A three-physician internal medicine practice added two nurse practitioners in 2024 and, by early 2026, the NPs were seeing about 40 percent of the visits. The billing office had a rule: bill everything the NPs did under the physician who was "on" that day. It looked efficient and it paid 100 percent of the Medicare fee schedule. Then a Medicare contractor asked for records on 30 claims. Eleven were new patients. Six were established patients seen for a new complaint the physician had never evaluated. On four, the schedule showed the supervising physician was at the hospital. Those 21 claims did not meet the incident-to rules, and the practice repaid the difference plus the visits that should not have been billed under the physician at all.
The rules for billing non-physician practitioner visits are not complicated, but they are specific, and they differ by setting. In the office, an NP or PA visit is either billed under the NP's or PA's own number at 85 percent of the fee schedule, or it meets every incident-to requirement and is billed under the supervising physician at 100 percent. In a hospital or other facility, incident-to does not exist, and a visit performed jointly by a physician and an NP is a split or shared visit billed under whoever did the substantive portion, with modifier FS. Mixing up the two, or treating incident-to as a default, is how practices end up in the situation above.
This article sets out the incident-to billing rules, the split/shared rules, a worked example with 2026 dollars, and the questions an auditor will ask. Glossary line: non-physician practitioner (NPP) is Medicare's term for nurse practitioners, physician assistants, clinical nurse specialists and a few other clinicians who can enroll and bill in their own right.
Key takeaways
- An NPP enrolled in Medicare bills under their own NPI and is paid 85 percent of the physician fee schedule; that is the default, not a penalty.
- Incident-to billing at 100 percent applies only in the office, only for established patients with an established plan of care, only with the physician physically present in the suite, and never for a new problem.
- Split/shared visits apply only in facility settings; the substantive portion since January 1, 2024 is more than half of total time or the medical decision making, and modifier FS is required.
- Commercial payers vary: some do not recognize incident-to at all and require every NPP to be credentialed and billed directly. Check each contract.
- The note must show who did what; a claim under a physician's number for a visit the physician never touched is the pattern auditors look for.
Incident-to billing rules in the office: every condition, every time
Medicare's incident-to rules are in the Medicare Benefit Policy Manual, Chapter 15, Section 60. Services furnished "incident to" a physician's professional services may be billed under the physician when all of the following are true. The setting is the physician's office or another non-facility setting; incident-to does not apply in a hospital, including hospital outpatient departments. The patient is an established patient of the practice for whom the physician has performed the initial service and established a plan of care, and the NPP's visit is carrying out that plan. The physician provides direct supervision, meaning the physician is present in the office suite and immediately available, not necessarily in the room. The NPP is an employee, leased employee or independent contractor of the physician or the group. And the physician remains actively involved in the patient's care over time, which contractors read as seeing the patient at a frequency that reflects ongoing management.
Two consequences follow that practices get wrong. A new patient can never be incident-to, because there is no plan of care yet. And an established patient who presents with a new problem cannot be incident-to for that problem; the NPP either bills under their own number or the physician sees the patient and establishes the plan. The supervising physician who is billed is the one present that day, who may be different from the physician who wrote the plan of care.
CMS has permitted direct supervision through real-time audio and video technology for many incident-to services in recent fee schedule rules; the details and exceptions are in the current physician fee schedule and your contractor's guidance, and we would confirm both before relying on virtual presence.
Split/shared visits in the facility
In a hospital inpatient or outpatient setting, an emergency department, or a skilled nursing facility, a physician and an NPP in the same group may each perform part of an evaluation and management visit for the same patient on the same day, and the visit is billed once under whichever of them performed the substantive portion. Since January 1, 2024, Medicare defines the substantive portion as more than half of the total time spent by both clinicians, or a substantive part of the medical decision making. The claim carries modifier FS, and the record must identify both clinicians and show what each did. CMS did not change this policy for 2025 or 2026.
Split/shared does not apply in the office. A physician who pops into an NP's office visit for two minutes has not created a shared visit; the office visit is either incident-to (if every condition above is met) or billed under the NP. And an NPP cannot be the billing clinician for a split/shared critical care service unless they performed the substantive portion themselves.
| Element | NPP bills under own NPI | Incident-to (office) | Split/shared (facility) |
|---|---|---|---|
| Setting | Any | Office or other non-facility only | Hospital, ED, SNF and other facility settings only |
| Patient | New or established | Established, with a physician plan of care already in place | New or established |
| Problem | Any | Only problems already in the physician's plan of care | Any |
| Physician involvement | None required | Direct supervision: present in the suite; ongoing active involvement | Performs a substantive portion: more than half the time or the MDM |
| Billed under | NPP's NPI | Supervising physician present that day | Whoever performed the substantive portion |
| Modifier | None specific | None on the claim; supervision documented in the note | FS |
| Medicare payment | 85 percent of the fee schedule | 100 percent | 100 percent if physician bills; 85 percent if NPP bills |
| Commercial payers | Usually recognized; rate varies by contract | Many do not recognize; some require NPP credentialing and direct billing | Follows payer policy; many follow Medicare |
A worked example with 2026 numbers
The 2026 Medicare conversion factor for clinicians not in an advanced alternative payment model is $33.40. An office visit 99213 carries roughly 2.7 total relative value units in the non-facility setting, so it pays about $90 before sequestration and geographic adjustment; a 99214 at roughly 3.8 units pays about $127. Billed under an NP at 85 percent, those become about $77 and $108.
Case one. A 66-year-old established patient with hypertension and hyperlipidemia, on a plan the physician wrote at a visit four months ago, sees the NP for follow-up. Blood pressure is at goal, labs are reviewed, medications are continued. Dr. A, who is not the physician who wrote the plan, is in the suite seeing other patients. This visit meets every incident-to condition and is billed as 99213 under Dr. A at about $90. The note should record that the NP performed the visit, that Dr. A was present and available, and that the plan of care was established by the practice's physician on the earlier date.
Case two. The same patient mentions three weeks of knee pain. The NP examines the knee, orders an X-ray and prescribes an anti-inflammatory. Knee pain is a new problem with no plan of care. The visit cannot be incident-to. Either the NP bills the whole visit under her own NPI (99214, about $108 at 85 percent), or Dr. A sees the patient, evaluates the knee and establishes the plan, and the visit is billed under Dr. A on the strength of the physician's own work. Splitting the visit into an incident-to portion and an NP portion is not an option in the office.
Case three. The same practice rounds at the hospital. Dr. A sees an inpatient for eight minutes and makes the discharge decision; the NP spends 25 minutes on history, exam and documentation. Total time 33 minutes; the NP has more than half. Under the time test the substantive portion is the NP's, and the visit is billed under the NP with modifier FS at 85 percent. If the practice wants to bill under Dr. A, Dr. A must have performed the medical decision making in a documented way that meets the substantive part test, and the note must show it. The way to earn the 100 percent is for the physician to do the work, not to change the name on the claim.
What auditors ask, and what the note has to answer
Contractors reviewing incident-to claims ask five questions. Was the patient established? Was there a physician plan of care for every problem addressed? Was the billing physician physically present in the suite, and can you prove it from the schedule? Who actually performed the service, and does the note say so? Has a physician seen the patient recently enough to show ongoing involvement? A note that reads as if the physician performed a visit that an NP performed fails the fourth question regardless of the others, and that is the finding that turns an overpayment into something worse.
Two controls fix most of this. First, the EHR should record the rendering clinician (who did the work) and the billing clinician separately, and the claim should be built from both with a rule that blocks incident-to billing for new patients and for visits where the supervising physician's schedule shows them out of the office. Second, the billing team should pull a monthly sample of NPP visits billed under physicians and check them against the five questions. Practices that bill through our medical billing service get that sample as part of the monthly compliance report, and the RCM training courses cover NPP billing scenarios with real notes.
Questions we hear
Our biggest commercial payer says it does not recognize incident-to. What do we do?
Credential every NPP with that payer and bill their visits under their own NPI at whatever rate the contract sets, which for some commercial payers is 100 percent of the physician rate. Then keep a payer grid: for each payer, whether incident-to is recognized, whether NPPs must be credentialed, and the NPP rate. Billing incident-to to a payer that does not recognize it is a false claim under that contract even if Medicare would have allowed it.
Can the NP see a new patient if the physician is in the building?
Yes, and the visit is billed under the NP at 85 percent. The physician's presence does not make a new patient visit incident-to; the missing element is the physician's own initial service and plan of care. If the physician sees the new patient personally and establishes the plan, the visit can be billed under the physician on the physician's own work, and later follow-ups carrying out that plan can be incident-to.
Does incident-to apply to services other than visits?
Yes, and that is its original purpose. Injections given by a nurse under a physician's order, supplies, and many services by clinical staff who cannot bill in their own right are furnished incident-to the physician's service and billed under the physician. The same supervision and plan-of-care conditions apply, and the payment is 100 percent because the clinical staff have no fee schedule of their own.
What to do this week
- Pull all NPP visits billed under a physician for the last quarter and check each against the five questions; count the new patients and new problems.
- Build the payer grid: incident-to recognized or not, NPP credentialing required, NPP payment rate, for every payer over 5 percent of revenue.
- Confirm every NPP is enrolled in Medicare and credentialed with every payer that requires it, so billing under their own NPI is always available.
- Add the rendering-versus-billing clinician fields to the claim build and the rule blocking incident-to for new patients.
- Write the one-paragraph documentation standard for incident-to visits (who performed, who supervised and where, which plan of care) and add it to the note template.
