CMS Pub. 100-02, ch. 15, § 60.1

B3-2050.1

Incident to a physician’s professional services means that the services or supplies are furnished as an

integral, although incidental, part of the physician’s personal professional services in the course of diagnosis

or treatment of an injury or illness.

A - Commonly Furnished in Physicians’ Offices

Services and supplies commonly furnished in physicians’ offices are covered under the incident to

provision. Where supplies are clearly of a type a physician is not expected to have on hand in his/her office

or where services are of a type not considered medically appropriate to provide in the office setting, they

would not be covered under the incident to provision.

Supplies usually furnished by the physician in the course of performing his/her services, e.g., gauze,

ointments, bandages, and oxygen, are also covered. Charges for such services and supplies must be included

in the physicians’ bills. (See §50 regarding coverage of drugs and biologicals under this provision.) To be

covered, supplies, including drugs and biologicals, must represent an expense to the physician or legal entity

billing fir he services or supplies. For example, where a patient purchases a drug and the physician

administers it, the cost of the drug is not covered. However, the administration of the drug, regardless of the

source, is a service that represents an expense to the physician. Therefore, administration of the drug is

payable if the drug would have been covered if the physician purchased it.

B - Direct Personal Supervision

Coverage of services and supplies incident to the professional services of a physician in private practice is

limited to situations in which there is direct physician supervision of auxiliary personnel.

Auxiliary personnel means any individual who is acting under the supervision of a physician, regardless of

whether the individual is an employee, leased employee, or independent contractor of the physician, or of

the legal entity that employs or contracts with the physician. Likewise, the supervising physician may be an

employee, leased employee or independent contractor of the legal entity billing and receiving payment for

the services or supplies.

However, the physician personally furnishing the services or supplies or supervising the auxiliary personnel

furnishing the services or supplies must have a relationship with the legal entity billing and receiving

payment for the services or supplies that satisfies the requirements for valid reassignment. As with the

physician’s personal professional services, the patient’s financial liability for the incident to services or

supplies is to the physician or other legal entity billing and receiving payment for the services or supplies.

Therefore, the incident to services or supplies must represent an expense incurred by the physician or legal

entity billing for the services or supplies.

Thus, where a physician supervises auxiliary personnel to assist him/her in rendering services to patients and

includes the charges for their services in his/her own bills, the services of such personnel are considered

incident to the physician’s service if there is a physician’s service rendered to which the services of such

personnel are an incidental part and there is direct supervision by the physician.

This does not mean, however, that to be considered incident to, each occasion of service by auxiliary

personnel (or the furnishing of a supply) need also always be the occasion of the actual rendition of a

personal professional service by the physician. Such a service or supply could be considered to be incident

to when furnished during a course of treatment where the physician performs an initial service and

subsequent services of a frequency which reflect his/her active participation in and management of the

course of treatment. (However, the direct supervision requirement must still be met with respect to every

nonphysician service.)

Direct supervision in the office setting does not mean that the physician must be present in the same room

with his or her aide. However, the physician must be present in the office suite and immediately available to

provide assistance and direction throughout the time the aide is performing services.

If auxiliary personnel perform services outside the office setting, e.g., in a patient’s home or in an institution

(other than hospital or SNF), their services are covered incident to a physician’s service only if there is

direct supervision by the physician. For example, if a nurse accompanied the physician on house calls and

administered an injection, the nurse’s services are covered. If the same nurse made the calls alone and

administered the injection, the services are not covered (even when billed by the physician) since the

physician is not providing direct supervision. Services provided by auxiliary personnel in an institution (e.g.,

nursing, or convalescent home) present a special problem in determining whether direct physician

supervision exists. The availability of the physician by telephone and the presence of the physician

somewhere in the institution does not constitute direct supervision. (See §70.3 of the Medicare National

Coverage Determinations Manual for instructions used if a physician maintains an office in an institution.)

For hospital patients and for SNF patients who are in a Medicare covered stay, there is no Medicare Part B

coverage of the services of physician-employed auxiliary personnel as services incident to physicians’

services under §1861(s)(2)(A) of the Act. Such services can be covered only under the hospital or SNF

benefit and payment for such services can be made to only the hospital or SNF by a A/B MAC (A). (See

§80 concerning physician supervision of technicians performing diagnostic x-ray procedures in a physician’s

office.)