PMHNP Billing and Coding
Incident-To Billing for PMHNPs
A deep dive on incident-to versus direct billing for psychiatric nurse practitioners: the 85% versus 100% Medicare difference, the exact conditions you must meet, split/shared documentation, when it is worth it, and the compliance risk if you get it wrong.
The Core Idea
Incident-To vs. Direct Billing
When a PMHNP bills Medicare under their own National Provider Identifier (NPI), Medicare pays 85% of the physician fee schedule amount for the service, per 42 CFR 414.56. Under the incident-to provision, the same service delivered by the PMHNP can be billed under the supervising physician’s NPI and paid at 100% of the physician fee schedule, because it is reported as if the physician furnished it. That 15-point gap is the entire financial reason practices consider incident-to.
It is not free money. Incident-to comes with strict conditions from CMS, and billing a visit as incident-to when the conditions are not met is an overpayment and a compliance exposure.
Informational, not billing or legal advice. Verify every requirement against current CMS guidance, 42 CFR, and your Medicare Administrative Contractor before relying on incident-to.
The Rules
The Exact Conditions for Incident-To
Per the CMS Incident To Services and Supplies guidance and the Medicare Benefit Policy Manual (Pub. 100-02, Chapter 15), all of the following generally must be true:
Physician-Established Plan of Care
The physician must have personally seen the patient, established the diagnosis, and set the plan of care. The PMHNP is then carrying out that existing plan on subsequent visits.
Existing Problem, No New Diagnosis
Incident-to applies to follow-up care for an already-addressed problem. New patients, and new problems for existing patients, are not eligible because they fall outside the physician’s preexisting plan of care. A new complaint must be billed under the PMHNP’s own NPI.
Direct Supervision
The service must be under direct supervision. Traditionally this meant the physician was present in the same office suite and immediately available (not merely reachable by phone). Effective January 1, 2026, CMS permanently allows direct supervision to be met through real-time audio/video presence for many services, though certain higher-risk services still require physical presence. Confirm the current definition for your service.
Billed Under the Physician NPI
The claim goes out under the supervising physician’s NPI in a non-institutional (office) setting, and the supervising physician must be an owner or employee of the entity billing for the service.
Sources: 42 CFR 414.56, CMS Incident To Services and Supplies, and the AAFP guidance on incident-to and shared services.
A Common Point of Confusion
Incident-To vs. Split/Shared Visits
Incident-to (office setting) is not the same as a split or shared visit (typically facility settings). In a split/shared E/M visit, a physician and a PMHNP in the same group each personally perform part of the same encounter, and CMS rules determine who bills based on who performed the substantive portion. Under current CMS policy, when time is the basis, the practitioner who spends more than half of the total time bills the visit; both clinicians must document their own contributions.
The practical takeaways for a PMHNP:
- Document your own time and work in the note, distinctly from the physician’s.
- Note who established and who is maintaining the plan of care.
- If the substantive/majority portion was the PMHNP’s, the visit is generally billed under the PMHNP NPI at 85%, not the physician’s at 100%.
See the CMS Psychiatry and Psychology Services article (A57480) and AAFP shared-services guidance.
The Math
When Incident-To Is Worth It
The upside is the 15% difference between 85% and 100% of the physician fee schedule on qualifying follow-up visits. Whether that is worth pursuing depends on your setup:
| Scenario | Bill under | Medicare pays |
|---|---|---|
| PMHNP sees a new patient or new problem | PMHNP NPI (direct) | 85% of PFS |
| PMHNP follows physician-set plan, physician supervising, all conditions met | Physician NPI (incident-to) | 100% of PFS |
| PMHNP works in a location with no supervising physician present | PMHNP NPI (direct) | 85% of PFS |
Incident-to tends to pay off only when a physician is genuinely on site (or, for eligible services under the 2026 rule, virtually present), the patients are established with physician-set plans, and your documentation can prove it. If a physician is not reliably available, the compliance risk usually outweighs the 15%. Many psychiatric practices simply bill directly under the PMHNP’s NPI at 85% for cleaner compliance. Rates and percentages per 42 CFR 414.56.
The Downside
The Compliance Risk
Billing a service as incident-to at 100% when the conditions were not met means Medicare paid more than it should have. That is an overpayment subject to recoupment, and in cases involving knowing or reckless disregard it can implicate the False Claims Act. The most common failure points in psychiatry are billing a new problem as incident-to, billing when no physician was present or immediately available, and thin documentation that cannot show the physician-established plan of care or the supervision. Because state Medicaid programs and commercial payers set their own rules (some do not recognize incident-to at all), do not assume the Medicare framework carries over. Confirm each payer’s policy.
FAQ
Frequently Asked Questions
What is the difference in pay between incident-to and direct billing?
Under direct billing (PMHNP’s own NPI), Medicare pays 85% of the physician fee schedule per 42 CFR 414.56. Under incident-to (physician’s NPI, all conditions met), Medicare pays 100%. The difference is 15 percentage points on qualifying visits.
Can a PMHNP bill a new patient as incident-to?
No. Incident-to requires a physician-established plan of care and an existing problem. New patients, and new problems for established patients, must be billed under the PMHNP’s own NPI at 85%.
Does the physician have to be in the room?
Not in the room, but direct supervision has historically required the physician to be in the same office suite and immediately available. As of January 1, 2026, CMS permanently permits real-time audio/video presence to satisfy direct supervision for many services, with exceptions for certain higher-risk services. Confirm the current definition for your service.
Do Medicaid and commercial payers follow the same incident-to rules?
Not necessarily. State Medicaid programs and commercial insurers set their own policies, and some do not recognize incident-to billing at all. Rules vary by state and payer, so verify each one before billing.