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What are “incident to” services?

Medicare covers services “furnished as an incident to a physician’s professional service, of kinds which are commonly furnished in physicians’ offices and are commonly either rendered without charge or included in the physicians’ bills.” [42 U.S.C. § 1395x(s)(2)(A). See also Medicare Carriers Manual § 2050, recodified as CMS Manual System, Pub. 100-2, Medicare Benefit Policy, Chapter 15, § 80.]

Medicare regulations [42 C.F.R. § 410.26] provide that, to be covered, such “incident to” services must be:

  • Furnished in a non-institutional setting to non-institutional patients;
  • An “integral, though incidental, part” of the service of a physician in the course of diagnosis or treatment of an injury or illness;
  • Commonly furnished without charge or included in the physician’s bill;
  • Of a type commonly furnished in the office or clinic of a physician;
  • Furnished under the “direct supervision” of the physician and
  • Furnished by a physician, other practitioner, or “auxiliary personnel.”

Services specifically listed in the Medicare statute as having their own separate benefit category may not be billed as “incident to” services [42 C.F.R. § 410.26].

What is a “non-institutional setting?”

Institutions include only hospitals and skilled nursing facilities. So, services furnished to hospital or skilled nursing facility patients cannot be billed as “incident to” services. All other settings are considered “non-institutional settings.”

Are audiologists “practitioners” who may receive reimbursement for services incident to their own services?

No. For purposes of “incident to” services, a “practitioner” is defined as a non-physician practitioner authorized by the Medicare statute to receive payment for services incident to his or her own services. This includes physician assistants, nurse practitioners and clinical nurse specialists [see 42 U.S.C. § 1395x(s)(2)(K)], but not audiologists.

May audiologists furnish services “incident to” a physician’s (or other practitioner’s) services?

Yes. In fact, any person may furnish services “incident to” a physician’s (or other practitioner’s) services and have those services covered by Medicare, provided the services are within that person’s scope of practice. However, a physician (or other practitioner) must bill for the services under his/her provider number. When a physician bills Medicare for audiology services incident to his or her own services, Medicare does not know who furnished the services or whether the services were within that person’s scope of practice. Audiology procedures have a separate and distinct benefit category as “other diagnostic tests” and should not be billed “incident to.”

What are the employment requirements for audiologists who furnish “incident to” services?

For his or her services to be covered as “incident to” services, an audiologist must be “auxiliary personnel.” “Auxiliary personnel” includes an employee, a leased employee, or an independent contractor of a physician (or other practitioner) or of an entity that employs or contracts with a physician (or other practitioner). A “leased employee” is an individual employed by two employers pursuant to a contract whereby one employer hires the services of an employee of the other and the relationship is recognized by the applicable state law. An “independent contractor” is an individual (or an entity, such as an audiology corporation, that has hired such individual) who performs part-time or full-time work for which the individual (or entity) receives an IRS-1099 form.

What are the physician supervision requirements for audiologists who furnish “incident to” services?

The physician (or other practitioner) must be “present in the office suite and immediately available to furnish assistance and direction throughout the performance of the procedure.” [42 C.F.R. § 410.26(a)(2), 410.32(b)(3)(ii)]. The physician (or other practitioner) need not be in the room where the procedure is performed. (Note: No physician supervision is required for diagnostic tests personally performed by an audiologist and billed directly by that audiologist. Only when services are billed as “incident to” services is “direct supervision” required.)

What audiology services may be covered as “incident to” services?

CMS recently confirmed that diagnostic audiology services (i.e., hearing and balance tests) may not be billed as “incident to” services. Hearing and vestibular tests are covered by Medicare as “other diagnostic tests.” [42 U.S.C. § 1395x(s)(3)]. Since they have their own separate benefit category, they may not be billed as “incident to” services. Any other services performed by an audiologist may be billed as “incident to” services, provided they meet the regulatory criteria listed above. These may include treatment services such as cerumen removal, aural rehabilitation, and tinnitus management services.

What about physicians who have nurses or other non-audiologist staff perform hearing and vestibular tests?

Although CMS has clarified that hearing and vestibular tests may not be billed as “incident to” services, this has not solved the problem of unqualified individuals furnishing these services to Medicare beneficiaries. CMS has taken the position that “physicians may bill for diagnostic audiology services, or any other services within their scope of practice under state law, when the service is performed by their staff, in their offices, under their direction, and when those services are not billed as incident to the physician’s services.”

In essence, CMS’ position is that Medicare covers hearing and balance tests performed by a physician’s staff as “physician’s services,” provided such tests are performed in the physician’s office and under the physician’s direction.

The Academy believes that this position contradicts CMS’ own regulations and policies. For example, the Medicare Carriers Manual states that “[w]here a physician supervises auxiliary personnel to assist him/her in rendering services to patients and include the charges for their services in his/her own bill, the services of such personnel are considered incident to the physician’s service.” [Medicare Carriers Manual § 2050.1, recodified as CMS Manual System, Pub. 100-2, Medicare Benefit Policy, Chapter 15, § 80.1]. We also believe it is bad public policy, because it provides Medicare beneficiaries no protection from allowing unqualified individuals to perform audiologic testing.

What can audiologists do about this problem?

The Academy encourages all audiologists to obtain their own Medicare Provider Identification Number (PIN) and to bill Medicare directly for hearing and vestibular tests, even if they furnish such tests as employees in a physician’s office. Audiologists who do not have a PIN may obtain one by completing an application. A CMS 855I application for an individual practitioner; a CMS 855R for a reassignment of benefits from the individual practitioner to an employer or group practice, or a CMS 855B for the enrollment of group practices (with each group member completing the 855I).

It is important for audiologists to obtain their own provider numbers and to bill Medicare directly for hearing and balance tests that they perform. CMS collects data on which professions are providing which services. If a physician bills for a hearing test using the physician’s provider number, CMS data will indicate that the physician performed the test, even if the test was actually performed by an audiologist. (For example, currently, ENT’s bill the large majority of comprehensive hearing evaluations (CPT® 92557), even though these services are actually performed by audiologists.) The audiology profession needs reliable data to be able to show that audiologists are the most cost-effective and clinically sound way to provide audiology services.

CPT is a registered trademark of the American Medical Association.

Disclaimer: The purpose of the information provided above by the American Academy of Audiology Coding and Practice Management Committee is to provide general information and educational guidance to audiologists. Action taken with respect to the information provided is an individual choice. The American Academy of Audiology hereby disclaims any responsibility for the consequences of any action(s) taken by any individual(s) as a result of using the information provided, and reader agrees not to take action against, or seek to hold, or hold liable, the American Academy of Audiology for the reader’s use of the information provided. As used herein, the “American Academy of Audiology” shall be defined to include its directors, officers, employees, volunteers, members and agents.

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