What’s the Difference Between “In Office Ancillary” and “Incident To”?

Two similar and inter-related, but sometimes misunderstood, terms in healthcare law are “in office ancillary” and “incident to.” While both may apply to the same circumstances, they are distinct concepts and should be understood separately.

“In Office Ancillary” services are an exception to the Physician Self-Referral Law, often referred to as the Stark Law. The Stark Law prohibits “physicians” (generally including MDs, DOs, dentists, optometrists, and chiropractors) from referring patients to receive “designated health services” payable by Medicare or Medicaid from entities with which the physician or an immediate family member has a financial relationship, unless an exception applies. Generally, under the “in office ancillary” exception, the Stark law does not apply to services that (1) are performed by the referring physician, another physician in the same group practice, or an individual supervised by the referring physicians or another physician in the same group practice; (2) are performed in the same building as the referring physician or their group practice offers services or in another centralized location; and (3) are billed by the performing physician, the supervising physician, or their group practice.

On the other hand, “incident to” is a billing term. Services and supplies billed “incident to” a physician’s professional services are furnished by auxiliary personnel as an integral, although incidental, part of the physician’s personal professional services. Generally, services and supplies commonly furnished in physicians’ offices are covered under the “incident to” provisions. However, to bill services provided by auxiliary personal as “incident to” the physician’s services, among other requirements, the physician must directly supervise the auxiliary personnel. That is, the physician must be present in the same office suite and immediately available to provide assistance and direction while the auxiliary personnel is performing services.

For example, a physician could refer a patient for physical therapy services performed by a physical therapist who is employed by the physician’s group practice and who performs the services in the same office suite. If all requirements are met, the physician or her practice may be able to bill the PT service as “incident to” the physician’s services. Simultaneously, but under a separate analysis, the “in office ancillary” exception may allow payment for these services despite the Stark Law’s prohibition on self-referrals, assuming all the criteria of the exception are met. This is an over-simplified example, and an experienced healthcare attorney can help your practice navigate this analysis.

For over 35 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding billing and payment arrangements. If you or your healthcare entity has any questions pertaining to healthcare compliance, please contact an experienced healthcare attorney  at 248-544-0888 or wapc@wachler.com