[t]he [practitioner] supervising the auxiliary personnel need not be the same [practitioner] upon whose professional service the incident to service is based.” In the Proposed Rule, CMS indicates that this language could be interpreted as permitting a practitioner to bill for incident-to services or supplies that the billing practitioner did not directly supervise. CMS clarifies that it is the long-standing position of CMS that the practitioner billing for incident-to services must be the practitioner who directly supervised the billed-for service. CMS proposes to remove the language above from § 410.26(b)(5) and add new language explicitly stating that a practitioner billing for incident-to services or supplies must be the practitioner who directly supervised the billed-for services or supplies.

In the Proposed Rule, CMS did not further clarify whether it would consider practitioners in the same group practice/clinic to be considered the same practitioner for purposes of applying the clarified incident-to supervision requirement. CMS has previously released guidance materials stating that practitioners may bill for incident-to services supervised by another member of the same group practice. In the Proposed Rule, CMS states, “It has been our position that billing practitioners should have a personal role in, and responsibility for, furnishing services for which they are billing and receiving payment as an incident to their own professional services.” This language, particularly the phrase “their own professional services,” calls into question whether CMS would still permit the group practice/clinic option of using different physicians in the group to supervise services than the physician upon whose professional services the incident-to service is based.

If CMS does intend to revise its approach to group practice/clinic supervision of incident-to services, it would raise significant concerns for many oncology and other practices where patients undergo a series of treatments, and the supervising physician may be different from the patient’s treating physician. In some cases, the result may be that the service must be billed at a lower, non-physician rate, such as where a nurse practitioner is supervised by a physician other than the physician upon who professional services the nurse practitioner’s service is based as an incident-to service. In other cases, the result appears to be non-coverage. For example, if a physician in an oncology group practice sees a patient and establishes a plan of chemotherapy, the patient may return to the practice multiple times. If, on some of those occasions, the treating physician is not present, but other physicians in the practice are present and supervise the therapy administered by practice personnel, those other physicians likely would not see the patient or perform a separate professional service. If the physician who is not present is the one who has provided the professional services upon which the incident-to service is based, and the supervising physician has not performed such a service, does this mean that the chemotherapy drugs and administration by nursing personnel are not incident-to the services of either physician, and therefore not covered? Currently, the assumption is that the service is incident-to the services of the physician who treated the patient, and guidance regarding the Form CMS 1500 provides that the physician who supervised the incident-to service—if different from the ordering physician—is shown on the Form CMS 1500 as the rendering physician, while the group practice would be shown as the billing entity.

Note that for Stark Law purposes, group practice productivity credit for incident-to services accrues to the physician upon whose services the incident-to service is based, rather than the supervising physician/billing.

Regardless of whether the proposed change was intended as merely a clarification of the supervising physician’s status as the billing physician, or whether more substantive supervision and/or billing changes were intended, CMS should clarify. Specifically, CMS should address whether it is changing the rules applicable to supervision in group practices or otherwise requiring that the physician upon whose professional services the incident-to service is based must always supervise the services.

In addition to addressing supervision requirements, CMS also clarified its position regarding qualifications of auxiliary personnel furnishing incident-to services. In the Proposed Rule, CMS states that auxiliary personnel furnishing incident-to services must not be excluded from participation in federally funded health care programs by the Office of Inspector General or have had Medicare enrollment revoked. CMS proposes to add additional language to § 410.26(a)(1) to clarify this issue.

Finally, in further acknowledging challenges in consistent interpretation and compliance with incident-to rules, CMS seeks comments on how it could improve its oversight of incident-to billing rules. While not explicitly stated, the focus of CMS’ concern appears to be that auxiliary personnel who commonly furnish incident-to services (e.g., nurses) do not directly enroll in Medicare. CMS suggests options including: creation of new enrollment categories; mechanisms for registration for furnishing incident-to services that are short of full enrollment; modifiers to identify the types of individuals providing services and use of post-payment audits; investigations and recoupments.