Incident-to billing lets a practice bill services rendered by an NP, PA, or other auxiliary clinical staff at 100 percent of the physician fee schedule when specific supervision and care-plan conditions are met. The 2026 Medicare Physician Fee Schedule permanently adopted the definition of direct supervision that allows the physician to be present via real-time audio and video communications technology, excluding audio-only. That change makes incident-to viable for more practice models, including those running multiple sites with one physician supervising remotely. It also means practices need to update their incident-to documentation to reflect the technology-based supervision when applicable.
The four conditions that define incident-to
Incident-to billing requires four conditions to be met simultaneously. First, the service must be of a type commonly furnished in physician offices and integral to the physician’s services. Second, the service must be commonly rendered without charge or included in the physician’s bills. Third, the auxiliary personnel must be employees, leased employees, or independent contractors of the physician or the entity. Fourth, the service must be rendered under the physician’s direct supervision. Direct supervision means the physician is present in the office suite (or virtually present via the technology accepted under the 2026 rule) and immediately available to provide assistance and direction.
The new patient versus established patient distinction
Incident-to billing is not available for new patients or for established patients with a new problem. The physician must establish the diagnosis and care plan in person before incident-to billing can apply. Once the diagnosis is established and the care plan is documented, an NP or PA delivering follow-up care under the same care plan can be billed incident-to. The most common audit failure is incident-to billing for new patient visits or for established patients presenting with a new complaint. The defense is a workflow that flags new problems at scheduling and routes them to the physician’s schedule, not the NP or PA schedule, when incident-to billing is intended.
Direct supervision in 2026
The 2026 PFS finalized that direct supervision can be provided through real-time audio and video, excluding audio-only. That means a supervising physician at one office site can supervise NPs and PAs at another site through a real-time video link, and the incident-to claim remains valid. Documentation must include the technology used (specific platform), the supervising physician’s location during the encounter, and confirmation that the physician was immediately available. A standing note that says “supervising physician available” is not enough; the chart should reflect specific availability for each encounter.
When to bill under the NP or PA’s NPI
When incident-to conditions are not met, the service should be billed under the NP or PA’s National Provider Identifier directly. Medicare reimburses NPs and PAs at 85 percent of the physician fee schedule for services billed under their NPI. The 15 percent differential is the price of incident-to billing in cash terms. For a practice doing 5,000 NP or PA encounters per year that average $100 in physician fee schedule reimbursement, the differential is $75,000 in annual revenue. That is real money, and it pulls practices toward incident-to billing aggressively. The audit risk pulls in the opposite direction. Most practices end up with a hybrid model where some encounters meet incident-to and some do not.
Split or shared visits in the inpatient setting
Incident-to does not apply in the inpatient setting. The parallel concept is the split or shared visit, which lets a physician and an NP or PA jointly provide an E/M service in a hospital and bill it under the physician’s NPI, with conditions. Beginning in 2026, CMS finalized that the split or shared visit must be billed by the practitioner who performed the substantive portion of the visit, and the substantive portion is defined by time. A note that documents which clinician spent the majority of time on the encounter is the defense. Hospitalist groups commonly run into split or shared audits when the documentation does not specify time allocation.
Practical workflow for incident-to compliance
Practices that handle incident-to compliance well share a few habits. They flag every patient encounter at scheduling with one of three statuses: new problem (physician must see), established problem on care plan (NP or PA can see, incident-to billable), or established problem with care plan change (physician must see). They document the supervising physician’s location and availability for every NP or PA encounter intended for incident-to billing. They run a monthly audit on a sample of incident-to claims, focusing on the patient’s history with the practice and the established-versus-new problem distinction.
How MHB helps NP and PA practices
For practices running incident-to billing alongside split or shared visits in mixed inpatient and outpatient settings, our team supports specialty medical coding for incident-to and split or shared compliance, with patient-status flagging, supervision documentation review, and monthly audit support. The work runs in the practice’s existing EHR.
The bottom line
Incident-to billing is one of the largest revenue differentials in primary care and several specialties, and the 2026 supervision flexibilities make it more accessible. The audit risk has not gone away. Practices that flag new versus established problems at scheduling, document supervision specifically, and audit monthly capture the revenue cleanly. Practices that bill incident-to by default end up explaining themselves later.
Authoritative sources
This article cites the following primary sources for billing-code and regulatory guidance. Always confirm current rules and codes with the publishing authority before applying to a specific claim.
