Article originally published through the American Association of Provider Compensation Professionals (AAPCP).
Introduction
Healthcare practices increasingly employ teams of non-physician practitioners (NPPs) (such as nurse practitioners, physician assistants) to extend capacity, improve access, and deliver team-based care for their patients. In this article we will discuss Medicare Program payment provisions, the impact of reimbursement, and ultimately the value of practice and professional revenue from those services.
Two (2) billing & coding constructs—’incident to’ and split / shared (a.k.a. shared service) visits are key tools for practices to leverage NPPs to capture optimal reimbursement and increase a physician’s productivity. However, they involve complex regulatory, financial, and valuation implications. Let us review the requirements to better understand these provisions and potential impact on compensation models so when structuring those agreements, decisions can be made to most fairly allocate credit for the physician’s involvement efforts and oversight.
Regulatory & Billing Requirements for ‘Incident To’ & Split / Shared Services
‘Incident to’ services are governed by Medicare regulatory requirements and payment policies that outline the allowance for NPPs or ancillary clinical staff to provide certain services under the supervising physician’s National Provider Identifier (NPI) number for a higher level of reimbursement[1]. Services rendered appropriately under the ‘incident to’ payment provision receive 100% of the Physician Fee Schedule (PFS) when rendered within the provisions and rules are met, versus the 85% reimbursement when the NPP bills independently under their NPI to Medicare.
The physician must have initiated the patient’s care plan, continue active oversight, be present in the office suite and the service must be part of a plan previously established by the physician. If properly done, ‘incident to’ billing allows the practice to bill at 100% of the PFS rate.
Split / shared service payment provision applies in facility settings, such as hospitals and skilled nursing facilities, for evaluation & management (E/M) visits furnished jointly by a physician and a NPP when, and only when, they are part of the same group, representing a cost to the practice for the time and services the NPP renders. That provider (physician or NPP) may bill for the visit depending on who did the ‘substantive’ portion. Beginning January 1, 2024, the definition of substantiative was revised to clarify that, “…substantive portion means more than half of the total time spent by the physician and NPP performing the split (or shared) visit, OR a substantive part of the medical decision making (MDM) as defined in the CPT E/M Guidelines (see 2024 CPT Codebook).”[2]
It is important to understand that ‘incident to’ is a concept that CANNOT be followed in facility settings. Split / shared is the mechanism in a facility setting, and has different rules and restrictions on the types of services that can be billed under the provision. Practices must also track who did what in documentation: time spent, MDM components, and who signs and dates the record.
Impact of Billing Under Supervising Physician’s NPI: Revenue & Productivity Metrics
Reimbursement differences: As mentioned previously, for ‘incident to’, billing under the physician’s NPI yields full PFS rate. If a NPP bills independently, Medicare reimburses at 85% of PFS for those services. That difference materially affects revenue and physician productivity, since the full amount of the physician’s time or efforts are not required, and that time involvement does vary based upon the provision.
Practice metrics & productivity: When services are billed under the physician’s NPI ‘incident to’ or under physician NPI via split / shared, physician productivity (often measured in Relative Value Units (RVUs), visits, or revenue attributed to physician) can increase, even though part of the work was done by NPPs. This has implications for compensation models, workload and compensation fairness.
Documentation burden & risk: Because CMS now requires clear tracking of time or MDM efforts to identify who provided the substantive portion, practices must invest in documenting workflows, splitting time, and distinguishing tasks. Without good documentation, risk of audit or claim denials increases.
Approaches to Allocating Work RVUs (wRVUs) & Revenue Credit for NPP Services
In designing compensation and valuation models, practices commonly use a few approaches:
- Full credit to supervising physician: Under ‘incident to’, practice attribution often gives the physician full credit for work done by NPPs (wRVUs). This is simple but may under-recognize contributions of NPPs or distort relative productivity across physicians supervising differing numbers of NPPs.
- Shared credit / split attribution: Some practices allocate a proportion of wRVUs or revenue to NPPs and supervising physicians based on measured time or case mix. For example, a percentage of revenue from ‘incident to’ or split / shared visits could be allocated to the NPP who did the bulk of face-to-face care or follow-up, while the physician gets oversight credit, risk responsibility, plus some portion of revenue.
- Blended or “team-based” compensation pools: Under this model, the practice pools revenue from physician + NPP services (including ‘incident to’ or split/shared) and divides across team members based on agreed metrics, combining RVUs, patient satisfaction, quality measures.
- Stipends or per diem oversight payments: In some settings, particularly for “doctor of the day” oversight roles, supervising physicians receive a fixed stipend rather than incremental credits. This is simpler in accounting but may under-incentivize active supervision or involvement if not structured well.
Financial & Operational Implications: Supervising Physician vs Per Diem Stipends
Financial: If physician oversight is credited via stipend in some form, the practice can control costs, however, and may end up paying more if oversight requirements demand more involvement than stipend compensation considers. On the other hand, giving supervising physician full credit (wRVU) for the services not personally rendered raises physician productivity metrics, potentially increasing compensation obligations.
Operational: Oversight requirements (presence, involvement in MDM, reviewing notes, etc.) take physicians’ time. This time is not “free” and must be valued. If oversight roles are undervalued, physician burnout, over or under compensation and / or compliance risks increase.
When valuing a practice, billing mix (proportion of ‘incident to’ vs split / shared vs independent NPP billing), oversight burdens and attribution of wRVUs all matter. ‘Incident to’ claims can be identified when the billing and rendering providers are different. Split / shared visits can be identified by the use of modifier “FS”, a modifier required by Medicare to indicate even though the claims is submitted under one practitioner’s NPI, two practitioners performed the visit.[3] It is also important to point out that while the modifier has been in place for these services since January 2022, not all payors may require or recognize the same indicator or even allow this provision. It is important to mention, since the modifier FS is available, practices should consider its consistent use to identify those shared services to appropriately assign the correct credit ratio for compensation, productivity and supervision services.
If the modifier is not used for all split / shared as required, most billing will capture billing and rendering (or service) providers to help locate those services involving the NPP. The modifier and different rendering provider fields will only identify NPP involvement, so further consideration for items like infusions, injections, some diagnostics, etc. may not be as evident in the billing data. Be sure you have a clear way to identify the volumes impacted by all services paid to the provider under these provisions. It is also important to remember, these services are a Medicare concept, and while many other payors have similar allowances, not all have the same restrictive rules.
In the end, buyers will be looking for accurate, compliant and sustainable documentation practices, consistent allocation models and risk exposure (e.g., states or payers with these, other or even stricter rules, including acceptable performance on any third-party chart to payment audits).
Compliance & Valuation Considerations in Structuring Compensation Arrangements
Ensure that ‘incident to’ and split / shared billing meet all explicit Medicare or other applicable payer rules: supervising physician credentials, location, oversight, documentation of substantive portion and time tracking. Violations may lead to recoupments, penalties and will have a direct impact on the practice’s valuation.
Supervising physician contributions (mentorship, risk management, quality oversight) are less visible in wRVUs but add value. Compensation design (stipend, bonus, revenue share) should reflect these. If some physicians supervise many NPPs (thus generating many ‘incident to’ or split / shared visits), they may appear more productive. Compensation and incentives must balance this to avoid unfairly advantaging those with larger teams.
How Compensation Design Can Incentivize Supervision, Optimize Team-Based Care & Avoid Distortions
- Transparent attribution rules: Define clearly in the practice how wRVUs, visit counts, and revenue credit are allocated for ‘incident to’ and split / shared visits. For example: who logs time, how MDM is evaluated and how oversight is documented.
- Incentive components: Include oversight or supervision bonus, not just direct clinical work. For example, a physician might get a base wRVU target plus bonus for effectively supervising NPPs (quality, patient satisfaction, compliance).
- Avoid perverse incentives: If physicians are rewarded purely for “credited” wRVUs under ‘incident to’ and supervision is minimal, quality or oversight may suffer. Alternatively, if oversight is too burdensome with little compensation, physicians may resist or under-supervise, risking compliance.
- Use of per-diem oversight in certain settings: Where settings demand physician being “doctor of the day”, a stipend per diem might work; but ensure it accounts for expected time involvement, adjusts for caseloads, and is transparent in valuation.
- Measure quality and risk, not just volume: Credentialed NPP contributions should be evaluated for good patient and practice efficiency outcomes; supervision should be tied to quality metrics. This helps confirm wRVU credit aligns with safe, high-quality care, not just quantity of services reported.
Conclusion
From an accounting and valuation perspective, the way a practice handles ‘incident to’ and split / shared billing has real effects on revenue, wRVU attribution, provider compensation, compliance risk and ultimately, the practice’s value. Properly structured compensation models that recognize physician oversight, fairly credit NPPs, enforce strong documentation, and align with regulatory changes will help practices avoid distortions in productivity metrics, reduce audit risk and foster team-based care.
Additional References & Sources:
- CMS, Evaluation and Management Services, https://www.cms.gov/files/document/mln006764-evaluation-management-services.pdf.
- CMS, “Updates for Split or Shared Evaluation & Management Visits,” MLN Matters Number MM13592 (effective Jan. 1, 2024).
- The Perceived Impact of the New Medicare Rules for Split/Shared Visits: A Survey of Advanced Practice Administrators, https://pmc.ncbi.nlm.nih.gov/articles/PMC10287091/
- American Academy of Family Physicians, “Incident-to and Shared Services: Demystifying Billing for Care Provided by Multiple Professionals” by Betsy Nicoletti, Fam. Pract. Manag., 2024.
- ModMed, “Incident-To Billing: Navigating Medicare and Commercial Payer Guidelines,” Jan. 31, 2025, blog entry.
- CMS, Final Rule on Split / Shared Visits (CY 2024 MPFS) and associated official regulatory clarifications from both CMS and various Medicare Administrative Contractors.
[1] CMS Medicare Claims Processing Manual- 100-04.30.6.4 – Evaluation and Management (E/M) Services Furnished Incident to Physician’s Service by Nonphysician Practitioners https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c12.pdf
[2] CMS Medicare Claims Processing Manual- 100-04.30.6.18: Split (or Shared) visits: https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c12.pdf
[3] CMS, “Evaluation and Management Services,” MLN Booklet Number MLN006764 September 2025, page 21.
