Incident to billing pays an office visit at the physician rate, and it pays that rate only while the patient, the problem and the supervising practitioner line up on the same day. The conditions themselves have not been repealed. The change that landed on January 1, 2024 landed next door, in the facility split or shared policy, and it is widely reported as a change to this rule. Here is where incident to applies, where it stops, and what the record has to show when a reviewer asks who did the work.
What this covers
- Incident to pays 100 percent of the Physician Fee Schedule under the supervising practitioner’s NPI. The same visit billed under the nurse practitioner’s or physician assistant’s own NPI pays 85 percent.
- It exists in noninstitutional settings only. Hospital inpatient, hospital outpatient, emergency department and skilled nursing facility visits cannot be billed incident to.
- The practitioner has to have personally performed the initial service and stay involved in the course of treatment, so a new patient or a new problem falls outside the rule.
- The definition that changed on January 1, 2024 lives in the split or shared rule at 42 CFR 415.140, not in the office conditions at 42 CFR 410.26.
- Only the practitioner who supervised the service may bill it, and since January 1, 2026 direct supervision may be met by two way audio and video for services without a 010 or 090 global surgery indicator.
The claim carries the supervising practitioner’s name in place of the person who did the work, so the medical record is the only place the difference can be seen.The Office of Inspector General added incident to payments to its work plan on November 15, 2024, with a report expected in fiscal year 2026.
Incident to is a payment rule, not a clinical one. It lets Medicare pay for a service furnished by auxiliary personnel as though the supervising practitioner furnished it, and pay it at that practitioner’s rate (42 CFR 410.26). The care is the same either way. What changes is the amount: 100 percent of the fee schedule when every condition holds, 85 percent when one does not.
That 15 point spread is why the rule gets attention, and it is why the decision belongs in the schedule builder rather than in a note written after the visit. A practice that assigns a supervising practitioner by accident pays for the accident every month.
Who bills the visit, and at what rate
Two frameworks sit side by side and do not overlap. In a noninstitutional setting, which the regulation defines as any setting other than a hospital or skilled nursing facility, the incident to conditions at 42 CFR 410.26 apply. In a facility setting, where incident to payment is prohibited, a physician and a nonphysician practitioner in the same group who both work the visit fall under the split or shared rule at 42 CFR 415.140.
The rate follows the same line. Under section 1833(a)(1) of the Social Security Act a physician bills at 100 percent of the fee schedule, and certain nonphysician practitioners are paid at a reduced rate, 85 percent, when they bill their own services. A service billed incident to a nurse practitioner or physician assistant is paid at 85 percent as well, so the credential of the supervising practitioner matters as much as the credential of the person who saw the patient.
| Where the visit happens | Who bills | Rate | Claim marker |
|---|---|---|---|
| Office or clinic, place of service 11 | Incident to the supervising practitioner | 100 percent when the supervisor is a physician | Supervising practitioner’s NPI |
| Office or clinic supervised by a nurse practitioner or physician assistant | Incident to that practitioner | 85 percent | Supervising practitioner’s NPI |
| NPP works the visit alone, conditions not met | The NPP under their own NPI | 85 percent | None |
| Hospital inpatient or outpatient, emergency department, skilled nursing facility | Split or shared, the practitioner who performed the substantive portion | 100 percent when a physician performed it, otherwise 85 percent | Modifier FS |
Modifier FS belongs to facility claims only and has no role on an office incident to claim. When CMS updated the claims processing manual for the CY2024 split or shared policy, it carried a note that office visits are not billable as split or shared because incident to payment is available in that setting. The office answer is the incident to answer, and the two rules should never be mixed on one claim.
This is the part of revenue cycle work that decides whether a practice collects the full rate or most of it, and it starts with knowing which rule owns the visit. Teams that run medical billing services keep that mapping in the schedule itself, so a supervising practitioner is assigned per session and per location.
What January 1, 2024 actually changed
The definition that changed on January 1, 2024 sits in the split or shared rule for facility visits, at 42 CFR 415.140, and it is the piece most often described online as a change to incident to.
From January 1, 2022 through December 31, 2023, the practitioner who performed the history, the exam or the medical decision making, or who spent more than half of the total time, could be treated as having performed the substantive portion of a split or shared visit. CMS had announced that it would narrow the test to time alone. In the CY2024 Physician Fee Schedule final rule, issued November 2, 2023 as CMS-1784-F and published at 88 FR 78818, CMS reversed that plan and aligned the test with the 2024 CPT guidelines: the substantive portion means more than half of the total time spent by the physician and the nonphysician practitioner performing the visit, or a substantive part of the medical decision making (88 FR 78982 through 78985). History and exam no longer carry the visit on their own. Critical care is the exception and stays time only, because those codes do not use medical decision making. The practitioner who performed the substantive portion signs and dates the record, and modifier FS goes on the claim.
The same rule kept virtual supervision alive. It extended immediate availability to include real time audio and video through December 31, 2024, and stated that the supervising practitioner does not have to be virtually present for the whole service, only immediately available to step in (88 FR 78878 through 78880). The CY2025 final rule made virtual direct supervision permanent for a narrow set of services, incident to services performed by auxiliary personnel employed by the billing or supervising practitioner where the underlying code carries a professional component and technical component indicator of 5, and the service described by CPT 99211, and extended everything else through December 31, 2025. The CY2026 final rule went further and made it permanent for services that require direct supervision, including incident to services under 42 CFR 410.26, except services with a global surgery indicator of 010 or 090. The regulation says so in its own words at 42 CFR 410.26(a)(2).
What did not change is the office rule. Chapter 15 section 60 of the Medicare Benefit Policy Manual was revised effective January 1, 2024, and it still describes the requirements the same way it described them for years, including presence in the office suite.
Section 60 still says the practitioner must be present in the office suite and immediately available. The regulation at 42 CFR 410.26(a)(2), revised by the CY2024 through CY2026 rules, allows immediate availability by two way audio and video for services that do not carry a 010 or 090 global surgery indicator. Your Medicare Administrative Contractor restates the regulation in its own article. Read both before you write an internal policy, because a supervisor who is only reachable by phone fails either version.
The conditions an office visit has to meet
The regulation lists the conditions and the manual explains the operational detail behind them. Treat the list as one test rather than eight separate ones. A visit satisfies all of it or the claim belongs under the other NPI.
- A noninstitutional setting and a noninstitutional patient: an office, a clinic, or any other setting other than a hospital or skilled nursing facility.
- An integral, though incidental, part of the practitioner’s own service, furnished in the course of diagnosis or treatment.
- Commonly furnished without charge or included in the practitioner’s bill, and a real expense to the practice. A drug the patient bought is not covered, while administering it is.
- A type of service commonly furnished in the office or clinic, and not a service with its own benefit category. Diagnostic tests and vaccines follow their own coverage rules.
- Furnished by the practitioner, by a practitioner with an incident to benefit, or by auxiliary personnel under direct supervision.
- Auxiliary personnel who meet applicable state licensure and any other requirements the state imposes.
- Direct supervision: the supervisor present in the office suite and immediately available, or immediately available by two way audio and video for services without a 010 or 090 global surgery indicator.
- Billing by the supervising practitioner alone. The practitioner who performed the initial service and ordered the visit need not be the supervisor, but only the supervisor may bill it.
Two items on that list produce almost all of the argument. The first is the initiating service. The manual requires a direct, personal, professional service furnished by the practitioner to initiate the course of treatment of which the auxiliary personnel’s work is an incidental part, and later services at a frequency that reflects the practitioner’s continuing active participation in and management of that course of treatment. No visit interval is published anywhere, which means the practice has to be able to show the involvement it is claiming.
The second is the level of the visit. An established patient office visit is reported as 99212 through 99215 under the office and outpatient E/M guidelines, selected by medical decision making or by total time on the date of the encounter. Code 99211 is different: it describes a visit that may not require the presence of a physician, and it is the code most often furnished by clinical staff under this rule. Level selection does not change because the visit is billed incident to, and the record still has to support the level reported. That is a coding question as much as a billing one, which is where most medical coding and billing reviews begin.
Where incident to stops
Almost every failure is a scheduling decision made weeks before the claim exists, not a coding decision made at the end of the month.
| The failure | What it looks like | The correct claim |
|---|---|---|
| New patient | The practitioner has never evaluated the patient, so no course of treatment exists for the visit to be incidental to | Bill under the NPP’s own NPI at 85 percent |
| Established patient, new problem | The NPP works up a complaint the practitioner never diagnosed or treated | Bill under the NPP’s own NPI, or have the practitioner see and initiate the problem first |
| Facility setting | Hospital inpatient or outpatient, emergency department, or a skilled nursing facility | Split or shared in the facility, or the NPP bills directly. Incident to is not available |
| No supervisor available | The supervising practitioner is off site, or unreachable by two way audio and video, when the service is furnished | The condition fails for that service. Bill under the NPP |
| Wrong biller | The practitioner who wrote the plan bills while a different practitioner supervised | The supervising practitioner bills, and is named on the claim |
None of these outcomes costs the practice the entire charge. Each one moves the service to the 85 percent rate or to a different rule. What it costs is the 15 point difference plus the rework, and the cost repeats when the same scheduling pattern produces the same claim for a month of visits.
An incident to claim names the supervising practitioner as if that practitioner furnished the service. Nothing on the face of the claim tells a reviewer who performed the visit, so the Office of Inspector General added Medicare Part B Payments for Incident To Services to its work plan on November 15, 2024 under project OAS-25-01-003, with a report expected in fiscal year 2026. Its stated objective is to determine whether Part B payments for incident to services complied with Medicare requirements.
The record that answers the audit
The defending file is short, and it can be assembled while the patient is still in the building rather than a year later under a document request.
Date, practitioner, the problem that was evaluated, and the plan of care that followed. If the practitioner’s last note is silent on the problem now being managed, the thread is broken.
The note should say the visit is a follow up under the plan the practitioner established, and name it. A standalone assessment reads like an independent visit, because that is what it is.
Record who supervised, where that practitioner was, or that they were immediately available by two way audio and video, and the window of time. Vague availability language is what auditors test.
Document the total time on the date of the encounter or the medical decision making elements that support the code. The level has to come from the record rather than from habit.
An employment, lease or contract relationship, and a charge that is a real cost to the practice that bills it. The manual turns on that expense, so the payroll record is a billing document.
Pull incident to claims by supervising practitioner and test the failures in the table above. Fix the schedule, not the note, because the note is describing what happened.
Instructions vary by Medicare Administrative Contractor, so check your own. Novitas Solutions instructs practices to put the name of the practitioner who performed the initial service and ordered the nonphysician service in item 17, the supervisor’s NPI in the lower unshaded part of item 24J when the ordering practitioner is not the supervisor, and the supervisor’s signature in item 31 when someone other than the ordering practitioner supervised. Our team runs this mapping for practices and clients, and you can read more about MedFactor and the standards we audit against.
Behavioral health and care management run on general supervision
One part of the rule got easier, and it matters to behavioral health practices. 42 CFR 410.26(b)(5) now sets three supervision levels. Direct supervision is the default. Designated care management services may be furnished under general supervision. Behavioral health services furnished by auxiliary personnel incident to a practitioner’s service may also be furnished under general supervision, which means the billing practitioner directs and controls the service without being present, or immediately available, while it is furnished.
The behavioral health change arrived in the CY2023 Physician Fee Schedule final rule, which amended the incident to regulation so those services could be furnished under general supervision (87 FR 69545 through 69548). The CY2024 rule extended the same treatment to rural health clinics and federally qualified health centers by revising 42 CFR 405.2413(a)(5) and 42 CFR 405.2415(a)(5), effective January 1, 2024. In practice, a counselor, care manager or community health worker can furnish a qualifying service while the billing practitioner is elsewhere, and the billing practitioner still bills for it.
Two boundaries are worth keeping straight. Incident to is a Medicare rule, built on the Part B benefit and the reassignment rules, and other payers are free to write their own. State Medicaid programs and commercial plans set their own supervision, ordering and authorization policies, and many simply pay a percentage of the physician rate for an NPP’s service with no incident to category at all. The codes that carry most applied behavior analysis volume, including 97153, are paid mainly by those other payers, and a claim is not made defensible by a Medicare condition the payer never adopted.
Questions about incident to billing
Yes, in noninstitutional settings. A service furnished by auxiliary personnel, including a nurse practitioner or physician assistant working as auxiliary personnel, may be billed under the supervising practitioner’s NPI when the conditions at 42 CFR 410.26 are met: an initiating service by the practitioner, continuing involvement in the course of treatment, a service of a type commonly furnished in the office, and direct supervision. Nothing in the 2024, 2025 or 2026 Physician Fee Schedule rules repealed it.
No. The rule requires a personal professional service by the practitioner to initiate the course of treatment before the auxiliary personnel’s service can be incidental to it. A new patient has no course of treatment yet, so the visit has nothing to attach to. Bill it under the nurse practitioner’s or physician assistant’s own NPI at 85 percent of the fee schedule.
Not always, since January 1, 2026. The CY2026 Physician Fee Schedule final rule permanently allows direct supervision through real time two way audio and video for services that require it, including incident to services under 42 CFR 410.26, except services with a global surgery indicator of 010 or 090. Audio only does not qualify. Chapter 15 section 60 of the benefit policy manual still describes office suite presence, so read the regulation and your contractor’s article.
No. Office visits cannot be reported as split or shared, because incident to payment is available in that setting. The 2024 definition of the substantive portion, more than half of the total time or a substantive part of the medical decision making, applies to facility visits, and modifier FS is reported on those claims only. It says nothing about the office conditions.
The service can still be payable, just not at the physician rate. Bill it under the nurse practitioner’s or physician assistant’s own NPI at 85 percent of the fee schedule, provided that practitioner is enrolled in Medicare and the service is within their scope of practice. The exception is a practitioner with no enrollment at all, whose claims are not payable under someone else’s NPI.
Rarely in the same form. Incident to is a Medicare construct built on the Part B benefit and the reassignment rules. Commercial payers and state Medicaid programs write their own supervision, ordering and credentialing policies, and many simply pay a percentage of the physician rate for a nurse practitioner’s or physician assistant’s service with no incident to category. Read the contract and the provider manual before you carry the Medicare answer over.
The person who furnished the service documents it, and the claim is submitted under the supervising practitioner’s NPI. Medicare does not require the supervising practitioner to co-sign the note, and a signature by itself is not evidence of availability. What the record has to show is the initiating service, the continuing involvement, and who was immediately available when the service was furnished.
The bottom line
Incident to billing still pays the full physician rate for work a physician’s team performs in an office, and it still asks for the same three things it always asked for: a practitioner who started the care, a problem that practitioner already owns, and a supervisor who is available when the service is furnished. The 2024 change was to the facility split or shared definition, and the supervision flexibility that looked temporary during the pandemic years is now permanent in the regulation for everything except the 010 and 090 global surgery codes. Tie the rule to a schedule and a monthly sample, and the 15 point gap stops arriving as a surprise.
Sources and further reading
- Section 410.26 (eCFR)
- Section 415.140 (eCFR)
- BP102C15 (CMS) [PDF]
- 2023 24184.txt (federalregister.gov)
- Calendar year cy 2024 medicare physician fee schedule final rule (CMS)
- R12604cp (CMS) [PDF]
- MM13592 updates split or shared evaluation management visits (CMS) [PDF]
- Calendar year cy 2025 medicare physician fee schedule final rule (CMS)
- MM14315 medicare physician fee schedule final rule summary cy 2026 (CMS) [PDF]
- Calendar year cy 2026 medicare physician fee schedule final rule cms 1832 f (CMS)
- Incident services supplies (CMS)
- Medicare part b payments for incident to services (HHS)
- 00150920 (novitas-solutions.com) [PDF]
Which of your office visits qualify for the physician rate?
Send us one month of office visit claims with the supervising practitioner listed on each line, plus the schedule for the same dates. We will test every incident to claim against the conditions in 42 CFR 410.26, mark the visits that should have gone out under the NPP’s own NPI, and point to the notes where the initiating service and the plan of care are missing. Our team audits and runs revenue cycle work for medical practices, and you can read how we work about MedFactor.
Request a free incident to billing reviewThis article describes Medicare Part B billing rules in force at the time of writing and general billing practice, not legal or coding advice, and commercial and Medicaid payer rules differ, so confirm the requirement in the regulation, the manual revision and your contractor’s instructions before you change how a claim is submitted.
