Avoiding Claim Denials: Proper Use of Incident-to and Supervisory Billing

The United States experiences growing mental health service requirements surpassing the available number of licensed clinicians. As a result, some private insurers and Medicaid programs enable billing for services provided by provisionally licensed therapists (associates) under their supervision. In fact, the reimbursement system of Medicare operates with strict guidelines that exclude payment for work performed by supervised therapists. The concerns regarding incident-to-billing and supervisory billing create significant uncertainty, especially for these cases.

What is Incident-to-Billing?

Incident-to-billing is a Medicare provision that allows non-physician practitioners (like nurse practitioners or physician assistants) who work under physician supervision to bill their services using their supervising physician's National Provider Identifier number (NPI). The physician fee schedule reimbursement reaches 100% when incident-to-billing occurs instead of the 85% non-physician rate using their individual NPI.

To qualify for incident-to-billing, several criteria must be met:

• Initial Service: The physician needs to perform the initial patient visit, establish a diagnosis, and create a treatment plan.
• Ongoing Involvement: Medical providers must stay directly engaged with all treatment decisions for their patients throughout care.
• Supervision: A physician must maintain an active onsite presence in the office suite to supervise the service while being available for immediate assistance during the service.
• Location: Such services must be provided outside hospital facilities through a physician's office.
• Scope of Practice: The healthcare services need to match the practice boundaries of non-physician practitioners and follow all state laws.

Non-physician practitioners providing services outside their NPI requirements must submit them under their own NPI, resulting in lower reimbursement.

What is Supervisory Billing?

Supervisory billing is an approach in which a licensed clinical practitioner bills for work completed by their supervised provisionally licensed therapist. Use of this method exists primarily within private insurance and Medicaid settings but is not recognized by Medicare.

Key aspects of supervisory billing include:

• Training Purpose: The supervisee is gaining clinical experience required for full licensure.
• Billing: The supervising licensed clinician bills for the services under their own NPI.
• Supervision: Each state and payer prescribes different levels of supervision requirements which mostly include routine monitoring of the supervisee's work.
• Reimbursement: Supervisory billing gets payment based on payer-specific policies though Medicare specifically refuses to reimburse for therapy services delivered by unlicensed or provisionally licensed individuals.

Incident-to-Billing vs. Supervisory Billing

The key difference is that incident-to-billing is based on clinical necessity and direct physician involvement. In contrast, supervisory billing is based on licensure status and training, not active clinical oversight.

Common Pitfalls in Incident-To-Billing

Practices often encounter standard implementation mistakes which lead to repeated rejections, audits and potentially trigger legal consequences. These are essential steps that you must monitor to remain compliant:

• Not Understanding State-Specific Guidelines

Practices fail to recognize the different specifications Medicare has for each state. These unique rules applied by Medicare Administrative Contractors can trigger denials, and compliance issues during auditing procedures.

• Inadequate Staff Training

Training deficiencies among staff members will cause them to misunderstand billing rules and documentation needs. The absence of proper awareness causes healthcare providers to file incorrect claims, compliance risks, reduces their reimbursement potential, and increases audit vulnerability.

•  Billing for Ineligible Services

Only specific services qualify for incident-to billing. Submitting claims for non-covered services under this method violates guidelines and may lead to denials or allegations of improper billing practices.

•  Supervision Requirement Violations

Incident-to-services remain valid only if the supervising physician physically remains present at the site. The condition must be met otherwise the claim becomes invalid and repeated violations could expose the provider to Medicare audit risks.

• Documenting New Problems as Incident-To

Only follow-up care under an existing plan qualifies. Addressing new issues without physician input violates incident-to rules, leading to incorrect billing and potential compliance challenges.

•  Improper Use in Ineligible Settings

Incident-to-billing is restricted to physician office settings. Using it in hospitals or skilled nursing facilities results in automatic claim denials and raises compliance concerns for the provider.

How to Set Up an Incident-To-Billing to Avoid Claim Denials?

Build a compliant, efficient, and profitable system for incident-to-billing by following these simple steps. These will help reduce denials and maximize healthcare reimbursement:

1. Define Clear Roles in Your Practice

Make sure everyone on your team knows their part in the billing process. The physician should perform the first face-to-face visit, create a care plan, and supervise. PAs or NPs must also follow this care plan during follow-ups. Also, the mental health billing team should review each visit to see if it qualifies before billing. Clear roles help avoid confusion and support compliance.

2. Create a Strong Documentation Workflow

Accurate documentation is the key to getting paid and staying audit-ready. The physician must document the care plan clearly. When PAs or NPs see the patient, they should note that they follow this plan. Furthermore, new issues should be recorded and billed separately. Always confirm and document the physician's supervision before billing.

3. Train and Audit Your Staff Regularly

Ongoing staff training keeps your team updated and your claims compliant. Teach your team Medicare’s rules for incident-to-billing and continue training regularly to adapt to rule changes. Moreover, internal audits should be performed often to check if your practice follows all guidelines, followed by identifying and fixing issues early to improve results.

4. Use Your EHR System to Help

Technology can make incident-to-billing faster, easier, and error-free. As a result, set up templates in your EHR to ensure consistent documentation. Use reminders to alert staff when supervision is needed and label qualifying visits using tags or flags. These features help keep your workflow organized and compliant.

5. Track Your Reimbursement Trends

Keep an eye on how your mental health billing methods are affecting revenue. Compare your income from incident to billing with billing under PAs or NPs directly. If there's a difference, check for documentation errors or changing payer rules. This helps you fix problems early and maintain substantial revenue.

6. Outsource to 24/7 Medical Billing Services

Professional mental health billing support can reduce denials and improve reimbursements. 24/7 Medical Billing Services understands the latest Medicare guidelines. Their expert team ensures that your claims are accurate and complete. Therefore, outsourcing mental health incident-to-billing saves time, reduces errors, and keeps your practice profitable and compliant.

FAQs

Q1. Who can perform services under incident-to-billing?

Qualified non-physician providers including nurse practitioners and physician assistants are able to deliver services under incident-to-billing.

Q2. Can incident-to-billing be used for new patient visits?

No, incident-to-billing cannot be used for new patient visits or new problems not previously addressed by the physician.

Q3.Is direct supervision required for incident-to-billing?

Yes, direct supervision by the physician, meaning presence in the office suite, is required during the service.

Q4. Does incident-to-billing apply in hospital settings?

No, incident-to-billing only applies in physician office settings, not hospitals or other facility-based settings.

Q5. Are services provided by medical assistants billable under incident-to?

No, services by unlicensed medical assistants are not eligible for incident-to-billing.