Follow eligibility rules to ensure reimbursement


Medicare has very specific rules regarding how the supervision of diagnostic tests must be performed. To be eligible for payment, testing services in physician offices, independent diagnostic testing facilities, or provider-based entities must comply with the proper level of supervision. An overview of these rules includes the specifics for supervising and billing for services performed using physician extenders.

Medicare has very specific rules regarding how the supervision of diagnostic tests must be performed. To be eligible for payment, testing services in physician offices, independent diagnostic testing facilities, or provider-based entities must comply with the proper level of supervision. An overview of these rules includes the specifics for supervising and billing for services performed using physician extenders.

When diagnostic testing for a Medicare patient occurs in a physician office setting, independent diagnostic testing facility (IDTF), or provider-based entity, it must be performed under the general, direct, or personal supervision of that physician in accordance with the following definitions:

  • General supervision means that the procedure is furnished under the physician's overall direction and control, but the physician's presence is not required during the performance of the procedure. The training of nonphysician personnel who actually perform the diagnostic procedure and the maintenance of equipment and supplies are the continuing responsibility of the physician.

  • Direct supervision means that the physician must be physically present in the same office suite and immediately available to furnish assistance and direction throughout the performance of the procedure. The physician does not need to be present in the room where the procedure is performed.

  • Personal supervision indicates the physician must be in attendance in the room during the performance of the procedure.

These rules do not apply to services performed in a hospital setting unless the test is performed in a non-department-based, provider-based entity. All hospital services, except supervision and interpretation services and those procedures that must be personally performed by the physician in order to be paid, are subject to general supervision.

In the final 2007 Medicare Physician Fee Schedule rule, the Centers for Medicare and Medicaid Services dramatically expanded the scope and responsibilities of the physician vested with general supervision duties at an IDTF. The 2007 rules tasked the supervising physician with not only the responsibility for quality-related oversight, but also "the overall administration and operation of the IDTFs . . . and for assuring compliance with applicable regulations."

In response to concern-very loud and negative pushback-that CMS was granting supervising physicians management authority, CMS is backing away from that controversial language in its IDTF rules. The agency is sticking with its restriction, however, that physicians providing general supervision services may do so in only three IDTFs. It views general supervision to be so significant that it has specifically limited how many IDTFs any physician can assume general supervisory responsibility for.

The lesson from the CMS rules is that general supervision is a serious responsibility. Any radiologist who agrees to take on the medical director duties at an IDTF (or at a physician practice) by serving as the general supervising physician should visit the facility regularly, be involved in ongoing oversight of the technologists and at least have input into their ongoing performance evaluations, review reports of equipment calibration, and otherwise interact with the IDTF staff on matters relating to quality.

Because these responsibilities are viewed as so significant by CMS, any radiology group that agrees to perform general supervision of an IDTF or a physician's office should faithfully perform these services and should be paid fair market value for them.

Because only physicians can supervise tests, physician assistants (PAs), nurse practitioners (NPs), and radiologist assistants (RAs) cannot assume a supervisory role. PAs and NPs, however, generally unlike RAs and radiology practitioner assistants (RPAs), can be used by radiology groups in ways that permit their services to be billed under Medicare.

First, for some nonhospital settings, certain limited services of a physician extender (whether PA or RA) may be billed as "incident to" physician services, in which case the services are paid at 100% of the Medicare Physician Fee Schedule, as if the physician had performed the service. Second, the procedures may be billed under the PA or NP's license and are generally paid at 85% of the fee schedule amount in both hospital and nonhospital settings.


Services and supplies furnished incident to a physician's professional services by physician extenders in physicians' offices are paid by Medicare as if the physician actually performed the service. In general, to be covered as "incident to" the services of a physician, services and supplies must be an integral, if incidental, part of the physician's professional service, furnished under the physician's direct personal supervision, and furnished by the physician or an individual who qualifies as an employee of the physician.

There is no "incident to" billing permitted for hospital patients. Failure to understand that "incident to" services may not be performed in a hospital setting appears to be one of the biggest sources of improper billing by radiology groups that use physician extenders such as RAs or RPAs to perform services in hospitals.

Coverage of services and supplies incident to the professional services of a physician in private practice is limited to situations in which radiologists performed initial and ongoing services for the patient. The best example of such services is the radiology group that is providing office-based interventional radiology services.

Further, the physician must perform subsequent services at a frequency (e.g., one out of every three times) that reflects his or her active participation in and management of the course of treatment. The incident to service must be under the direct personal supervision of the radiologist. This supervisory obligation is identical to the rules for supervising certain diagnostic tests, such as MR or CT exams with contrast. Thus, the radiologist must be present in the office suite and immediately available to provide assistance and direction throughout the time the physician extender is performing services. Colloquially, this is sometimes referred to as being "within shouting distance," although availability of the physician by telephone does not count.

To be paid on an incident to basis, the nonphysician practitioner providing services must be considered an employee under the common law test. This person may be a part-time, full-time, or leased employee of the supervising physician, physician group practice, or the legal entity that employs the physician who provides direct personal supervision.


If payment as an incident to service is not available, it may be possible for a PA or NP to perform and bill for the services under his or her own statutory benefit. In general, to be covered by Medicare, the services must meet the following conditions:

  • The services would be covered as a physician service if they were furnished by a physician.

  • The nonphysician practitioner is legally authorized to perform the services in the state where performed.

  • The services are performed under the general supervision of the physician (the physician need not be physically present unless required by state law but must be immediately available for consultation).

  • The furnished services are billed by the nonphysician practitioner's employer. The nonphysician practitioner must reassign payment to his or her employer and complete form CMS-855R and must also enroll as an individual practitioner and have been assigned a National Provider Identifier.


Radiologists who take on supervision responsibilities at an IDTF or physician practice must respect the importance of this obligation. CMS clearly views the responsibility seriously. Radiologists should be careful to document their supervisory services. Most important, they should be paid.

Radiologists contemplating whether to employ a PA, RA, or some other type of physician extender must consider the fit of these services in their practice, as well as the ability to bill for the services. In the hospital setting, if the PA or NP has been appropriately credentialed and privileged, his or her services may be billed as PA or NP services at 85% of the fee schedule rate and the physician must provide the level of supervision required under state licensing laws, but the same is not true for the RA or RPA. RAs and RPAs have no independent authority to bill for their services. In the office setting, physicians can bill the services either as direct services paid at 85% of the MPFS amount or, under certain limited circumstances, as incident to services that are paid as if the physician had provided the service.

Mr. Greeson is a partner in the healthcare group of Reed Smith LLP in Falls Church, VA. He can be reached at 703/641-4242 or

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