As healthcare practices balance compliance, efficiency, and revenue, the role of advanced practice providers, Nurse Practitioners (NPs) and Physician Assistants (PAs) is expanding. These providers play a vital role in improving patient access and outcomes. But the financial impact of their work depends on how services are billed.

The two primary models, incident-to billing and independent billing have very different rules and reimbursement rates. Understanding these models is essential for practice managers, office administrators, and providers seeking to optimize revenue while staying compliant.

What Is Incident-to Billing?

Incident-to billing allows services delivered by NPs or PAs to be billed under a supervising physician’s National Provider Identifier (NPI).

Key Requirements:

• Initial patient visit and treatment plan must be performed by the physician.
• The NP or PA must follow that established plan of care.
• The supervising physician must be present in the office suite (direct supervision).
• Documentation must reflect the physician’s involvement.

Reimbursement:

• 100% of the Medicare Physician Fee Schedule when billed under the physician’s NPI.

Example Scenario – Incident-To

A patient with newly diagnosed hypertension sees Dr. Smith for the initial visit. Dr. Smith orders labs, prescribes medication, and establishes the care plan.

At the follow-up visit, the NP adjusts the patient’s medication while Dr. Smith is present in the office. The NP documents the encounter according to the plan.

The visit qualifies as incident-to, billed under Dr. Smith’s NPI at 100% reimbursement.

If Dr. Smith were not in the office, the visit would have to be billed under the NP’s NPI at 85%.

What Is Independent Billing?

Independent billing occurs when the NP or PA is credentialed with Medicare, Medicaid, or commercial payers and bills under their own NPI.

Key Features:

• Provider practices independently within state scope-of-practice laws.
• Physician oversight may still be required by state law, but not for billing.
• Documentation lists the NP or PA as the rendering provider.

Reimbursement:

• Medicare: 85% of the physician fee schedule.
• Commercial payers: Rates vary; some reimburse at or near physician levels once the NP/PA is credentialed.

Example Scenario – Independent Billing

A patient with acute bronchitis visits urgent care. An NP evaluates, orders a chest X-ray, prescribes medication, and documents the visit. The supervising physician is not in the office.

The NP bills under their own NPI at 85% of the Medicare fee schedule.

Commercial payers may reimburse at 100%, depending on agreements.

If the NP is not credentialed, the claim may be denied or defaulted to incident-to rules.

Incident-To vs. Independent Billing: Side-by-Side Comparison

How to Choose the Right Model

• Smaller practices with strong physician involvement may benefit from incident-to billing to maximize reimbursement.
• Larger or multi-site practices may prefer independent billing, which offers greater flexibility and autonomy for NPs/PAs.

Compliance should always drive the decision. While incident-to billing can yield higher short-term revenue, failing to meet supervision or documentation requirements exposes practices to significant audit risks.

Conclusion

For practices employing NPs and PAs, understanding incident-to vs. independent billing is critical to compliance and revenue optimization. By aligning your billing model with CMS rules, payer requirements, and workflow realities, your practice can maximize reimbursement while minimizing audit risk.

Need help with Credentialing or Billing compliance?

Schedule A Consultation with TriumpHealth today to ensure your practice’s billing process aligns with Medicare, Medicaid, and commercial payer requirements. You can also reach us via [email protected] or (888) 747-3838 x0.