Big Changes to Federal DHS Supervision Rules

By: Jeff Cohen

Proposed changes to the “incident to services” rule in the 2016 Medicare Physician Fee Schedule are set to seriously impact how medical practices provide certain services, bill for them and share income from those services.

Incident to services are services or items that are furnished as an integral part of the professional services of a physicians or other practitioner in the course of diagnosis or treatment.  80 Fed. Reg. at 41785.  They are billed to CMS as though the physician actually provided the service.  One of the rule’s key requirements is that a physician directly supervise the performance of the services, which has meant that a physician who is part of the practice has to be physically present in the office when the services are provided.  If, for instance, a physician in the practice was present when physical therapy or diagnostic imaging was provided to a patient, the services could be billed to CMS as though the physician actually provided the services, even though the service was provided by, for instance, a licensed physical therapist or imaging technician.      

The proposed change would, however, require that the ordering physician be the physician who directly supervises performance of the service.  Moreover, in order to bill anything under a physician’s provider number “incident to” that physician’s services, the proposed rule forbids the “auxiliary personnel” that perform the incident to services from (1) having been excluded from Medicare, Medicaid or any other federal healthcare program and (2) having had their enrollment revoked.

Why is CMS proposing this change?  Money.  CMS apparently believes that the change will enable them to deny requested payment for improperly submitted claims or recoup payments made.

How does this affect practices?  At a minimum, the changes will require practices to:

  • Strictly background check any employee who provides incident to service;
  • Update compliance policies and procedures to include this provision;
  • Include this new requirement in their self-audits;
  • Prepare for payment reduction, since billing for services under the auxiliary personnel typically entitles a practice to reduced reimbursement;
  • Reconsider how they allocate profits from incident to services.

The deadline for submitting comments regarding the proposed rule is September 8, 2015!


One thought on “Big Changes to Federal DHS Supervision Rules

  1. Pingback: T’was the night before the First Tuesday after the First Monday in March, and all through the House (and the Senate…) | Florida Healthcare Law Firm Blog

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