Medicare’s “Incident to” Billing Hinders the Recognition and Assessment of PA Value

AAPA’s Q&A Breaks Down What this Recommendation Would Mean for PAs

June 17, 2019

By Michael Powe, Vice President of Reimbursement and Professional Advocacy

The Medicare Payment Advisory Commission (MedPAC) released its June 2019 Report to the Congress: Medicare and the Health Care Delivery System on June 14.

The report included a recommendation to eliminate “incident to” billing for PAs (physician assistants) and advanced practice registered nurses (APRNs) under the Medicare program. AAPA posted a statement responding to this recommendation, which may raise questions in the PA community.

For this reason, AAPA has prepared a Q&A to help AAPA members better understand this issue and MedPAC’s recommendation.

1. What is “incident to?”
“Incident to” is a Medicare billing provision that allows a patient seen exclusively by a PA to be billed under the physician’s name if certain strict criteria are met. Medicare reimburses at 100% when a PA- or APRN-provided service is billed under a physician and 85% when those same services are billed under the name of a PA or APRN.

“Incident to” billing only applies in the office or clinic setting (not in a hospital or facility) and requires that certain additional conditions be met such as ensuring that the physician:

  • treat the patient during the initial visit for the medical condition;
  • establish a diagnosis and treatment plan; and
  • be on-site when a PA or APRN renders a follow-up service.

The use of “incident to” billing is optional, and services delivered by PAs and APRNs can always be billed under the PA’s or APRN’s name, as authorized by state law.

2. What are the implications of “incident to” billing on patients and PAs?
When “incident to” billing is utilized, care provided by a PA is attributed to a physician with whom the PA works. Patients may be confused when they receive a Medicare Summary Notice (MSN) that lists a health care professional who did not treat them. The MSN may list the name of a physician when the patient had all of their care delivered by a PA. In addition, a patient’s tests results may be misdirected to a physician when the results should be directed to the PA who is treating the patient.

“Incident to” billing also hides the positive impact of PAs on patient care and the health care system. Consequently, it’s nearly impossible to accurately identify the type, volume, or quality of services delivered by PAs. The absence of data attributed to PAs for the services they provide affects their ability to appropriately participate in performance measurement programs, such as the Centers for Medicare and Medicaid Services (CMS) Quality Payment Program, and threatens a PA’s ability to be listed along with other health professionals on performance measure databases, such as the public-facing Physician Compare website.

This inability to access accurate data in order to demonstrate value and care quality makes it more challenging for PA employers and experts reviewing Medicare data to have awareness of the essential role PAs play in health care delivery. Health care researchers and policymakers who seek to make decisions and recommendations regarding how to improve access and allocate resources are disadvantaged by inaccurate data collection caused by “incident to” billing.

3. Who is MedPAC and what are they recommending?
The Medicare Payment Advisory Commission (MedPAC) is an independent congressional agency that advises Congress on a wide variety of health care policy issues regarding the Medicare program. MedPAC does not have the ability to create new or change existing Medicare policies. That responsibility rests with Congress, the U.S. Department of Health and Human Services, and/or CMS.

In the June 2019 report, MedPAC recommended that the Medicare program eliminate “incident to” billing for PAs and APRNs and calls for all medical services performed by these health professionals to be billed under the name and National Provider Identifier number of the PA or APRN who actually provided the patient’s care.

Additionally, MedPAC recommends that PAs and APRNs be identified in Medicare claims and data gathering systems by the specialty in which they practice. Currently, PAs are listed as practicing in the specialty of “physician assistant” within the Medicare program.

4. If implemented, what would the MedPAC recommendation mean to me (a PA)?
Services previously attributed to physicians that are performed by PAs under Medicare’s “incident to” billing mechanism would begin to accurately identify the PA who rendered the care. As such, more accurate data on the quality of PA-provided care, PA productivity, and their contribution to improved patient access to care would be collected by Medicare and be visible to PAs and their employers.

Some employers of PAs may be concerned that elimination of “incident to” billing will lead to a decrease in reimbursement. Most practices will find that not having to meet the additional, burdensome “incident to” requirements (as discussed in question #1) will lead to increased practice efficiency and better utilization of PAs, which will more than make up for the 15% difference in reimbursement. In addition to increased efficiency, elimination of “incident to” billing will reduce fraud and abuse compliance risks.

5. Is elimination of “incident to” billing the only solution to improve transparency? And where does AAPA stand?
For some time, AAPA has been meeting with, and formally commenting to, CMS concerning the lack of transparency and recognition for PAs, as well as the increased risk of fraud and abuse to practices when PA-provided services are billed “incident to” a physician. We have provided CMS with ideas and suggestions to improve billing accuracy that will attribute services to the health professional who delivered the care, whether “incident to” billing is eliminated or not. AAPA will continue to work with CMS officials to further discuss this issue based upon the new MedPAC recommendations.

For more information, or for questions regarding MedPAC’s report, please contact Michael Powe, vice president of Reimbursement & Professional Advocacy.

More Resources
AAPA Responds to MedPAC’s Report on Medicare and the Health Care Delivery System
MedPAC June 2019 Report to the Congress: Medicare and the Health Care Delivery System