Medicare has a policy called “incident to,” wherein physicians bill Medicare using their National Provider Identifier (NPI) for services performed by their employees. This allows a physician to bill for services like phototherapy, for example, even though the actual service may be performed by an appropriately trained medical assistant who cannot bill Medicare directly for services. Having certain procedures performed by staff makes sense and has a positive impact on efficiency and the physician’s time. However, “incident to” billing gets more complicated when the employee has an NPI and is able to bill Medicare on his/her own, as is the case with Physician Assistants (PA) and Nurse Practitioners (NP).

Because this topic is frequently misunderstood, it often leads to incorrect billing. This review is intended to help practices who are considering hiring a PA, and those who already employ PAs, be sure incident to billing is being done correctly in order to avoid a potential problem in case of an audit.


PAs are able to bill Medicare for services using their own NPI, however those services are reimbursed at 85 percent of the physician’s fee schedule. In addition, PAs must accept Medicare assignment. Services that qualify, and are billed incident to the physician’s service, are billed using the physician’s NPI and reimbursed at 100 percent of the physician’s fee schedule. In this review, we will focus on services provided in the physician’s office, since that is where most dermatology services are performed.

Incident to is specific to Medicare, however some commercial insurance companies have developed similar policies. In order to ensure correct billing—and reimbursements—it is important to understand the incident to policy of each insurance company with which your practice contracts.


1. The service must be rendered under the direct supervision of the physician (not necessarily in the same room, but in the office suite).

2. The services are an integral part of the physician’s services.

3. The physician must initiate treatment and see the patient at a frequency that reflects active involvement in the patient’s case. New patients and established patients with new problems must be seen and have treatment initiated by the physician to bill using incident to.

4. There must be a valid employment arrangement between the physician and PA.

5. The physician cannot hire and supervise a professional whose scope of practice is outside the physician’s own scope of practice and bill those services as incident to.

7. In a group practice, any of the member physicians can provide the direct supervision to qualify for incident to.

Incident to is defined as services that are furnished incident to a physician’s professional services when those services are furnished as an integral, although incidental, part of the physician’s personal professional services in the course of diagnosis or treatment of illness, and the services are performed in the physician’s office or the patient’s home.


To qualify for payment under the incident to rules, services must be part of the patient’s normal course of treatment, during which a physician personally performed an initial service and remains actively involved in the ongoing course of treatment. This means the physician must initiate treatment for any new patient or new problem. An established patient with a new lesion identified and biopsied by the PA could not be billed incident to the physician’s services unless the physician was to personally evaluate the lesion, make a diagnosis, initiate the plan to perform the biopsy, and then remain involved in the patient’s care.

Criteria for billing incident to the physician’s services are listed in Table 1.

Know the Requirements

In short, incident to is straightforward, but with many requirements. Some of the requirements decrease efficiency to the degree that the difference of 15 percent reimbursement is not worth the time spent meeting the criteria for some simple new problems, such as a new seborrheic keratosis. Each physician/PA team will have to decide where and if this policy fits into their daily practice.

Please see for full details.

Jennifer Winter PA-C practices in Olympia, Washington with Dermatology and Allergy Specialists of Olympia. She is involved in her national organization the Society of Dermatology Physician Assistants and is passionate about educating patients and the public about the specialty of dermatology.

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