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🏛️ Policy & Payers

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The Deep Dive

Incident-To or Incident-Oops?

Unlocking 15%+ Revenue Without Triggering Audits

Why you should care: The Office of Inspector General added incident-to billing to its 2025 Work Plan, flagging it as a hotspot for abuse. Penalties sting: 100% recoupment of overpayments plus up to $50k per violation. At the same time, non-physician providers (NPPs) already perform 11.5% of all dermatology procedures — and that share is rising. Get the rules right and you earn the full physician rate. Miss a requirement and you lose 15% off the top and invite an audit.

Scenario

Bill Under

Reimbursed

Established patient + established problem and MD is on-site → all incident-to rules met

Physician NPI (incident-to)

100 % of fee schedule

New patient OR new problem OR MD not on-site

NPP NPI

85 % of fee schedule

MD personally performs the visit (any patient/problem)

Physician NPI

100 % of fee schedule

  • Direct supervision = physician (or another physician in the group) physically in the office suite.

  • Care plan continuity = NPP follows a treatment plan the physician created. Any new problem nukes incident-to eligibility until the MD re-evaluates and creates the treatment plan.

  • Documentation for any service billed incident-to must reference the supervising physician’s original plan of care and explicitly document that the physician was on-site. Best practice is dual signatures from both providers, e.g. “Incident to Dr. Smith’s plan dated 3/1/25; Dr. Smith on-site.”

  • If the PA/NP is credentialed and the visit fails any incident-to test, billing must default to the NPP’s NPI … Medicare and most commercial payers require this. However, it is always important to check with commercial payers first as their rules may differ from Medicare.

🛑 Incident-to is never a workaround for uncredentialed providers -- expect audits and 100% claw-backs.

Show me the money

A typical dermatology clinic logging 5,000 qualifying follow-ups at $120 each can recapture $90k per year vs. billing at the NPP’s 85% rate. Flip side: submit non-compliant claims and every dollar is at risk during an audit — plus fines.

Three ways practices get burned:

  1. New = No-Go

    Billing incident-to for a new rash, lesion, or brand-new patient is the fastest way to invite claw-backs.

  2. Roaming MDs

    If the supervising dermatologist ducks out to another suite or leaves early, those encounters revert to direct NPP billing — period.

  3. Swiss-cheese notes

    Missing links between the MD’s care plan and the NPP’s work sink claims in post-payment review.

Your compliance checklist

  • Only book established-problem follow-ups on the incident-to template. Everything else defaults to NPP billing.

  • Create these EHR nudges:

    • Hard-stop alerts for “new diagnosis” codes.

    • Auto-populate supervising MD and on-site confirmation fields.

  • On a quarterly basis, pull a 10% random sample, verify supervision, plan linkage, and correct NPI. Track error rate - if it’s >5%, retrain immediately.

  • Maintain a cheat-sheet of modifiers, supervision levels, and carve-outs… and update it twice a year (at least). Medicare sets the baseline, but every commercial payer and Medicaid program writes its own rules.

Strategic upside

Handled correctly, incident-to lets physicians offload routine follow-ups, expands patient access, and pads margins without adding headcount. Handled sloppily, it converts profitable visits into compliance liabilities. Given dermatology’s high procedure volume and growing reliance on NPPs, the delta between mastery and mistakes easily reaches six figures per year.

Bottom line. Incident-to isn’t optional extra revenue, it’s a high-stakes compliance exercise with a 15% swing in reimbursements. Treat it like a revenue lever wrapped in a bear trap: step lightly, document obsessively, and audit relentlessly.

Need a sanity check on your incident-to processes? Clarity RCM specializes in dermatology billing and can benchmark your compliance posture in under two weeks. Learn more at clarityrcm.com/contact-us.

FAQ

  • Physician stepped out mid-day — bill incident-to anyway? No. Bill under the NPP’s NPI for the time they were unsupervised.

  • Cosmetic procedures? Generally self-pay, so incident-to doesn’t apply.

  • Tele-supervision still allowed? Only through 12/31/24 (pending CMS action). Plan for in-person supervision now.

Practice Spotlight

Arya Derm

Premium dermatology meets a curated apothecary. Arya Derm’s board-certified duo, Dr. Lavanya Krishnan and Dr. Forum Patel, deliver end-to-end skin care in their state-of-the-art San Francisco clinic, covering medical, cosmetic, and esthetic services. Beyond the exam room, they run a physician-formulated product line (Arya Derm “Basics”) plus a hand-picked shop of SkinCeuticals, SkinMedica, and more, so every treatment plan comes with the exact moisturizer, serum, or SPF your skin needs.

“Every patient deserves data-driven dermatology and a plan as personal as their skin.”

Dr. Lavanya Krishnan
Got a practice to nominate?
The Toolkit

Things to check out this week

  1. 📄 Article You Need: Care More, Code Less – Using Actionable HCC Alerts to Increase Efficiency, Improve Outcomes & Revenue - Premier shows how one system’s point-of-care HCC alerts bumped its Medicare Advantage revenue by $13 M in a single year. 

  2. 🛠️ Tool You Should Try: AAPC E/M Utilization Benchmark - Drop in a doctor’s (or your whole practice’s) CPT mix and see instantly where you over- or under-index against 2021 Medicare peers—red-flagging audit risk before CMS does.

  3. 🎧 Event Alert: 2025 AADA Legislative Conference - Sept 7-9, JW Marriott, Washington DC. Network with fellow derms, earn AMA PRA credit, and tell Congress why Medicare payment reform can’t wait.

Need a pro?

When you're ready for an expert to make your practice's billing bulletproof, schedule a strategy call with our team.

That’s it for this week.

This one was super fun. Hope you enjoyed it too.

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