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In a typical Atlanta primary care practice, a 67-year-old Medicare beneficiary walks in for her follow-up appointment to refill her blood pressure medications. She is seen by Christine, a nurse practitioner who has been managing the patient's hypertension for the past two years under the direction of Dr. Patel, the supervising physician. Dr. Patel is in her office down the hallway, reviewing labs. After the 15-minute visit, the front desk submits a claim to Medicare. The question that decides whether the practice receives 100 percent or 85 percent of the Medicare Physician Fee Schedule rate for the visit (a 15 percent reimbursement differential, multiplied across thousands of visits per year, with real consequences for the practice's bottom line) is whether the service qualifies as "incident-to."
Medicare's incident-to rules are among the most consequential and least-understood provisions of the Part B physician fee schedule. They rest on Section 1861(s)(2)(A) of the Social Security Act, which authorizes coverage of "services and supplies furnished as an incident to a physician's professional service, of kinds which are commonly furnished in physicians' offices and are commonly either rendered without charge or included in the physicians' bills." The implementing regulation at 42 CFR 410.26 sets out a three-tier physician supervision framework (direct, general, personal), an "established plan of care" requirement, a "same group practice" requirement, and an auxiliary personnel standard.
This guide is for Georgia medical practices, physicians, nurse practitioners, physician assistants, clinical nurse specialists, certified nurse midwives, practice administrators, billing managers, compliance officers, and the Medicare beneficiaries they serve. We walk through the statute, the regulation, the three supervision tiers, the established-patient and follow-up-only rules, the same-specialty group practice rule, the COVID-19 PHE flexibilities and their post-PHE status, the 100-percent vs 85-percent reimbursement differential, the hospital outpatient and SNF parallel rules, the FQHC and RHC alternative pathway, the Office of Inspector General focus and compliance risk, and how Georgia state scope of practice for APRNs and PAs interacts with the federal Medicare billing framework. We also cover what Georgia beneficiaries should know about the system and how it shapes their access to mid-level providers. :::
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Key takeaways for Georgia practices, providers, and beneficiaries
Incident-to is a Medicare billing category, not a clinical category. It governs WHICH NPI the claim is submitted under and HOW MUCH Medicare pays. The clinical service is the same.
The statutory basis is Section 1861(s)(2)(A) of the Social Security Act. The implementing regulation is 42 CFR 410.26. Both have existed for decades; the current framework dates to the 1990s with multiple updates.
The reimbursement differential is 15 percent. Incident-to under the physician's NPI pays 100 percent of the Physician Fee Schedule. Direct mid-level billing under the NP's or PA's own NPI pays 85 percent.
Direct supervision is required. The physician must be in the office suite and immediately available. Virtual direct supervision via real-time audio-video was permitted during the COVID-19 PHE and through CY 2025, with limited permanent extensions.
The patient must be established and the plan of care must be in place. A new patient or new presenting problem cannot be billed incident-to. The physician must initiate the treatment plan and remain involved in the care.
The billing physician and the supervising physician must be in the same group practice. They do not have to be the same person, but they must be in the same Medicare-enrolled practice.
The OIG flags incident-to as a high-compliance-risk area. A 2009 OIG report found significant non-compliance and ongoing audit risk. Practices that bill incident-to incorrectly face overpayment liability and False Claims Act exposure.
FQHCs and RHCs do not use incident-to. Federally Qualified Health Centers and Rural Health Clinics bill under Section 1861(aa) with all-inclusive encounter rates that treat NP and physician encounters the same.
Georgia state scope of practice is separate. Georgia law (Title 43) requires NPs to have a collaborative practice agreement and PAs to have a supervisory agreement. Compliance with state scope is necessary but not sufficient for federal incident-to billing.
Palmetto GBA Jurisdiction J handles Georgia compliance. Medical review activity at Palmetto can result in claim denials, takebacks, and prepayment review. Practices can appeal but the documentation must be solid. :::
What "incident-to" actually means
The term comes from the original statutory language. Section 1861(s)(2)(A), codified at 42 USC 1395x(s)(2)(A), authorizes Medicare Part B coverage of "services and supplies furnished as an incident to a physician's professional service." The statutory phrase is "as an incident to," and the regulatory and administrative term that has evolved is "incident-to."
The conceptual basis is straightforward. A physician's professional service often involves more than the physician's individual time. The physician orders a vaccine that a nurse injects. The physician orders an EKG that a technician performs. The physician orders a blood draw that a phlebotomist performs. The physician orders follow-up monitoring that a nurse practitioner performs under the physician's overall direction. All of these are "incident to" the physician's professional service. Section 1861(s)(2)(A) makes them covered Part B services that can be billed under the physician's professional services billing pathway.
The complexity arises because mid-level providers (NPs, PAs, CNSs, CNMs) can also bill Medicare directly under their own NPI at 85 percent of the physician fee schedule. The "incident-to" framework lets a practice instead bill the mid-level's service under the physician's NPI at 100 percent. The 15 percentage-point differential matters financially. It also matters for compliance: incident-to billing requires meeting a set of specific requirements that direct mid-level billing does not.
CMS issued the implementing regulation at 42 CFR 410.26. The regulation has been updated multiple times, most significantly in the 2002 final rule and in subsequent annual physician fee schedule rules. The current framework establishes:
- Direct supervision standard for office setting incident-to
- Auxiliary personnel requirement (the person rendering the service must be qualified)
- Integral and incidental requirement (the service must be an integral part of the physician's service)
- Established plan of care requirement (physician must initiate the treatment plan)
- Continuing involvement requirement (physician must remain involved with the patient's care)
- Same group practice requirement (billing physician must be in same group as supervising physician)
The three-tier supervision framework
42 CFR 410.32 and 410.26 distinguish among three levels of physician supervision:
Direct supervision
The physician must be present in the office suite and immediately available to provide assistance and direction throughout the time the service is being furnished. Direct supervision does NOT require physical presence in the room. The physician can be in another exam room, in his or her private office, or in a procedure room within the office suite. The key is that the physician is in the office suite and can immediately respond if needed.
What counts as the "office suite" has been a subject of guidance and interpretation. The general principle is that the office suite is the physical space in which the practice operates. If the practice occupies multiple floors of a building, the "office suite" likely encompasses all of the practice's space. If the practice is in a multi-tenant medical office building, the office suite is the practice's leased space. A physician who is in a different building, a different floor of a different practice, or away from the practice entirely is NOT providing direct supervision.
Direct supervision is the required standard for office-based incident-to billing.
General supervision
The physician provides overall direction and control of the service but is not required to be present at the time of the service. The physician may be in a different location, available by telephone. General supervision applies to certain diagnostic tests and to some preventive services. General supervision does NOT support incident-to billing in most contexts.
Personal supervision
The physician must be physically present in the same room with the auxiliary personnel during the procedure. Personal supervision is the highest standard and applies to a narrow category of services.
COVID-19 PHE flexibility and the post-PHE landscape
During the COVID-19 Public Health Emergency, CMS issued interim final rules (CMS-1734-IFC, CMS-1744-IFC, and others) that modified the direct supervision standard. The most significant change: CMS allowed direct supervision to be furnished via real-time interactive audio-video telecommunications technology. The physician did not need to be in the office suite physically; the physician could be at home, in another office, or anywhere, as long as the physician was reachable through video at the moment supervision was required.
The virtual direct supervision flexibility was originally tied to the PHE. The PHE has ended. CMS extended the virtual direct supervision flexibility through the CY 2024 and CY 2025 physician fee schedule final rules, which confirmed virtual direct supervision through the end of 2025 for the general incident-to context, with permanent extensions for specific services.
As of May 2026 (when this guide is being published), the post-2025 landscape is as follows:
- Virtual direct supervision for behavioral health services: permanent (Section 1834(m)(7) post-Consolidated Appropriations Act 2023)
- Virtual direct supervision for DSMT, MNT, and certain chronic care management: permanent in specific contexts
- General virtual direct supervision for office-based incident-to: status depends on whether CMS extended through CY 2026 in the CY 2026 PFS final rule
Practices should verify current CMS guidance through Palmetto GBA bulletins and the CMS Medicare Benefit Policy Manual (Pub 100-02 Chapter 15 Section 60). The current expectation in May 2026 is that physical office-suite presence is required for general incident-to billing absent a specific virtual flexibility for the service being rendered.
The auxiliary personnel requirement
42 CFR 410.26(a)(1) defines auxiliary personnel as "any individual who is acting under the supervision of a physician, regardless of whether the individual is an employee, leased employee, or independent contractor of the physician, or of the legal entity that employs or contracts with the physician."
The auxiliary personnel must be:
- Qualified to perform the service (state-licensed if licensure is required)
- Performing within the scope of practice authorized under state law
- Subject to applicable practitioner-specific Medicare requirements
This means a Georgia NP performing incident-to services must:
- Hold a current Georgia RN license and APRN authorization
- Have a current collaborative practice agreement on file with the Georgia Board of Nursing
- Be performing within the scope authorized under the collaborative agreement
- Have an active NPI
A Georgia PA must:
- Hold a current Georgia PA license
- Have a current supervisory agreement on file with the Georgia Composite Medical Board
- Be performing within the scope authorized under the supervisory agreement
- Have an active NPI
If the auxiliary personnel does not meet any of these requirements, the service cannot be billed incident-to or any other way. Compliance with state scope is necessary but not sufficient for federal incident-to billing.
The integral and incidental standard
The service must be "an integral, although incidental, part of the professional service performed by the physician." This phrase, taken from the regulatory text, captures the policy intent: the mid-level's work is supporting the physician's overall care plan, not replacing the physician's role.
In practice, this means the mid-level's service should be:
- A logical extension of the physician's care plan
- A service that the physician could reasonably have performed personally
- Not a service that fundamentally requires independent medical decision-making about a new presenting problem
A blood pressure check, a medication titration within an established plan, a routine follow-up visit, a wound dressing change, an injection of a previously-prescribed medication, a vaccine administration ordered by the physician (these all clearly fit). A new diagnostic evaluation of a previously-undocumented complaint generally does not fit.
The established plan of care requirement
This is the most-litigated and most-misunderstood incident-to requirement. The regulation at 42 CFR 410.26(b)(2)(iii) states that the physician must "initiate the course of treatment of which the service being performed by the nonphysician practitioner is an incidental part."
The CMS Medicare Benefit Policy Manual (Pub 100-02 Chapter 15 Section 60.1) elaborates: "The physician must initiate the course of treatment, the service being performed by the nonphysician practitioner reflects the physician's active participation in and management of the course of treatment, and the physician must remain actively involved in the course of treatment."
The interpretive consensus is:
New patient encounter: The physician must see the patient for the initial visit. Mid-level cannot bill incident-to for the new patient visit. Bill under mid-level NPI at 85%.
New presenting problem: When an established patient comes in with a new presenting problem (one the physician has not previously addressed), the physician must see the patient and establish the plan of care for that problem. The mid-level cannot bill incident-to for the new-problem visit.
Established problem follow-up: Once the physician has established the plan of care, the mid-level can bill incident-to for follow-up visits within that plan, as long as:
- Direct supervision is maintained
- The visit remains within the established plan
- The physician continues to be actively involved
Major plan changes: If the plan of care needs significant revision (changing the diagnostic approach, escalating to a new specialty consultation, materially adjusting the long-term care plan), the physician should see the patient and document the revision.
The "active involvement" standard is judgment-driven. Different audit organizations and Medicare Administrative Contractors have applied somewhat different interpretations. The safest practice is to document physician involvement in the care plan in writing in the medical record at intervals consistent with the patient's clinical complexity.
The same-specialty group practice rule
42 CFR 410.26(b)(5) requires that the supervising physician and the billing physician be in the same group practice. The "billing physician" is whose NPI appears on the claim. The "supervising physician" is whoever was in the office suite providing direct supervision at the time the service was rendered.
The billing physician does not have to be the patient's treating physician. The billing physician does not have to be the physician who established the plan of care. The billing physician does not have to be the physician who is supervising at that moment. The billing physician simply has to be a member of the same group practice as the supervising physician.
Many large group practices in Georgia rotate the "supervising physician of the day" responsibility. On any given day, whichever physician is in the office suite providing direct supervision is the supervising physician. The patient's primary care physician may be elsewhere (in another office, on vacation, attending CME) but the practice can still bill incident-to as long as some physician in the group is providing direct supervision and as long as that physician's NPI is on the claim (or the patient's primary's NPI is on the claim and the actual supervising physician is in the group).
The 100 percent vs 85 percent differential
A nurse practitioner or physician assistant visit billed incident-to under the supervising physician's NPI reimburses at 100 percent of the Medicare Physician Fee Schedule rate. The same visit billed under the NP's or PA's own NPI reimburses at 85 percent. The 15 percentage-point differential is established in the Social Security Act and its implementing regulations.
The differential applies to all evaluation and management codes across the range of visit complexity levels. In practice, only a portion of mid-level visits qualify as incident-to (new patient visits, new presenting problems, days when no physician is in the office suite, and other exceptions reduce the qualifying percentage), so the aggregate annual impact depends on each practice's patient mix and compliance discipline.
Hospital outpatient incident-to (42 CFR 410.27)
The rules for hospital outpatient incident-to services are different from the office-based rules. 42 CFR 410.27 governs incident-to services in hospital outpatient departments. Key differences:
- Hospital outpatient services are billed under the Hospital Outpatient Prospective Payment System (OPPS) using the hospital's NPI
- The hospital component (facility fee) is billed separately from the professional component (Pro Fee)
- The professional component for a mid-level service in HOPD generally bills under the mid-level NPI at 85 percent
- The hospital itself receives OPPS payment that includes the technical component
In a hospital outpatient clinic affiliated with a Georgia health system (Emory Hospital Outpatient Clinics, Wellstar Hospital Outpatient, Piedmont Outpatient), the billing structure differs from the freestanding physician office. Practice administrators in these settings need separate guidance specific to the HOPD rules.
SNF incident-to (42 CFR 411.15)
In a skilled nursing facility setting, the rules differ again:
- Routine SNF services for Medicare Part A SNF stays are bundled into the SNF Prospective Payment System (PPS) rate
- Physician visit services in SNF are billed separately from the SNF stay
- Mid-level visits in SNF can be billed under the mid-level NPI at 85 percent
- Incident-to billing in SNF is generally NOT available because the SNF setting does not meet the office-suite direct supervision standard
FQHC and RHC alternative pathway
Federally Qualified Health Centers and Rural Health Clinics in Georgia (including all the FQHCs serving rural and underserved Georgia communities) bill under Section 1861(aa) of the Social Security Act. The FQHC and RHC payment structure is fundamentally different from the physician office structure:
- FQHCs bill an all-inclusive Medicare prospective payment rate per encounter
- The encounter rate is the same whether the encounter is performed by a physician, NP, PA, CNM, or other practitioner
- The incident-to rules do not apply
- The 85 percent reduction for mid-level billing does not apply
This is one of the major financial advantages of FQHC and RHC status for safety-net providers in Georgia. An FQHC like Mercy Care in Atlanta, Albany Area Primary Health Care, or Curtis V. Cooper Primary Health Care in Savannah can deploy NPs and PAs extensively without facing the 15-percent reimbursement reduction.
The Office of Inspector General focus on incident-to compliance
The OIG has identified incident-to billing as a high-compliance-risk area in multiple work plans and reports.
2009 OIG Report on Incident-to Billing
The OIG examined a sample of physician-billed services and found that:
- A significant share of services billed by physicians were actually performed by non-physicians
- A significant fraction of those services did not meet incident-to compliance requirements
- Estimated improper payment exposure was in the billions
Subsequent OIG work
The OIG Work Plan has revisited incident-to billing periodically. Audits have focused on:
- Direct supervision documentation
- New patient vs established patient billing
- New presenting problem evaluations
- Documentation of physician active involvement
False Claims Act exposure
Practices that knowingly bill incident-to without meeting requirements face False Claims Act exposure. FCA penalties include treble damages plus per-claim penalties under 31 USC 3729. Settlements over the past decade have ranged from hundreds of thousands of dollars (small practices) to tens of millions of dollars (large hospital-affiliated practices).
Compliance best practices
Practices billing incident-to should implement:
- Daily supervision logs documenting which physician is in the office suite each day
- Clear policy on new patient vs established patient billing
- Clear policy on new presenting problem evaluations
- Internal audit of a sample of incident-to claims at least annually
- Compliance training for billing staff and providers
Georgia state scope of practice: necessary but not sufficient
Georgia state law governs what NPs and PAs can do clinically. The federal Medicare incident-to framework governs how those services are billed. Both must be satisfied for proper billing.
Georgia NP scope (Georgia Code Title 43 Chapter 26 Article 5)
- NPs must have a collaborative practice agreement with a Georgia-licensed physician
- The agreement specifies the NP's scope and the physician's involvement
- NPs can prescribe Schedule II controlled substances under Georgia Code 43-34-25
- NPs can order diagnostic imaging including CT and MRI
- Georgia is a "collaborative practice" state, not a full independent practice state
Georgia PA scope (Georgia Code Title 43 Chapter 34A)
- PAs must have a supervisory agreement (Job Description) on file with the Georgia Composite Medical Board
- The PA's scope is bounded by the supervising physician's scope
- The Job Description specifies the procedures and tasks the PA can perform
- Supervisor must be available for consultation
- Supervisor must review charts as specified in the agreement
Integration with federal billing
A Georgia NP whose state collaborative agreement allows blood pressure management can perform a blood pressure follow-up visit. Whether the service is billed incident-to at 100 percent or under the NP's NPI at 85 percent depends on:
- Whether the patient is established
- Whether the plan of care is established
- Whether direct supervision is being provided at the time
- Whether the billing physician is in the same group as the supervising physician
A service can be within Georgia scope but not incident-to-eligible. A service can be billed under the NP's NPI at 85 percent and remain compliant with both Georgia scope and Medicare billing rules.
Six worked examples for Georgia practices
Example 1: Wellstar Cobb internal medicine practice reimbursement analysis
A Wellstar internal medicine practice in Marietta employs 6 physicians and 4 nurse practitioners. The NPs see roughly 20 patients per day each, 220 working days per year, for a total of 17,600 NP-rendered visits annually. The practice has worked through its incident-to compliance carefully:
- Approximately 60 percent of NP visits qualify as incident-to (established patients, established plans, direct supervision present)
- Approximately 40 percent do not qualify (new patients, new presenting problems, days when physician supervision is not present, etc.)
For the 60 percent that qualify: 10,560 visits at the incident-to differential of ~$13 per visit = approximately $137,280 in additional annual reimbursement.
For the 40 percent that do not qualify: billed under NP NPI at 85 percent. No incident-to billing attempted because the requirements are not met.
The practice's compliance officer conducts internal audits quarterly. The practice documents direct supervision through electronic schedules and EHR-based "physician present" attestations. The practice has not been subject to an external incident-to audit but has received Palmetto GBA bulletins about compliance expectations.
Example 2: Piedmont Buckhead cardiology PA follow-up
Dr. Sharma is a cardiologist at Piedmont Heart Institute Buckhead office. She manages a panel of approximately 1,200 chronic heart failure patients. Her PA, Mr. Johnson, conducts most of the follow-up medication titration visits between Dr. Sharma's quarterly comprehensive visits.
Dr. Sharma sees each patient at the initial cardiology consultation and at major medication changes. Mr. Johnson sees patients in the intervening months for routine titration of ACE inhibitors, beta blockers, and diuretics within the established plan. Dr. Sharma's office schedule shows her in-office presence during Mr. Johnson's clinic days. Mr. Johnson's visits are billed under Dr. Sharma's NPI as CPT 99213-25 or 99214-25 at 100 percent of PFS.
The compliance documentation includes:
- Initial Dr. Sharma consultation note establishing the plan
- Daily schedule showing Dr. Sharma in office
- Mr. Johnson's documentation noting "patient continues medication regimen established by Dr. Sharma, BP X/X, no new complaints, continuing established plan"
- Quarterly Dr. Sharma re-evaluation visits documented
This is well-documented incident-to billing. The practice has been audited once with no findings.
Example 3: Solo internist Macon NP new patient
Dr. Williams is a solo internist in Macon. His NP, Ms. Garcia, sees patients for medication management of established conditions. One day a new walk-in patient (referred by a neighbor) presents with a respiratory complaint. The patient has never been seen by Dr. Williams or the practice.
Dr. Williams is in the office. Ms. Garcia begins the patient intake. Per practice policy, Ms. Garcia stops the encounter, has Dr. Williams briefly see the patient to establish the initial care plan, and Dr. Williams documents the new-patient evaluation. Dr. Williams then bills the new-patient visit under his own NPI. Ms. Garcia's documentation supports Dr. Williams's note.
For a subsequent follow-up visit two weeks later, Ms. Garcia sees the same patient alone (Dr. Williams in office, providing direct supervision). The follow-up visit is within Dr. Williams's established plan. It is billed incident-to under Dr. Williams's NPI at 100 percent of PFS.
Later, the same patient presents with a new complaint (chest pain). Ms. Garcia stops the new-problem evaluation, has Dr. Williams see the patient to establish the new plan, and the chest pain evaluation is billed under Dr. Williams's NPI as Dr. Williams's evaluation.
This is correct incident-to discipline: new patient and new problem evaluations done by the physician; follow-up within the established plan done by the NP and billed incident-to.
Example 4: Emory teaching practice resident and NP supervision
Emory Internal Medicine at Emory Hospital operates a residency teaching practice. Resident physicians (interns, PGY-2, PGY-3) see patients with attending physician supervision. NPs in the same practice also see patients with attending physician oversight.
The billing structure is governed by the teaching physician rules at 42 CFR 415.172, which are distinct from the incident-to rules. The attending physician must personally see the patient during the encounter (or document the key portions of the encounter) for the service to be billed under the attending's NPI in a teaching setting.
When the resident sees the patient and the attending personally evaluates the patient, the service is billed under the attending's NPI under the teaching physician rules (not incident-to). When the NP sees the patient with direct supervision from the attending (no resident involvement), the service follows the incident-to rules: billed incident-to under the attending's NPI at 100 percent if requirements are met, or under the NP's NPI at 85 percent if not.
This is a hybrid setting. The practice's billing team has specific protocols for each scenario.
Example 5: Direct primary care Atlanta NP
Atlanta Family Health is a direct primary care practice in Buckhead that charges patients a monthly membership fee ($200/month) and does not bill insurance or Medicare. The practice employs two NPs who see patients alongside the practice's physician.
Because the practice does not bill Medicare, the incident-to rules are irrelevant to its billing. The practice collects directly from patients. Patients still need a Part D plan for prescription coverage (and the prescriber enrollment requirement applies to prescriptions; the practice's physician and NPs are all Medicare-enrolled for prescribing purposes).
For Medicare beneficiaries who join Atlanta Family Health, the membership fee is not Medicare-covered, but their prescriptions are covered under Part D. This is the same financial dynamic as concierge medicine.
Example 6: Rural Georgia Tifton FQHC NP
Tift County Family Health Center is a Federally Qualified Health Center serving Tift County and surrounding rural Georgia. The center employs three physicians and seven NPs. All providers see Medicare beneficiaries, Medicaid beneficiaries, and uninsured patients.
Because the center is an FQHC, billing is under Section 1861(aa) at the FQHC Prospective Payment System encounter rate, which is set annually by CMS and subject to wage index adjustment. An NP encounter and a physician encounter both bill at the same rate.
The incident-to rules and the 85 percent mid-level reduction do not apply to FQHC services. This is one of the major financial advantages of FQHC status: the center can deploy NPs as the primary provider of care without facing the 15 percent reimbursement reduction that would apply in a physician office.
The center also benefits from PPS+ supplemental Medicaid payments under Georgia's State Plan and from 340B drug pricing under Section 340B of the Public Health Service Act.
Common Georgia errors and how to avoid them
Error 1: Billing new patient visits incident-to. A new patient must be seen by the physician for initial encounter. The mid-level cannot bill incident-to for a new patient visit.
Error 2: Billing new presenting problems incident-to. When an established patient comes in with a new complaint, the physician must establish the plan of care for that new complaint before the mid-level can bill incident-to.
Error 3: Billing on days when no physician is in the office suite. If the physician is out of the office, direct supervision is not being provided. Bill under the mid-level NPI at 85 percent.
Error 4: Failing to document direct supervision. Even if direct supervision was provided, the audit defense requires documentation. Maintain daily schedules and physician-present logs.
Error 5: Billing under a physician's NPI when the physician is not in the group practice. The supervising physician and billing physician must be in the same group practice.
Error 6: Confusing federal billing rules with state scope of practice. Georgia scope governs what the NP/PA can do. Federal rules govern how it's billed.
Error 7: Assuming the PHE virtual direct supervision is permanent. The virtual flexibility is partly permanent (behavioral health) and partly time-limited. Verify current rules.
Error 8: Treating FQHCs the same as physician offices. FQHCs use a different payment structure that does not involve incident-to.
Error 9: Inadequate compliance audits. Internal audits should be quarterly or at minimum annually.
Error 10: Not training new providers and billing staff. When a new physician or NP joins the practice, incident-to compliance training is essential.
Error 11: Billing incident-to for services that require personal supervision. Some services require physician physical presence in the room. Direct supervision is not enough.
Error 12: Misclassifying hospital outpatient services as office incident-to. HOPD has its own rules.
Error 13: Not updating PECOS when supervising physicians change. The supervising physician must be in PECOS as a member of the group.
Error 14: Billing incident-to without an established plan of care in the medical record. The plan must be documented before the mid-level can render incident-to services.
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Frequently Asked Questions
What is "incident-to" billing?
Incident-to is a Medicare billing category that allows certain services furnished by non-physician practitioners (NPs, PAs, CNSs, CNMs) in a physician office setting to be billed under the supervising physician's NPI at 100 percent of the Medicare Physician Fee Schedule rate, rather than under the mid-level's NPI at 85 percent. The statutory basis is Section 1861(s)(2)(A) of the Social Security Act, and the implementing regulation is 42 CFR 410.26.
What is the financial difference between incident-to and direct billing?
Incident-to bills at 100 percent of PFS. Direct mid-level billing under the mid-level's own NPI bills at 85 percent. The differential scales with visit complexity, so higher-acuity visits produce a larger absolute dollar gap.
Can a new patient visit be billed incident-to?
No. New patient visits cannot be billed incident-to. The physician must see the patient for the initial encounter. Established-patient follow-up visits can be billed incident-to if requirements are met.
Can a new presenting problem be billed incident-to?
No. When an established patient presents with a new problem (one the physician has not previously addressed), the physician must establish the plan of care for that new problem before mid-level visits within that plan can be billed incident-to.
What is direct supervision?
Direct supervision requires the physician to be physically present in the office suite and immediately available to provide assistance and direction at the time the service is rendered. The physician does NOT need to be in the same room. The physician CAN be in another exam room, in his or her office, or elsewhere within the office suite.
Did the COVID-19 PHE change the direct supervision rule?
Yes, temporarily. During the PHE, CMS allowed virtual direct supervision via real-time audio-video. This flexibility was extended through CY 2025. Some specific services (behavioral health, certain chronic care management) have permanent virtual flexibility. General office incident-to billing has reverted toward the physical office-suite presence standard.
Who is the "supervising physician"?
The physician who is in the office suite providing direct supervision at the time the service is rendered. The supervising physician does not have to be the patient's primary care physician.
Who is the "billing physician"?
The physician whose NPI appears on the claim. The billing physician must be in the same group practice as the supervising physician but does not have to be the supervising physician personally.
Do the rules apply to nurse practitioners and physician assistants the same way?
Yes. The incident-to rules apply to all eligible auxiliary personnel, including NPs, PAs, CNSs, CNMs, and other qualified individuals.
What is the 85 percent rule?
Medicare rules provide that when an NP, PA, CNS, or CNM bills Medicare directly under their own NPI, the reimbursement is 85 percent of the physician fee schedule rate.
Are incident-to rules the same in hospital outpatient and SNF settings?
No. Hospital outpatient services have their own rules at 42 CFR 410.27. SNF services are subject to the SNF PPS bundling for Part A stays. Office-based incident-to under 42 CFR 410.26 is its own framework.
Do FQHCs use incident-to?
No. FQHCs and RHCs bill under Section 1861(aa) at all-inclusive encounter rates that do not distinguish between physician and mid-level encounters. The incident-to framework does not apply.
What about teaching physicians and residents?
Teaching physician rules at 42 CFR 415.172 are separate from incident-to rules. Resident services billed under the attending physician's NPI follow teaching physician rules, which require the attending to personally see the patient or document the key portions of the encounter.
Is there an OIG audit risk?
Yes. The OIG has flagged incident-to as a high-compliance-risk area. Practices billing incident-to should expect potential audits and should maintain robust compliance documentation.
What documentation does a practice need to support incident-to billing?
Daily physician schedule showing in-office presence, EHR documentation of the established plan of care, evidence of physician active involvement (periodic visits, plan revisions, signature on care plan), the mid-level's encounter note documenting the service within the established plan, and the billing physician's NPI in the same group as the supervising physician.
Does Georgia state law affect incident-to billing?
Georgia state law (Title 43 Chapter 26 Article 5 for NPs, Chapter 34A for PAs) governs what mid-levels can do clinically. Compliance with state scope is necessary for any billing. The federal Medicare incident-to rules govern how the services are billed. Both must be satisfied.
Can a chiropractor bill incident-to?
Chiropractors are limited under Section 1861(r)(5) of the Social Security Act to billing for manual manipulation of the spine. Chiropractor practices generally do not use the incident-to framework the same way physician practices do.
Can a dentist bill incident-to?
Dental services are largely excluded from Medicare coverage. Some limited dental services (oral surgery for certain conditions) may be Medicare-covered. The incident-to framework is rarely relevant in dental settings.
What is a "collaborative practice agreement" in Georgia?
A collaborative practice agreement is the written agreement between a Georgia NP and a Georgia-licensed physician that defines the NP's scope of practice. Georgia Code 43-34-25 and Georgia Board of Nursing rules govern the content. The agreement must be on file and current for the NP to practice in Georgia.
What is a "supervisory agreement" in Georgia?
A supervisory agreement is the written agreement between a Georgia PA and a Georgia-licensed physician that defines the PA's scope of practice. Georgia Code 43-34A and Georgia Composite Medical Board rules govern the content.
What if a Medicare beneficiary disagrees with how their visit was billed?
Patients typically do not see the billing-physician distinction directly because the bill shows the practice. If a Medicare beneficiary believes their visit was misbilled, they can contact their Part B Medicare Administrative Contractor (Palmetto GBA for Georgia at 1-855-696-0705) or Medicare at 1-800-MEDICARE.
Can a practice bill incident-to for telehealth visits?
Telehealth services have specific billing rules under Section 1834(m). Some telehealth incident-to is permitted in defined scenarios. The general principle is that telehealth services typically use specific HCPCS codes and modifiers and may not follow the standard incident-to framework.
What happens if a practice is audited and incident-to billing is found non-compliant?
Palmetto GBA or another auditor can require the practice to refund the difference (15 percent of incorrectly billed claims). Repeated or knowing violations can lead to False Claims Act liability with treble damages and per-claim penalties under 31 USC 3729. Severe cases can lead to OIG exclusion.
Where can I get help with incident-to billing in Georgia?
For provider-side billing questions, contact Palmetto GBA Provider Outreach at 1-866-238-9650 or palmettogba.com. For beneficiary questions, contact GeorgiaCares SHIP at 1-866-552-4464 or Medicare at 1-800-MEDICARE. For legal compliance questions, work with healthcare counsel familiar with Medicare billing. :::
Detailed look at the Diabetes Self-Management Training incident-to pathway
Diabetes Self-Management Training (DSMT) is one of the specifically enumerated services that can be furnished as incident-to a physician's service. Section 1861(s)(2)(S) of the Social Security Act and the implementing regulation at 42 CFR 410.140 et seq. establish DSMT as a covered Part B benefit when:
- Furnished by an accredited DSMT provider (ADA, AADE, or Indian Health Service accredited program)
- Ordered by the treating physician or qualified non-physician practitioner
- Following the established DSMT plan of care
DSMT can be billed incident-to in two ways:
Option 1: Direct DSMT program billing The accredited DSMT program bills under its own provider number. Reimbursement at DSMT-specific HCPCS billing codes. This is the most common pathway for hospital-based and large clinic DSMT programs.
Option 2: Office-based incident-to A diabetes educator or qualified mid-level in a physician's office provides DSMT services as incident-to. The 42 CFR 410.26 framework applies: direct supervision, established plan, integral and incidental. The service bills under the physician's NPI at 100 percent of the applicable rate.
In Georgia, several health systems operate accredited DSMT programs (Emory Diabetes Center, Wellstar Comprehensive Diabetes Center, Augusta University Health Diabetes Center). Many independent endocrinology and primary care practices also offer DSMT incident-to using qualified diabetes educators on staff.
The CMS Medicare Benefit Policy Manual Chapter 15 Section 60.1.B and Section 70 elaborate on DSMT incident-to requirements.
Detailed look at the Medical Nutrition Therapy incident-to pathway
Medical Nutrition Therapy (MNT) is a related service covered under Section 1861(s)(2)(V) of the Social Security Act for patients with diabetes or renal disease. MNT must be furnished by a registered dietitian or nutrition professional meeting specific qualifications under 42 CFR 410.130 et seq.
Like DSMT, MNT can be furnished as incident-to a physician's service in some configurations. The dietitian must:
- Meet the qualifications under 42 CFR 410.131 (RD with state license)
- Be furnishing the service in a Medicare-enrolled physician's office under direct supervision
- Be operating under the physician's established care plan
MNT is billed using HCPCS codes for initial assessment, re-assessment and intervention, and group sessions. When billed incident-to, the claim goes under the physician's NPI at 100 percent.
For Georgia practices, the dietitian must also have appropriate state credentialing. Georgia recognizes the Registered Dietitian Nutritionist (RDN) credential from the Commission on Dietetic Registration.
The mental health incident-to limits
Mental health services have specific rules that differ from general medical services. Section 1861(s)(2)(K) and Section 1861(ff) establish coverage for clinical psychologist services, clinical social worker services, and (post-CAA-2023) marriage and family therapist and mental health counselor services. Each of these professional categories has independent Medicare billing rights at varying percentages of PFS.
The general incident-to framework applies in limited ways to mental health:
Outpatient mental health treatment plans: A clinical psychologist's services can be furnished as incident-to a physician's service if direct supervision is provided and the established plan exists. In practice, clinical psychologists typically bill under their own NPI.
Counseling services: Behavioral health counseling can be incident-to in some contexts. The Substance Use Disorder treatment services have their own framework under 42 CFR 410.26(c).
Group psychotherapy: Group therapy by qualified mental health professionals has specific billing rules.
The 2024 and 2025 PFS rules expanded telehealth and virtual supervision for behavioral health, which has changed the incident-to landscape for this category.
For Georgia behavioral health practices, the interaction between Georgia Board of Professional Counselors, Social Workers, and Marriage and Family Therapists licensure and Medicare billing rules is complex. Practices should consult specifically with behavioral health billing resources.
Telehealth and incident-to services
Section 1834(m) of the Social Security Act governs Medicare telehealth services. The 2020-2023 COVID-19 PHE produced sweeping telehealth flexibilities that interacted with incident-to billing. The post-PHE landscape (as of May 2026) is partially clarified:
Permanent telehealth provisions (post-CAA-2023 and IRA)
- Behavioral health services via telehealth are permanently covered
- Geographic and originating-site restrictions for behavioral health are removed
- Audio-only behavioral health is permitted for established patients in some circumstances
Telehealth and incident-to interaction
- A physician supervising a mid-level's in-office service via real-time video MAY satisfy direct supervision (depending on whether the virtual flexibility has been extended for the specific service)
- A mid-level providing telehealth services from a non-office location is NOT operating within the incident-to framework (the patient is not in the physician's office)
- Telehealth services typically bill at telehealth-specific rates and modifiers (95, GT, GQ)
Practice implications
Georgia practices offering telehealth should distinguish carefully between:
- In-office mid-level visits with physician supervision (potentially incident-to)
- Telehealth mid-level visits from the office to remote patient (billed under telehealth rules, often under mid-level NPI)
- Hybrid scenarios (mid-level in office, patient on video at home)
Each scenario has different billing rules.
The two-midnight rule's implication for incident-to billing
The Two-Midnight Rule affects inpatient vs outpatient status determinations. It indirectly affects incident-to billing because incident-to is fundamentally an outpatient (office-based) framework.
When a patient is in observation status (outpatient) versus inpatient status, different billing structures apply. Mid-level services for observation patients in a hospital setting are typically billed by the hospital under OPPS, not under the office-based incident-to framework.
For Georgia practices that operate within hospital systems and see patients across multiple care venues, the billing structure for each venue must be properly mapped.
Audit defense: what to do when Palmetto GBA requests records
Palmetto GBA Jurisdiction J conducts medical review activities that periodically focus on incident-to compliance. When the practice receives an Additional Documentation Request (ADR) from Palmetto, the response should include:
Documentation to submit
- The physician's initial encounter note establishing the plan of care
- The mid-level's encounter note for the service in question (clearly noting "continuing plan established by Dr. [Name]")
- Daily physician schedule showing the supervising physician's in-office presence on the date of service
- Sign-in/sign-out logs or EHR timestamps confirming the physician was in the office suite during the service
- The physician's subsequent encounter notes showing continuing involvement with the patient's care
- The collaborative practice agreement or supervisory agreement on file
- The mid-level's Medicare enrollment confirmation
- Any practice compliance policies governing incident-to billing
Response deadline
ADRs typically have a 45-day response deadline. Failure to respond results in claim denial.
Internal compliance audits
The best audit defense is regular internal review. A compliance officer or external consultant should sample 20-30 incident-to claims per quarter and verify:
- Established patient status
- Established plan of care
- Physician presence in office on date of service
- Same-group-practice relationship between billing and supervising physicians
- Mid-level scope of practice compliance
Issues identified internally can be self-disclosed and refunded before they become Palmetto audit findings, which significantly reduces enforcement risk.
Reporting and self-disclosure
Practices that discover incident-to billing errors after the fact have a regulatory obligation to refund overpayments under Section 6402(a) of the Affordable Care Act and 42 CFR 401.305. The 60-day repayment rule requires identification and return of overpayments within 60 days of identification.
The OIG Self-Disclosure Protocol allows practices to proactively disclose compliance issues and negotiate resolution with reduced penalty exposure compared to enforcement action. Healthcare counsel should be engaged for any material self-disclosure.
How the framework affects Georgia beneficiary access
While incident-to is primarily a billing framework, it has indirect effects on beneficiary access to care.
Mid-level provider deployment
The 15 percent reimbursement reduction for direct mid-level billing creates a financial incentive for practices to deploy mid-levels in ways that qualify for incident-to billing. Practices that can structure their workflows around incident-to compliance can deploy more mid-level capacity per physician. Practices that cannot (rural solo practices, practices with high new-patient volume) may deploy fewer mid-levels.
Visit type triage
A practice that bills incident-to needs to triage between new-patient and follow-up visits in ways that preserve incident-to eligibility. This can create scheduling friction for new patients in some practices.
Direct supervision and office hours
Direct supervision requires a physician in the office suite. Practices that operate extended hours, weekend hours, or with physician schedules that have gaps may not be able to bill incident-to for all mid-level services during those times. Practices may schedule mid-level visits to align with physician presence.
Rural and underserved Georgia
In rural Georgia, where mid-level providers carry a disproportionate share of primary care delivery, the FQHC and RHC pathway becomes particularly valuable. The all-inclusive encounter rate eliminates the 15 percent mid-level reduction and removes the operational complexity of incident-to compliance.
The history of incident-to: how the framework evolved
The Medicare incident-to framework was not invented in a single moment. It evolved over decades through statute, regulation, manual guidance, and case law.
Original 1965 Medicare law
The original Social Security Amendments of 1965, Public Law 89-97, established Medicare. Section 1861(s) defined covered services. The incident-to provision at 1861(s)(2)(A) was included in the original text but was sparsely interpreted in the early years because mid-level practitioners (NPs, PAs) were not yet a significant part of American medicine.
Growth of mid-level professions (1970s-1990s)
The nurse practitioner profession emerged in the 1960s-70s. Physician assistants emerged in the 1960s. By the 1990s, these professions had grown substantially. State scope-of-practice laws expanded. Medicare needed to articulate clearer rules for how mid-level services were billed.
Balanced Budget Act of 1997 (Public Law 105-33)
Section 4511 of the BBA expanded Medicare coverage of NP and PA services. NPs and PAs gained the ability to bill Medicare directly at 85 percent of PFS. The incident-to framework was retained as an alternative for office settings where the requirements were met.
2002 Final Rule
CMS issued a comprehensive final rule on incident-to and direct supervision. The rule clarified the direct supervision standard, the auxiliary personnel requirement, the established plan of care requirement, and other key elements. The 42 CFR 410.26 framework as we know it today largely dates to this rule with subsequent updates.
2009 OIG report and increased scrutiny
A 2009 OIG report brought significant compliance scrutiny to incident-to billing. CMS and Medicare Administrative Contractors increased audit activity.
Affordable Care Act of 2010 (Public Law 111-148)
The ACA did not significantly modify incident-to but did expand mid-level practitioner roles through other provisions. Section 5501 supported primary care workforce development.
COVID-19 PHE (2020-2023)
The PHE produced sweeping flexibilities including virtual direct supervision. Many of these were partly retained post-PHE.
Consolidated Appropriations Act 2023 (Public Law 117-328)
The CAA-2023 made several telehealth and behavioral health flexibilities permanent, with implications for incident-to billing in those service categories.
Continuing evolution
CMS revisits incident-to and supervision rules in each annual PFS rulemaking. The 2026 PFS final rule (CMS-1810-F or similar) will provide the current state of the framework for the calendar year.
Mid-level provider deployment models in Georgia
Different Georgia practice settings use mid-level providers in different ways, with different implications for incident-to billing.
Solo physician practice with one NP or PA
The simplest model. The physician is in the office most of the time. The mid-level handles routine follow-up visits within the physician's established plan. Direct supervision is straightforward to document because there is only one physician to track. Incident-to qualifying percentage often 60-70 percent.
Multi-physician group practice with multiple mid-levels
More complex. Multiple physicians rotate office presence. The mid-level may report to a specific physician but may also be supervised by whichever physician is present. Practices must document which physician is the supervising physician on each day.
Specialty practice (cardiology, endocrinology, oncology, etc.)
Mid-levels often handle high volumes of follow-up visits for chronic conditions. The physician sees the patient for initial consultation and at major decision points. Compliance documentation needs to show physician involvement at appropriate intervals.
Hospital-employed practice
Wellstar Medical Group, Piedmont Clinic, Emory Clinic, and similar large employed groups have credentialing and billing infrastructure that supports incident-to compliance at scale. The administrative complexity is managed centrally.
Concierge or direct primary care practice
These practices typically do not bill Medicare. Incident-to is irrelevant to their financial structure.
Federally Qualified Health Center
FQHCs use the encounter rate framework. Incident-to does not apply. Mid-levels can be deployed extensively without 15 percent reduction.
Rural Health Clinic
RHCs use a similar all-inclusive rate framework. Incident-to does not apply.
Provider-Based Clinic (PBC) affiliated with hospital
Hospital-affiliated outpatient clinics that operate under provider-based billing rules at 42 CFR 413.65 use hospital outpatient incident-to (42 CFR 410.27) and OPPS billing rather than office-based incident-to. The reimbursement structure differs.
Telehealth-only practice
Telehealth-only practices generally do not use the office-based incident-to framework because the patient is not in the practice's physical office.
How the framework affects Georgia beneficiary access
Brevy publishes regularly updated guides at brevy.com on Medicare billing rules, Part B coverage, provider enrollment, prior authorization, and related topics. We do not provide legal, billing, or tax advice. We provide research-grade content that explains the framework in plain language so that Georgia practices, providers, and beneficiaries can make informed decisions.
For provider-side billing and compliance questions, contact Palmetto GBA Provider Outreach at 1-866-238-9650 or visit palmettogba.com. For beneficiary questions about Medicare coverage, contact Medicare at 1-800-MEDICARE or GeorgiaCares SHIP at 1-866-552-4464.
For legal compliance questions, work with healthcare counsel familiar with Medicare billing.
Disclaimers
This article is for educational purposes only and does not constitute legal, billing, tax, or medical advice. Medicare billing rules are subject to change. The information in this article reflects rules in effect as of May 2026. Always verify current rules at cms.gov, palmettogba.com, and through current CMS Medicare Benefit Policy Manual provisions before making billing decisions.
Brevy is not affiliated with the Centers for Medicare and Medicaid Services, the Social Security Administration, the Department of Health and Human Services, Palmetto GBA, the Office of Inspector General, the Georgia Composite Medical Board, the Georgia Board of Nursing, or any other federal or state agency. Brevy is an eldercare research and information company. We accept no compensation from insurance carriers, providers, or other parties.
Information about Georgia health systems, practices, and providers reflects publicly available information as of the publication date. Practice structures and provider participation may change. Verify current information with the relevant organization before relying on it.
::: cta
Get help with Medicare incident-to billing in Georgia
Federal agencies
- Medicare: 1-800-MEDICARE (1-800-633-4227). General Medicare and Part B questions. medicare.gov
- Social Security Administration: 1-800-772-1213. Medicare enrollment. ssa.gov
- CMS Provider Enrollment: 1-866-484-8049. Provider enrollment questions. cms.gov
- HHS Office of Inspector General: oig.hhs.gov. Compliance guidance and exclusion list
Georgia state agencies
- GeorgiaCares SHIP: 1-866-552-4464. Free Medicare counseling. georgiacares.org
- Georgia Department of Community Health, Medicaid Member Services: 1-866-211-0950. Medicaid and dual-eligible questions
- Georgia Composite Medical Board: 404-656-3913. Physician and PA licensure. medicalboard.georgia.gov
- Georgia Board of Nursing: 478-207-2440. NP licensure and APRN authorization
Medicare Administrative Contractor
- Palmetto GBA Provider Enrollment: 1-855-696-0705
- Palmetto GBA Customer Service: 1-866-238-9650
- Palmetto GBA Provider Outreach and Education: through palmettogba.com
- Mailing address: Palmetto GBA, J-J Provider Enrollment, P.O. Box 100190, Columbia, SC 29202
Legal and consumer assistance
- Atlanta Legal Aid Society: 404-377-0701. Free civil legal services. atlantalegalaid.org
- Georgia Legal Services Program: 1-800-498-9469. Free legal services for low-income Georgians outside metro Atlanta. glsp.org
- Center for Medicare Advocacy: 1-860-456-7790. National Medicare appeals nonprofit. medicareadvocacy.org
- Medicare Rights Center: 1-800-333-4114. National consumer service. medicarerights.org
Professional organizations
- Medical Association of Georgia: 678-303-9290. mag.org
- Georgia Nurses Association: 404-325-5536. georgianurses.org
- Georgia Association of Physician Assistants: 478-746-4470. gapa.org
Additional resources
- Eldercare Locator: 1-800-677-1116. eldercare.acl.gov
- 211 Georgia: Dial 211 for community resources
- National Council on Aging: 1-800-794-6559. ncoa.org
Brevy
Brevy at brevy.com publishes regularly updated guides on Medicare, Medicaid, VA benefits, and caregiving across all 50 states. Our guides are free, advertising-free, and reviewed annually.
Find personalized help navigating Medicare incident-to billing in Georgia at brevy.com. :::