Incident-To Billing Rules: What Counts and What Doesn’t

Medicare is split into parts. Part A covers hospital stays. Part B covers outpatient visits, doctor appointments, and preventive services. Incident-to billing lives inside Part B.

A non-physician practitioner (NPP), which is the umbrella term for providers like nurse practitioners and physician assistants who are licensed to treat patients but are not medical doctors, performs a service. Under incident-to rules, that service can be submitted to Medicare under the supervising physician’s name and their National Provider Identifier (NPI), which is the unique 10-digit number the federal government assigns to every licensed healthcare provider in the country. Medicare then pays that claim as if the physician personally did the work.

Incident-to billing is restricted to private office settings. In Medicare billing, this is recorded using a Place of Service code, a two-digit number on the claim that tells Medicare where the service was delivered. For example, Code 11 means a standard outpatient physician office. Incident-to allows for 100% reimbursement only when an NPP sees an established patient with existing problems, with the supervising physician providing direct supervision.

But the location alone doesn’t make a service qualify. To qualify, there are five requirements and every single one has to be true at the same time for the same visit.

Five Rules That Must All Hold at the Same Time

Knowing the five requirements individually isn’t the challenge. The problem is that all five have to be true for the same visit simultaneously. Miss one on a Tuesday afternoon and the whole claim for that visit is non-compliant, even if Monday’s visits were clean.

1. The physician saw this patient first and created the plan

• The physician must have evaluated the condition, made the diagnosis, and written the treatment plan
• The service must be an integral part of the patient’s normal treatment, starting from the point the physician personally performed an initial service and remains actively involved in the course of treatment

2. The patient is returning, the condition is existing, the visit is a follow-up

Incident-to does not apply to new patients or to established patients who present with a new problem or diagnosis.

If a patient presents with a new complaint, the NPP must refer back to the physician for a new evaluation and management visit, and the process restarts entirely from that point.

3. The physician is immediately available during the visit

• The supervising physician must be present in the office suite and immediately available to assist during the NPP’s service. Being reachable by phone does not satisfy the requirement
• This requirement was permanently updated on January 1, 2026, per the CMS final rule, in a way that changes how it works for most practices

4. The NPP is executing the physician’s plan, not building their own

• The NPP is there to carry out what the physician already documented
• Clinical decisions outside the physician’s original plan break this requirement

5. The physician remains genuinely involved over time

• The physician must remain actively involved in the course of treatment. The service must be an integral part of the physician’s professional services, not a standalone NPP-managed episode
• The physician’s name on the original note is not enough. There has to be real, documented, continuing involvement

The January 2026 Supervision Rule Every Practice Needs to Know

This is the most consequential change to incident-to rules in years.

What this means for daily practice:

• A physician supervising from home or another location via live video now satisfies the direct supervision requirement for most incident-to services
• Historically, direct supervision required the supervising practitioner to be physically present in the office suite and immediately available.
• This flexibility was originally introduced during the COVID-19 public health emergency and extended year by year. Effective January 1, 2026, CMS made it permanent, as finalized in the CY 2026 Medicare Physician Fee Schedule Final Rule.

The exception, pulled directly from CMS’s own final rule language:

• Higher-risk surgeries with global surgery indicators 010 or 090 still require the physician to be physically present on-site. The 010 indicator covers minor procedures with 10 days of post-operative follow-up bundled into the fee. The 090 indicator covers major procedures with 90 days of bundled follow-up. For those services, in-person supervision remains required.

When the video connection drops and cannot be restored, the supervision requirement is no longer met for the duration of that gap.

For group practices, one existing rule still applies alongside the new one:

• Any physician in the group can serve as the supervising physician for a given day. It does not have to be the same physician who originally saw the patient. But the billing must go under the NPI of whoever is actually supervising that specific visit, not the physician who wrote the original plan.

Billing under the wrong physician’s NPI is one of the most consistent audit findings in group settings, and it shows up most in the four visit types that generate the bulk of compliance problems.

Four Visit Types Where Practices Get This Wrong

#1. A follow-up where the patient mentions something new

A patient comes in for a diabetes follow-up but mentions new shoulder pain. The nurse practitioner examines the shoulder, orders imaging, and documents a new plan. That shoulder examination is a new episode of care and cannot be billed incident-to, even though the diabetes portion of the same visit could qualify.

#2. A visit where the physician’s supervision ended before the NPP’s patient was seen

• Under the 2026 rule, the physician can supervise by live video from another location, but that connection must be active throughout the visit
• A physician who closed their video session at noon does not cover the NPP’s 2pm patients
• This gap is common in practices where physicians wrap their own schedule while NPPs continue seeing patients

#3. A claim filed under the wrong physician’s NPI

• The billing must reflect the NPI of the physician who was actually supervising that visit. A physician listed as supervising on paper while a different physician was physically present or connected via video is not compliant
• Auditors catch this by cross-referencing the listed physician’s own schedule

These are exactly the patterns the OIG (Office of Inspector General) is currently trained to find, and how they identify incident-to claims without any claim-level marker is more deliberate than most practices realize.

How the OIG Finds Violations Without a Paper Trail

The OIG has an active Work Plan project, announced on November 15, 2024 under project number OAS-25-01-003, reviewing Medicare Part B payments for incident-to services. The review focuses specifically on whether these services, billed under the physician’s NPI as if the physician personally provided them, actually met Medicare’s requirements.

Incident-to claims carry no modifier. A modifier is an additional two-digit code attached to a claim that gives Medicare extra context about how a service was performed. There is no such code on incident-to claims. The service looks identical to a physician-performed service in the data.

The three most common ways the OIG discovers non-compliant incident-to services are the impossible day, self-disclosure, and whistleblower complaints. The impossible day means identifying physicians who report more services in a single day than one provider could physically perform. When that pattern surfaces, chart-level review begins.

In fiscal year 2025, False Claims Act settlements and judgments exceeded $6.8 billion, the highest single-year total in the history of the statute, as confirmed by the Department of Justice on January 16, 2026. Over $5.7 billion of those recoveries involved healthcare matters.

What those charts contain, and what they need to say to survive review, comes down entirely to how the visit note was written.

What Every Incident-To Note Must Include

Documentation is the difference between a compliant practice and a repayment demand. Every incident-to visit must prove through the note that all five requirements were satisfied on that specific date.

A note that reads ‘follow-up, blood pressure checked, no changes’ tells an auditor nothing. Even if the physician was available and it was a clean follow-up on an established plan, that note cannot prove it.

Every incident-to visit note must include:

• The supervising physician’s full name
• Explicit confirmation the physician was present in the office suite or connected via live video during that specific visit
• If supervision was virtual, the platform used and confirmation the connection was maintained throughout the service
• The condition being treated and a direct reference to the physician’s original treatment plan, including the date it was established
• A clear statement the visit addressed only what that existing plan covers
• A direct statement that no new problems were identified, evaluated, or managed
• The NPP’s name and professional credential as the person who performed the visit

A best practice is for the NPP to note that the supervising physician was on-site or virtually available as part of the visit documentation. The overseeing physician can also add a brief addendum confirming they reviewed the note and agree with the treatment plan. CMS does not mandate this addendum, but it materially strengthens the record during a review.

Two documentation failures that auditors find repeatedly:

• Not updating the treatment plan after a significant change in the patient’s condition, meaning the plan on file no longer matches the care being delivered
• Not tracking which physician was supervising on a given day and by what method. An attendance log in the electronic health record (EHR), which is the digital system practices use to store patient records and billing information, or a paper sign-in sheet handles in-person supervision. For virtual supervision, document the platform name and the time the connection was active

Getting this right for Medicare is one challenge. The moment the patient carries a commercial insurance plan, the rules shift, because commercial insurers write their own policies entirely.

Why Medicare Rules Don’t Automatically Apply to Commercial Claims

Everything above covers Medicare. The moment a patient carries a commercial insurance plan, the rules can change completely.

Commercial payers may prohibit incident-to billing under circumstances that Medicare allows, and they may impose supervision requirements that differ from CMS guidelines. Some commercial payers require the NPP to be separately credentialed with them directly, meaning the insurer has individually reviewed and approved that specific provider to deliver services to their members. State Medicaid programs, which are government insurance programs for lower-income patients administered at the state level, add a further layer of variation.

Questions to confirm for every commercial payer your practice bills:

• Does this payer allow incident-to billing at all
• Does this payer require the NPP to be individually credentialed with them, separate from the physician’s enrollment
• Does this payer require supervision standards beyond what CMS mandates
• Does this payer require additional modifiers, meaning extra codes on the claim, that Medicare doesn’t ask for

Optum Behavioral Health announced that beginning in 2026, all behavioral health claims for members covered by a commercial employer-sponsored health plan must include the NPI and taxonomy code for both the billing provider and the rendering provider. Claims missing this information are rejected or denied, and all NPIs are validated against the federal provider registry. This makes it impossible to submit a claim where only the physician’s NPI appears, effectively ending incident-to billing for behavioral health commercial claims within Optum’s network.

Anthem BCBS stopped paying for incident-to services in the summer of 2024. Aetna announced a similar policy in early 2025 before walking it back after pressure from medical associations. The requirement for SA and SB modifiers identifying which type of advanced practice provider performed the service remains in place at Aetna regardless of whether the service is billed incident-to.

The direction is clear. Commercial payers are building systems to identify exactly who performed every service, and they are using that visibility to restrict incident-to reimbursement. A single billing policy applied across Medicare and commercial claims is how practices end up filing non-compliant commercial claims while believing they followed the rules. Each payer contract needs its own review, and every time a payer updates their provider manual, that review needs to happen again.

Final Thoughts

The rules have not changed. What has changed is the scrutiny around them. The OIG is actively reviewing Medicare Part B incident-to claims. Commercial payers are building claim-level systems to identify exactly who performed every service. The Department of Justice had its highest False Claims Act recovery year in history in fiscal year 2025, with over $5.7 billion coming from healthcare alone.

Most practices caught in that net were not committing fraud. They were running workflows that nobody had stress-tested against the actual requirements. An NPP seeing follow-ups without documented physician involvement. A supervision gap nobody logged. A claim filed under the wrong NPI out of habit.

The documentation standard described in this blog is the only thing that separates a clean audit from a repayment demand. If every incident-to note your practice generated this week cannot independently prove all five requirements were met on that specific date, the exposure is already there. The question is only whether anyone has looked yet.