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Navigating the Complexities of Incident-To Billing: Compliance Challenges and Expert Disagreements

Incident to billing compliance challenges in healthcare

In a stark reminder of the complexities and potential pitfalls of incident-to billing, Graybill Medical Group Inc. in California recently settled with the HHS Office of Inspector General (OIG) for $1.061 million. This settlement followed Graybill’s self-disclosure to the OIG regarding their incident-to billing practices. According to OIG, Graybill billed Medicare for services performed by nonphysician providers (NPPs) incident to a physician’s services without meeting the necessary requirements. The physicians did not initiate the plan of care or remain actively involved in the course of treatment, as mandated by the incident-to rules. Additionally, claims were submitted for services performed by NPPs who were not properly credentialed with Medicare or TRICARE.

Incident-to billing can offer higher reimbursement rates for services provided by NPPs, such as physician assistants and nurse practitioners. These services, when billed incident to a physician’s care, are reimbursed at 100% of the Medicare Physician Fee Schedule, compared to 85% when billed under the NPP’s own National Provider Identifier (NPI). However, to qualify for incident-to billing, the physician must establish the course of treatment and provide direct supervision, which can now include virtual supervision.

Despite the potential financial benefits, incident-to billing is fraught with compliance risks. Attorney David Glaser points out that regulations and Medicare manuals do not explicitly restrict NPPs from treating new problems under incident-to billing, yet many Medicare administrative contractors (MACs) and industry experts maintain that NPPs cannot treat new problems. This conflicting interpretation can lead to confusion and potential overpayments.

Jean Acevedo, president of Acevedo Consulting, emphasizes that incident-to billing can be a compliance minefield. She notes that physician practices often misunderstand key requirements, such as the need for NPPs to be properly credentialed with Medicare. Additionally, the term "continuing involvement of physicians" remains undefined, leading to uncertainty about how often physicians must see patients to support incident-to billing.

The Graybill Medical Group case underscores the high stakes involved in incident-to billing. The $1 million settlement highlights the significant financial risks associated with non-compliance, particularly given that the 15% differential between the full and reduced reimbursement rates typically forms the basis for settlements. This case also illustrates the broader challenges faced by healthcare providers in navigating the intricate and sometimes contradictory regulations governing incident-to billing.

Incident-to billing presents a lucrative opportunity for healthcare practices but also comes with substantial compliance risks. The disagreements among experts, coupled with the complex regulatory landscape, make it essential for providers to stay informed and diligent in their billing practices. Engaging in regular compliance reviews and seeking expert advice can help mitigate these risks and ensure adherence to Medicare rules.

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