NP and PA billing is one of the most misunderstood areas in medical billing, and one of the most audited. The rules around incident-to billing, split-shared visits, and supervision have all shifted in recent years. Here's where things stand in 2026. The dollars add up quickly: even a modest error rate here means avoidable revenue loss every year.
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This is the fundamental decision point. When an NP or PA provides a service, you can bill it under the provider's own NPI (at 85% of the physician fee schedule for Medicare), or potentially under the supervising physician's NPI as an incident-to service (at 100%). The difference is real money, 15% more per claim under incident-to.
But incident-to billing has strict requirements. Not every NP/PA service qualifies. Getting this wrong is one of the most common compliance problems in primary care practices.
You can't bill incident-to for new patients; the physician must see new patients first to establish the relationship and create the initial plan of care. This trips up a lot of practices that have NPs seeing new patients as a matter of workflow. If your NP is handling all new patient intakes, those claims have to be billed under the NP's NPI at 85%.
CMS implemented split-shared billing rules in 2022 that changed how practices bill visits where both a physician and an NP/PA see the patient. The substantive portion rule means the visit bills under whoever provides the substantive part of the E&M service.
For 2026, the determination of "substantive portion" for visits other than critical care is based on time or the key components of the visit (history, exam, medical decision making). If the physician documents and provides the key clinical work, billing under the physician is appropriate. If the PA does the bulk of the work, the claim goes out under the PA.
Medicare distinguishes between direct supervision (physician in the office suite), general supervision (physician available but not necessarily in the office), and personal supervision (physician present in the room). The level required depends on the type of service and setting. Most E&M services for NPs require at least general supervision, but incident-to requires direct.
State scope-of-practice laws add another layer. Some states allow NPs to practice independently without physician supervision; others require collaborative agreements. Your billing practices should align with both Medicare requirements and state law; they don't always say the same thing.
The telehealth flexibilities that expanded during COVID have been extended through 2026 for some services. NPs and PAs can bill telehealth visits under their own NPI in most circumstances. The incident-to rules generally don't apply in the telehealth context the same way they do in-person, which simplifies some things but eliminates the 100% billing option.
Commercial payers don't always follow Medicare's incident-to rules. Some commercial plans require NPs and PAs to be separately credentialed and will only reimburse under the provider's own NPI. If your NPs aren't credentialed with commercial payers, those claims may be denied or bundled into the practice's global billing without the payer even knowing the service was provided by a mid-level.
Check each of your major commercial payer contracts for their APP billing requirements. It's often different from Medicare, and the reimbursement rates may actually be the same as the physician rate, making the incident-to issue less financially relevant for commercial business.
Reviewers of NP and PA claims ask one question: does the claim show the person who actually did the work? A visit billed under the physician's NPI has to meet incident-to requirements, or the claim is at risk. A visit that was shared has to follow the split-shared rules, and the physician's portion has to be documented as the substantive part if the visit bills under the physician. Contractors can look back three years, and on a practice with a recurring pattern here, that lookback can put a large recoupment at stake, before the cost of the appeal.
Supervision levels add another test, since the level required depends on the service. Contractors can review three years of claims, and because the difference between 85 and 100 percent of the fee schedule is built into every claim, a pattern of billing under the physician when the rules weren't met produces a repayment that grows with volume. Sample your own NP and PA claims each quarter against the requirements.
The cleanest way to handle NP and PA billing is to decide the rule for each type of visit in advance. Write a short policy: which visits are billed under the NP or PA's own NPI, which qualify as incident-to, which are split/shared, and which need the physician to see the patient first. Then build it into scheduling so that the right provider sees the right patient.
When a new patient asks for an NP, for example, the scheduling rule should already say what happens. A rule the front desk can follow without a phone call to billing prevents most of the errors in this area.
For incident-to and split/shared services, the record has to show what the physician did. Add a field to your template for the physician's involvement, so that it's a prompt to fill in and not a memory test. For incident-to, note the physician's initial plan of care and ongoing participation. For split/shared, note each provider's portion and time.
Keep a supervision log for the times the physician isn't in the office suite. If a service requires direct supervision, the log shows who was there. It's boring paperwork until a reviewer asks for it.
Commercial payers vary on whether they'll pay for NP and PA services under a physician's NPI. The safest approach is to credential each NP and PA with every payer that will accept them, and bill under their own NPI where the payer requires it. Track credentialing status for every provider and every payer in one place, and don't schedule a provider for a payer they aren't enrolled with.
Commercial payers change their rules for NPs and PAs, so review each major payer's policy twice a year and update your billing rules if anything changed.
85 percent of the physician fee schedule, according to the article. Billing under the physician's NPI at 100 percent is only allowed when the incident-to requirements are met.
No. The article says the physician must see new patients first to establish the relationship and the initial plan of care. Many practices trip on this when NPs fill new-patient appointments.
Not always. The article says some require NPs and PAs to be credentialed separately and only pay under the provider's own NPI, so credential your NPs and PAs with each payer.
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