New “Incident To” Proposals: Group Practices Should Be Concerned

Aug 11, 2015 at 09:08 am by steve


A number of excellent articles have been written about the new Stark regulatory exceptions contained in the CMS physician fee schedule update for Calendar Year 2016 released on July 8, 2015. (See the Wednesday, July 15 Birmingham Medical NewsBlog by Kristen Larremore for a succinct summary of the proposals relating to timeshare arrangements and the recruitment of physician extenders.) However, group practices may have missed the important and objectionable proposals relating to “incident to” billing for ancillary services under Medicare contained in this same draft physician fee schedule update.

CMS (the Center for Medicare & Medicaid Services) defines “incident to” services as those services that are furnished in conjunction with a physician’s professional services in the physician’s office or in a patient’s home but are not personally performed by a physician. To qualify as “incident to” services, the services must be part of the patient’s normal course of treatment, during which a physician personally performed an initial service and remains actively involved in the course of treatment. Typical “incident to” services can include nurse practitioner services, physical or occupational therapy, and chemotherapy when furnished in a physician’s office. Many group practices generate a significant portion of their revenues through “incident to” services.

Under the proposed rule, CMS is seeking to implement a series of restrictions regarding when physicians can supervise and bill for “incident to” ancillary services. CMS “incident to” rules currently require supervision of the personnel providing the service in the physician office by a physician in the group practice. This supervision can either be personal, direct or general depending on the exact type of service being performed. Currently, supervision can be by any qualified physician employed or under contract with the group physician practice.

Under the CMS proposal,  the supervising physician must be the same physician upon whose service the “incident to” billing occurs. In other words, the billing physician and the supervising physician must be the same. Specifically, CMS states that the “Medicare billing number of the ordering physician or other practitioner should not be used if that person did not directly supervise the auxiliary personnel.” CMS also makes clear that the attestation that the physician makes when a bill is submitted in the physician’s name for “incident to” services is a representation to the federal government that the same physician supervised the service that is the subject of the bill. 

This proposal is particularly problematic for physician-operated cancer centers when chemotherapy is being administered to a patient for long periods of time over a number of days. Interpreted literally in the proposal, the same physician would have to examine the patient, order the chemotherapy and be physically present in the office at all times when one of his or her patients is receiving chemotherapy. Especially, when a physician practice has multiple locations and multiple physicians it is grossly impractical to have the same physician physically present for treatment that occurs over several hours for multiple days a week. 

This proposal raises a number of practical considerations. What happens when the ordering physician is on vacation and the patient needs continuing treatment? Likewise, what is the group practice to do when a physician is called away to a hospital in an emergency situation? If enacted, this proposal will make it much more difficult for group practices to provide chemotherapy to patients in their practice offices. One other reason that the proposal is troublesome is that Medicaid and private payors frequently follow Medicare changes in supervision requirements and payment policies with respect to physician practices. In addition, CMS is proposing that no person excluded from Medicare or Medicaid can participate in the provision of “incident to” services to patients and must otherwise comply with every aspect of state and federal law.

CMS has expressed its increasing dislike of “incident to” billing and has in the last decade or so consistently acted to limit the availability of this billing option for physician group practices. The Office of Inspector General (the “OIG”) for the Department of Health and Human Services put out an often quoted but much maligned report on “incident to” billing in August of 2009. In the report, the OIG alleged that many “incident to” procedures were improperly supervised and were unnecessary for patient care. This report was likely the genesis of the CMS proposal in the 2016 physician fee schedule.

Hopefully, the loud outcry from physicians and their advocates will cause CMS to withdraw or substantially modify this unreasonable draft regulation. The proposed rule can be found at https://www.federalregister.gov/articles/2015/07/15/2015-16875/medicare-program-revisions-to-payment-policies-under-the-physician-fee-schedule-and-other-revisions. Comments are due on or before September 8, 2015 and may be submitted online.

 


Colin Luke is a partner with Waller where he provides legal work for Hospitals, health systems, physicians, and outpatient services

 





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