CMS Permanently Updates "Incident To" Physician Supervision Rule for Medicare Billing

Recent misunderstanding about Medicare's "incident to" billing requirements has persisted among consulting organizations. The regulation 42 CFR 410.26(b)(2) explicitly permits billing "incident to" services during the diagnosis or treatment of injury or illness, allowing non-physician practitioners to diagnose while billing under a supervising physician. Contrary to some Medicare Administrative Contractors (MACs) interpretations, diagnosing a new problem is allowable under "incident to" billing. A key aspect of "incident to" services is the requirement for direct supervision by a physician within the group. Traditionally, this meant the physician had to be physically present in the same office suite but not necessarily in the room. However, during the COVID-19 pandemic, CMS revised the definition of "direct supervision" under 42 CFR § 410.32(b)(3)(ii) to include virtual supervision via real-time audio/visual technology. This temporary change was initially applicable for the duration of the public health emergency but has since been extended multiple times and is now permanent as per the 2026 Medicare Physician Fee Schedule. Consequently, a physician no longer needs to be physically present to provide direct supervision; they can fulfill this requirement through virtual presence via devices such as smartphones. This update reflects an important regulatory shift impacting compliance and billing practices. Industry consultants and professionals must recognize this evolution to avoid misinterpretation and incorrect training about "incident to" supervision requirements. The article emphasizes the need for insurance and healthcare professionals to verify regulatory citations directly, particularly when conflicting interpretations arise. The official e-CFR site and Medicare Fee Schedules provide authoritative resources to clarify current standards. The discussion highlights the challenges in interpreting Medicare billing rules and underscores the importance of accurate knowledge for compliant medical billing and documentation. Misunderstandings can lead to inappropriate billing practices and potential audits. Additional insights from related health compliance topics include the emphasis on accurate principal diagnosis designation, which is critical for reimbursement and quality reporting. Also noted are ongoing efforts to mitigate denials through better documentation, workflow integration, and predictive analytics using AI. Healthcare revenue integrity and compliance remain focal points amidst evolving regulations. Providers must stay informed of CMS updates, particularly those affecting supervision rules and billing policies, to maintain effective compliance and safeguard reimbursement channels.