By John Fisher, JD, CHC, CCEP

Dermatology Billing Risk — Incident-to Supervision and Impossibly Long Days

Executive Summary

This compliance brief summarizes a dermatology enforcement matter involving alleged improper “incident to” billing, failure to supervise services, and billing patterns reflecting implausible workdays. The matter resulted in a $302,000 payment and a mandatory Corporate Integrity Agreement in July 2016.

Case Overview

The government alleged that the dermatologist repeatedly billed services under the “incident to” billing rules during periods when the dermatologist was not physically present in the office. Some services were allegedly performed while the physician was traveling outside the country. The government also alleged that the physician billed for services on days that appeared impossible based on the number of hours submitted, including one day on which 26 hours of services were billed.

Compliance Risk Areas

• Improper “incident to” billing: Billing services under a physician when supervision requirements are not met may create false claims exposure.
• Failure to supervise: A physician must be physically present in the office suite when required for services billed as “incident to.”
• Impossibly long days: Billing patterns that reflect more hours than could reasonably be worked in a day are a significant audit and enforcement red flag.
• Documentation and operational controls: Practices must maintain records that support physician presence, supervision, and the reasonableness of billed services.

Applicable Compliance Requirement

The “incident to” billing rules permit services performed by a physician extender to be billed under the supervising physician only when specific requirements are satisfied. To qualify, the physician must be physically present within the office suite at the time the extender performs the service. A physician may not order a procedure and then leave the office while the procedure is being performed. Revised Medicare rules further clarify that only the physician who actually supervises the extender may bill the service as “incident to” his or her own service. The ordering physician may bill the service only if he or she also provides the required supervision.

Key takeaway: Incident-to billing requires contemporaneous physician supervision, supported by operational records and billing controls that make physician presence, extender services, and daily claim volume auditable.

Recommended Controls

• Implement a process to verify physician presence before billing services as “incident to.”
• Maintain schedules, travel records, and supervision documentation that support billed services.
• Conduct periodic billing audits to identify unusually high daily service volumes or implausible total hours.
• Train physicians, extenders, billing staff, and compliance personnel on supervision requirements and documentation expectations.
• Escalate and investigate billing anomalies promptly, including claims that suggest impossibly long workdays.