Incident-To Billing for Orthopaedic Practices: The 2026 Rules for PA and NP Visits

Incident-to billing lets an orthopaedic practice bill a PA or NP office visit under the supervising physician's NPI and collect 100 percent of the Medicare Physician Fee Schedule amount, instead of the 85 percent paid when the visit is billed under the advanced practice provider's own NPI. To qualify, the physician must have personally performed the initial service, established the plan of care the APP is following, remain actively involved in the course of treatment, and provide direct supervision during the visit. The two rules orthopaedic groups break most often are the same two every year: billing a new patient or an established patient with a new problem as incident-to, and applying split/shared logic to an office visit where it does not belong. Both are worth roughly 15 percent of the visit, and both are visible to an auditor who never leaves their desk.

That 15 percent is not the reason to care about this in 2026. The reason to care is that the HHS Office of Inspector General opened a national audit of incident-to billing on November 15, 2024 (Work Plan item OAS-25-01-003), it is still listed as active, and no report has issued yet. When it does, the practices that will have a problem are the ones that treated incident-to as a default billing preference rather than a documented workflow.

What incident-to actually requires

The rule lives in 42 CFR 410.26, with the operative guidance in the Medicare Benefit Policy Manual (Pub. 100-02), Chapter 15, section 60, and the Medicare Claims Processing Manual (Pub. 100-04), Chapter 12, section 30.6. Four conditions have to hold at the same time.

‍The physician performed the initial service. CMS describes the incident-to service as an integral part of the patient's normal treatment where the physician personally performed an initial service and remains actively involved in the course of treatment. A new patient seen only by a PA is not incident-to. Ever.

‍There is an established plan of care and the APP is following it. This is the condition that fails most often in orthopaedics, because orthopaedic patients change. A patient the surgeon evaluated for right knee osteoarthritis, who returns to the PA with new left shoulder pain, is presenting a new problem. The shoulder complaint is outside the established plan of care, so that visit is billed under the APP's NPI at 85 percent, even though the patient is established to the practice.

‍The physician provides direct supervision. Historically this meant present in the office suite and immediately available to furnish assistance and direction. That standard changed in 2026, and the change is genuinely useful to orthopaedic groups. See the next section.

‍The service is billed under the supervising physician. Payment is then 100 percent of the fee schedule. Billed under the APP's own NPI, payment is 85 percent, set by regulation at 42 CFR 414.52 for physician assistants and 42 CFR 414.56 for nurse practitioners and clinical nurse specialists.

What changed in 2026: virtual direct supervision became permanent

The CY2026 Medicare Physician Fee Schedule final rule (CMS-1832-F) permanently allows the immediate availability element of direct supervision to be satisfied through real time audio and visual interactive telecommunications, excluding audio only, effective January 1, 2026. The change is codified at 42 CFR 410.26.

For an orthopaedic group this matters more than it does for most specialties, because the supervising physician is frequently in an operating room across town while the APP clinic runs. Under the 2026 rule, a surgeon who is genuinely available by real time video can satisfy supervision for qualifying office services without being physically down the hall.

There is an important carve out. Services with global surgery indicators of 010 or 090 are excluded and still require in person supervision. Orthopaedics is dense with 010 and 090 global codes, so this exclusion reaches a meaningful share of what happens in an orthopaedic office. Fracture care, injections with global periods, and post operative visits inside a global period need to be evaluated individually rather than swept into a blanket virtual supervision policy.

One caution worth stating plainly: the CMS fact sheet references virtual direct supervision in the context of diagnostic tests and pulmonary and cardiac rehabilitation, while the broader reading covering incident-to services under 410.26 comes from MAC guidance and legal analysis. Before you rewrite your supervision policy, have someone read the Federal Register text rather than a summary.

Split/shared visits are a facility rule, and the office is not a facility

This is the single most common structural error we see in orthopaedic billing, and it is not subtle. Split or shared visit billing applies in institutional settings only. CMS states it directly in its MLN guidance: office visits and nursing facility visits are not billable as split or shared services.

The reason is mechanical. Split/shared exists for settings where incident-to billing is prohibited, which is why the two policies never overlap. In your office, incident-to governs. In the hospital, split/shared governs. If your billing team is applying substantive portion logic to a clinic visit, they are applying a rule that does not exist in that setting, and the resulting claim is wrong regardless of how well the note is documented.

When split/shared does apply, modifier FS is required on the claim.

Substantive portion means time or medical decision making, not time alone

There is a large amount of stale guidance circulating on this point, because CMS proposed a time only standard and then abandoned it.

The history is worth knowing so you can recognize outdated advice. In the CY2022 final rule, CMS established that the substantive portion would be defined as more than half of the total time spent, but permitted history, exam, medical decision making, or more than half the total time for 2022. In the CY2023 final rule, CMS finalized a year long delay of that policy. The CY2024 proposed rule extended the delay again. Then, in the CY2024 final rule, CMS dropped the time only definition entirely and aligned with CPT.

What is in force now, and unchanged for 2026, comes from CMS Transmittal 12604 and lives in Claims Processing Manual Chapter 12, section 30.6.18: substantive portion means more than half of the total time spent by the physician and the APP performing the split or shared visit, or a substantive part of the medical decision making. Either basis works. The exception is critical care and prolonged services, where substantive portion still means more than half the total time.

One counting rule that trips people up: when both practitioners are in the room together, only one practitioner's time counts toward the total. Joint time is not double counted.

Neither the CY2026 final rule nor the CY2027 proposed rule changes any of this. If your compliance policy still says "more than half the total time," it is enforcing a standard CMS withdrew.

The economics changed in 2026, and they favor the office

Two structural changes in the CY2026 fee schedule matter more to an orthopaedic group's APP strategy than the conversion factor does.

For the first time there are two conversion factors: $33.5675 for qualifying APM participants and $33.4009 for non qualifying participants, up from $32.35 in 2025. The CY2027 proposed rule projects both falling, to $33.17 and $32.84 respectively, as the temporary 2.50 percent increase expires.

More consequentially, CMS applied a 2.5 percent efficiency adjustment to work RVUs and intra service physician time for existing non time based services. That means procedures. Time based services, including E/M, are exempt. CMS also finalized recognition of greater indirect costs for office based practitioners than facility based ones. The AMA's analysis of the final rule puts the practice expense effect at roughly negative 7 percent for facility performed services and positive 4 percent for non facility services.

Read together: the surgical side of an orthopaedic practice absorbed a cut, and the office visit side, which is where APPs generate most of their volume, was spared and then advantaged. That strengthens the case for a well run APP clinic. It also raises the stakes on getting the billing designation right, because more of the practice's margin now runs through exactly the visits where the incident-to question lives.

What we know about how much of this is happening

MedPAC's analysis of 2016 Medicare data found that over 40 percent of nurse practitioners' E/M office visits for established patients performed in physician offices were likely billed incident-to, and roughly 30 percent for physician assistants. That is the share of APP visits billed incident-to, not the APP share of all visits, and it is now a decade old. MedPAC's standing recommendation, issued in February 2019, is that Congress require APRNs and PAs to bill Medicare directly, eliminating incident-to billing altogether, on the grounds that it undermines accurate valuation of physician services and constrains policymakers' ability to evaluate cost and quality.

On the staffing side, an MGMA Stat poll from November 2025 (n=305, all specialties) found 48 percent of groups added more APPs relative to physicians during 2025, 40 percent held their ratios steady, and 11 percent shifted back toward physicians. APP volume is going up. The billing exposure scales with it.

We were not able to find a current, authoritative figure for the share of orthopaedic office visits delivered by APPs specifically. If a vendor quotes you one, ask for the source.

A practical control set for orthopaedic groups

Five controls catch most of the exposure.

‍Flag new problems at scheduling, not at billing. The established plan of care test fails at the front desk, where a patient books with a PA for a complaint the surgeon has never evaluated. If your scheduling template cannot distinguish a follow up on an existing problem from a new complaint, your incident-to determination is being made by whoever answers the phone.

‍Name the supervising physician on the claim and in the note. Auditors match them. If the note is silent on who was supervising, the claim is asserting something the record does not support.

‍Separate your office and facility policies explicitly. One page, two columns, no overlap: office equals incident-to, facility equals split/shared with modifier FS. This single document prevents the most common structural error.

‍Decide your 010 and 090 global position before you rely on virtual supervision. Build the exclusion into the rule engine rather than into a training slide.

‍Audit the 85 percent claims, not just the 100 percent ones. Practices reflexively audit for overpayment risk. The mirror error, billing under the APP at 85 percent when the visit genuinely met every incident-to requirement, is pure lost revenue and nobody ever gets a letter about it.

Where the coding layer fits

Every control above is a determination made at the moment of coding, from information that already exists in the chart: whether the problem is new, whether a physician documented a plan of care for it, who supervised, what the place of service was, and whether the code carries a 010 or 090 global. That is exactly the kind of judgment that gets made inconsistently when a busy coder is working a queue, and consistently when the rules are evaluated on every chart before a human sees it.

Maia's AutoCoder reads the note in the EHR and surfaces these determinations alongside the recommended codes and modifiers, so the incident-to versus APP billing decision is made on the record rather than by habit. For groups like OrthoIndy and Midwest Orthopaedics at Rush, where APP clinics run at volume across multiple sites, the value is less about any single claim and more about the fact that the same rule gets applied the same way every time.

Frequently asked questions

Can a PA see a new patient and bill incident-to under the physician?‍

No. Incident-to requires that the physician personally performed the initial service and established the plan of care. A new patient visit performed by a PA is billed under the PA's own NPI at 85 percent of the fee schedule. This applies whether or not the physician is in the office and whether or not the physician later reviews the note.

‍An established patient sees our PA for a brand new complaint. Is that incident-to?‍

No. The established plan of care must cover the problem being treated. A new problem in an established patient falls outside the existing plan, so the visit is billed under the APP. The patient's status is established, but the problem is not.

‍Does the 2026 virtual supervision rule mean the physician never has to be in the building?‍

Not for everything. The CY2026 final rule permanently permits the immediate availability element of direct supervision to be met by real time audio and video, but services with 010 or 090 global surgery indicators are excluded and still require in person supervision. In an orthopaedic practice, that exclusion covers a substantial share of procedural work.

‍Is the substantive portion of a split/shared visit still based on time?‍

It is based on more than half the total time or a substantive part of the medical decision making, per CMS Transmittal 12604. CMS proposed a time only standard for 2022, delayed it twice, and abandoned it in the CY2024 final rule. Critical care and prolonged services remain time only. And split/shared does not apply in the office at all.

‍What is the actual payment difference between incident-to and APP billing?‍

Fifteen percent. Incident-to services billed under the supervising physician pay at 100 percent of the Physician Fee Schedule amount. Services billed under a PA's or NP's own NPI pay at 85 percent, per 42 CFR 414.52 and 414.56.

‍Are incident-to claims currently being audited?‍

Yes. OIG Work Plan item OAS-25-01-003, "Medicare Part B Payments for Incident To Services," was announced November 15, 2024 and remains active. Its stated objective is to determine whether Part B payments for incident-to services complied with Medicare requirements. No findings have been published yet.

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