Incident-to billing for nurse practitioners explained

Incident-to billing lets a nurse practitioner's service be billed to Medicare under a supervising physician's NPI and paid at 100% of the physician fee schedule, instead of the 85% an NP receives when billing under their own NPI. It only applies when strict conditions are met: the physician started the course of treatment, the service is a follow-up within that plan, it happens in an office or other non-institutional setting, and the physician provides direct supervision. The rules are in 42 CFR 410.26 and Chapter 15, Section 60 of the Medicare Benefit Policy Manual.

The 15% difference is real money, which is why incident-to is popular. It is also a long-standing audit target, because claims are easy to bill incorrectly. This guide explains when it applies, when it does not, and how to document it so the claim holds up.

The core requirements for incident-to

For an NP's service to qualify as incident-to under Medicare, all of the following must be true:

1. The physician initiated the course of treatment. The physician saw the patient, made the diagnosis and set the plan of care. The NP's visit carries out that plan.
2. The physician stays actively involved. Medicare expects the physician to remain involved in the course of treatment over time, with subsequent services reflecting that involvement.
3. The setting is non-institutional. Incident-to applies in a physician office (POS 11) and similar settings. It does not apply to services in a hospital inpatient or outpatient department or a skilled nursing facility stay billed under Part A.
4. Direct supervision is in place. A physician from the same group must be immediately available to assist during the service. For services in the office, that traditionally meant physically present in the office suite. It does not have to be the same physician who started the plan.
5. The NP is employed or contracted by the billing practice. The regulation requires the auxiliary personnel to be an employee, leased employee or independent contractor of the physician or the legal entity that bills.
6. The service is billed under the supervising physician's NPI. Since 2016, Medicare has required that the physician who actually supervised the service be the one who bills it.

Virtual direct supervision in 2026

In the CY 2026 Physician Fee Schedule final rule, CMS permanently adopted a definition of direct supervision that allows the supervising practitioner to be immediately available through real-time audio and video communication, excluding audio-only. Services with a global surgery indicator of 010 or 090 are excluded. This replaces the temporary flexibility that had been extended year to year since the public health emergency.

In practice, check two things before relying on it. First, confirm the specific service is not excluded and that your Medicare contractor has no additional guidance. Second, document how supervision was provided, including who was available and how. Commercial payers set their own rules and may still expect physical presence or may not recognize incident-to at all.

General supervision for behavioral health

Since 2023, Medicare has allowed behavioral health services furnished incident-to by auxiliary personnel to be provided under general supervision rather than direct supervision. Certain care management services also allow general supervision. For a psychiatric NP in a group practice, this changes how the schedule can be built, though the other incident-to conditions still apply.

When incident-to does not apply

Most incident-to problems come from billing it in situations where it was never allowed. The NP must bill under their own NPI (at 85%) in these cases:

• New patients. A new patient visit by an NP cannot be billed incident-to, because the physician has not started a plan of care.
• Established patients with a new problem. If the patient comes in for something the physician has not seen and planned for, the NP is starting a new course of treatment. That visit is billed under the NP.
• Changes to the plan of care. A significant change made by the NP, without the physician's involvement, moves outside the physician's plan.
• No qualifying supervisor. If no physician was immediately available as the rules require, the visit cannot go out incident-to.
• Facility settings. Hospital and facility visits follow split or shared visit rules instead, billed with modifier FS by the practitioner who performed the substantive portion.

Incident-to vs. billing under the NP's own NPI

Real scenarios from an NP practice

Hypertension follow-up

The physician diagnosed hypertension last month and started lisinopril, with a two-week recheck. The NP sees the patient for the recheck, reviews readings and continues the plan. The physician is in the office suite. This visit, for example 99213, can be billed incident-to under the physician.

Same patient, new complaint

At the recheck, the patient also mentions a new rash. If the NP evaluates and treats the rash, that part is a new problem. The safest approach is to bill the visit under the NP's NPI. Medicare does not allow you to split one E/M visit between two rendering providers, and billing the whole visit incident-to would include a service that does not qualify.

Physician working from a second location

The physician is at the group's other clinic across town and is not available by real-time video. The NP's visit is billed under the NP's own NPI, even though it is a routine follow-up.

Commercial payers and Medicaid

Incident-to is a Medicare concept. Many commercial payers do not recognize it and require NPs to be credentialed and bill under their own NPI. Others follow Medicare's rules, and some pay NPs at a reduced rate regardless of how the claim is filed. State Medicaid programs have their own policies. Before billing any non-Medicare claim incident-to, check the payer's current provider manual or contract, and make sure your NPs are fully credentialed so you are not depending on incident-to to get paid. Our credentialing services page covers enrollment for NPs.

Documentation that holds up in an audit

• A physician note establishing the diagnosis and plan of care for the problem being treated
• The NP's note showing the visit follows that plan
• The name of the supervising physician for that date of service, and how supervision was provided
• Evidence of the physician's ongoing involvement, such as periodic physician visits or documented plan reviews
• A schedule or log that shows the supervising physician was available when the service was furnished

A one-line attestation stamped on every NP note is not enough by itself. Auditors look at whether the conditions were met on that date. If the records cannot show the physician's initial service and their availability, the payer can recoup the full amount paid on the claim, which is far more than the 15% difference.

Is incident-to worth it for your practice

For practices with steady physician presence and a large volume of chronic disease follow-ups, incident-to can add meaningful revenue. For practices where NPs work independently, see many new patients or rotate between locations, the compliance overhead and risk often outweigh the gain. Many practices choose a middle path: bill incident-to only for clearly qualifying follow-ups and default to the NP's NPI whenever there is doubt. A periodic billing compliance review of a sample of incident-to claims is a sensible safeguard either way.

How SFA can help

We bill for NP and physician groups and set up charge review steps designed to flag incident-to claims that the documentation may not support. If you want a second look at how your NP visits are being billed, our nurse practitioner billing team can review a sample of claims and show you where the risk and the revenue are.

Frequently asked questions

Can a nurse practitioner bill a new patient visit incident-to?

No. Incident-to requires that the physician initiated the course of treatment, so new patient visits and new problems seen by the NP must be billed under the NP's own NPI at 85% of the Medicare fee schedule.

Does the supervising physician have to be the one who started the plan of care?

No. Any physician in the group who meets the supervision requirement can supervise, and the claim is billed under the NPI of the physician who actually supervised the service.

Do commercial insurance plans accept incident-to billing?

Some do and many do not. Incident-to is a Medicare rule, so check each payer's provider manual or contract, and keep NPs credentialed under their own NPI with every plan you bill.