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Incident-To Billing: A Complete Guide

Therapist completing a session that will be billed incident-to

Incident-to billing is a way of billing outpatient services rendered in a non-institutional setting by a non-physician practitioner and being paid for services. This kind of billing is tricky because there are Medicare guidelines that dictate how incident-to billing is supposed to work and then each commercial insurance company has their own tweak of the process put forward by Medicare. In this blog we will clarify the process that Medicare stipulates must be met in order to bill incident-to. We will also clarify some of the best practices around navigating incident-to billing from a commercial insurance company's perspective. It is important to know how incident-to billing works so you don’t accidentally commit insurance fraud, and to increase productivity in your practice.

First, we will cover the six basic requirements that must be met to fully satisfy the guidelines for Medicare payment.

1. The service must take place in a non-institutional setting

This is a very important factor in the incident-to billing process. Medicare will not pay for a claim that is incident-to if the place of service is any institutional setting. You must make sure that the place of service that the session is located in is in the office or any other non-institutional setting. For most private practices this is not going to be a big issue and is solved by the fact that you are conducting sessions in an office setting.

2. A Medicare credentialed provider must initiate a patient’s care

This is the part of the process, at least for Medicare, that will trip up quite a few practices when trying to implement this process. For Medicare, you will need a Medicare credentialed provider to initiate a patient’s care. This means that in order for incident-to billing to be possible, the first session must be conducted by a Medicare credentialed clinician. This might be difficult or even impossible for many therapists to complete if they are not credentialed with Medicare. One possible solution is to recruit a clinician who is already or is willing to be Medicare credentialed in order to utilize incident-to billing procedure with Medicare.

3. After the initial encounter with the Medicare credentialed provider a non-physician provider may provide follow up care

Once the initial session has been completed and there is a treatment plan in place then you can have a non-physician provider conduct follow up care with the client. This is where the beauty of incident-to billing really comes into focus. If you are the Medicare credentialed clinician you can hand off follow up visits to the non-physician provider. This is a good way to expand the capabilities of your team and your practice.

4. A physician must actively participate in and manage the patient’s course of treatment

This is another critical element in the process that is belabored by clinicians because it requires a physician to be actively involved in the treatment of the client. Since Medicare is a government funded program, there are some complicated rules and regulations around payment. When you add a government program to a complicated system like incident-to billing guidelines you have to abide by the rules set forward by the payer.

If you are in network with Medicare then you understand the complexities that are involved with taking Medicare. We highly recommend becoming familiar with Medicare’s guidelines around payment and incident-to billing. If you are not familiar with Medicare guidelines we recommend navigating to the CMS website and reading material that is published on the website.

5. Both the credentialed clinician and the qualified non-physician provider providing the incident-to service must be employed by the group entity billing for the service

This is an important compliance regulation in regard to the incident-to billing guidelines. You cannot have a contracted clinician providing the services. Both the Medicare credentialed clinician and the non-physician provider providing the incident-to service must be employed by the group billing entity for the service.

This means that they both must be employed and receive a tax return from the group. If you are a practice that does not have a group billing NPI and does not employ the clinicians then you would need to refrain from conducting any incident-to billing services.

6. The incident-to service must be the type of service usually performed in the office setting and must be part of the normal course of treatment of a diagnosis or illness

This is a clinical guideline that qualified clinicians and non-physician providers must be aware of when providing incident-to billing services. The service must be performed in the office setting as we have already stated but also must be a part of the normal course of treatment of the diagnosis or illness. If you are providing an unorthodox treatment modality or a different kind of treatment for the diagnosis that would be considered abnormal, you cannot provide incident-to billing services for that client.

Best practices for navigating incident-to billing for a commercial insurance company

The guidelines for incident-to billing services for Medicare and Medicaid are well documented and public knowledge. The reason for that is that both of those government payers are required to publish and make public their guidelines for payment.

What is not public knowledge and is not required to be published are the commercial insurance company policies around incident-to billing. Each commercial insurance company has their own set of guidelines and rules that must be followed in order to secure payment for incident-to billing services.

We would like to provide you with some of the best practices in the industry so that you can avoid some headache that comes with billing for incident-to services.

Know the contract

One of the best practices in the revenue cycle management industry is to know the contract that you have with the insurance company very well. It is a good idea to study your contract with the insurance company so that you know the laws and regulations that you are required to follow as a participating provider of that insurance company.

Because incident-to billing services vary between commercial insurance companies it is important to research your contract for the guidelines around incident-to billing. We have seen contracts with the insurance company that state that providers cannot provide incident-to billing services and we have seen some contracts that state very specific guidelines around incident-to billing services. It all depends on the insurance company and there is no universal rule around the guidelines for incident-to billing services when it comes to commercial insurance companies.

Know the provider manual

Another best practice in the revenue cycle management industry is to know the provider manual for the insurance company that you are in network with. The provider manual gives specific guidance to providers around a wide range of scenarios and situations that the provider might encounter while engaged in a contract with the insurance company. Insurance companies know that there are a lot of questions around incident-to billing services so there is usually a section in the provider manual dedicated to incident-to billing.

Make sure that you understand the provider manual or that someone in your office is intimately familiar with the provider manual.

Build a relationship with a contact person at the insurance company

Our last tip for navigating the incident-to billing process at the insurance company is to find a connection or a contact within the insurance company that you can ask direct questions to. Oftentimes providers will call the general line for the insurance company and talk to a representative. The problem is that those representatives don’t always have the most in-depth knowledge around incident-to billing guidelines.

If you are able to make a connection within the insurance company, especially with a provider area consultant, you will get much better information and guidance around what you are allowed and not allowed to do in regard to incident-to billing services.


If after following all of those guidelines you are still not able to arrive at a place of clarity in regard to incident-to billing guidelines we recommend either following the Medicare guidelines or avoiding incident-to billing altogether until you are able to gain clarity around the specific guidelines necessary to remain compliant. This is one of the areas that an outsourced biller can help with and sometimes may specialize in guidance around incident-to billing.

It is important to ensure compliance and adhere to the regulations set forward especially when working with government or commercial insurance companies.

If you have any questions about billing regulations or if you find yourself in a situation when you don’t know the answers, we will be more than happy to take your call and answer any questions that you may have.

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