OIG Report on Non-Physicians Performing Medicare Physician Services

Download the full OIG Report, HERE. (PDF Format, 40 pgs, 1,070 KB)

The following is directly quoted from the report:



For days that Medicare allows more than 24 hours of services billed by a single physician:

  1. Identify the services physicians bill to Medicare but do not perform personally.
  2. Assess the qualifications of nonphysicians who perform these services.


Medicare Part B pays for services that are billed by physicians but are performed by nonphysicians. These services often are called “incident to” services, or services provided under the “incident to” rule. “Incident to” services may be vulnerable to overutilization and may put beneficiaries at risk of receiving services that do not meet professionally recognized standards of care. Little is known about Medicare services performed “incident to” the professional services of a physician.

Using Part B Medicare National Claims History data for the first quarter of 2007, we identified all days during which Medicare allowed services for physicians in a single day that exceeded 24 hours of physician worktime. We randomly selected 250 of these “physician-day” combinations and requested that the physicians identify who performed each service that Medicare allowed on the selected day(s). We asked the physicians to submit all relevant credentials for the nonphysicians they identified. Our contractor’s nurse-reviewers determined whether the nonphysicians were qualified to render the particular services. In making these determinations, the nurse-reviewers considered any relevant Medicare requirements, State laws and regulations, and the nurses’ own professional judgment as to whether the particular service generally falls within the standard competencies of the particular type of nonphysician provider who rendered the service.


When Medicare allowed physicians more than 24 hours of services in a day, half of the services were not performed personally by a physician. In the first quarter of 2007, physicians who were allowed services that exceeded 24 hours of physician worktime in a day personally performed approximately half of these services. Nonphysicians performed the remaining services, which physicians may have billed as “incident to” services. Medicare allowed $105 million for approximately 934,000 services that the physicians personally performed and approximately $85 million for approximately 990,000 services that nonphysicians personally performed during this 3-month period.

Nonphysicians performed almost two-thirds of the invasive services that Medicare allowed the physicians. An invasive procedure involves entry into the living body (as by incision or by insertion of an instrument). Nonphysicians performed almost half of the noninvasive services that Medicare allowed the physicians.

Unqualified nonphysicians performed 21 percent of the services that physicians did not perform personally. In the first 3 months of 2007, Medicare allowed $12.6 million for approximately 210,000 services performed by unqualified nonphysicians. These nonphysicians did not possess the necessary licenses or certifications, had no verifiable credentials, or lacked the training to perform the service. Nonphysicians with inappropriate qualifications performed 7 percent of the invasive services that physicians did not perform.


Services performed by unqualified nonphysicians represent a risk to Medicare beneficiaries. State laws that require training, certification, and licensure of nonphysicians help to ensure that patients receive safe and quality care. However, among the physicians who billed Medicare for more than 24 hours of services in a day, nonphysicians performed half of the services billed, and unqualified nonphysicians performed one in every five services not performed by a physician. These nonphysicians were not practicing pursuant to State laws, State regulations, or Medicare regulations; had no verifiable credentials; and/or had not received the appropriate training to perform the services (according to our reviewers’ professional judgment).

We are concerned about the potential scale of this problem. We cannot report the extent to which all physicians who bill Medicare bill for services performed by unqualified nonphysicians because our sample included only those physicians who billed for more than 24 hours of services in a day. The sample was a proxy for physicians who billed “incident to.” Medicare claims data do not identify “incident to” services as such. However, we have no reason to believe that the issues identified in this review are unique to these physicians. For example, physicians who bill Medicare for fewer than 24 hours of services in a day might also bill for “incident to” services performed by unqualified nonphysicians. Although our sample represents relatively few physicians (3,165 of the 805,401 physicians who billed Medicare in the first 3 months of 2007), the potential exists that this problem is more widespread than we can report at this time.

Therefore, we recommend that the Centers for Medicare & Medicaid Services (CMS):

  1. Seek revisions to the “incident to” rule. The rule should require that physicians who do not personally perform the services they bill to Medicare ensure that no persons except:
    • licensed physicians personally perform the services or
    • nonphysicians who have the necessary training, certification, and/or licensure, pursuant to State laws, State regulations, and Medicare regulations personally perform the services under the direct supervision of a licensed physician.
  2. Require physicians who bill services to Medicare that they do not personally perform to identify the services on their Medicare claims by using a service code modifier. The modifier would allow CMS to monitor claims to ensure that physicians are billing for services performed by nonphysicians with appropriate qualifications.
  3. Take appropriate action to address the claims for services that we detected that:
    • were billed by physicians and performed by nonphysicians that were, by definition, not “incident to” services and
    • were for rehabilitation therapy services performed by nonphysicians who did not have the training of a therapist.


CMS concurred with two of our three recommendations. CMS did not concur with our recommendation to create a service code modifier to identify physicians’ claims for services that physicians do not personally perform. CMS stated that “incidental services are often shared by physicians and staff, making definition of a service not ‘personally performed’ operationally difficult.” However, CMS stated it agrees with our “underlying objective of increasing the available data on services provided “incident to.”

We continue to believe that CMS should have the ability to identify and monitor physicians’ claims for services that physicians bill, but do not personally perform. This review identified unqualified nonphysicians who furnished services to Medicare beneficiaries. We believe that the lack of a service code modifier to identify physicians’ “incident to” claims represents a significant vulnerability to the Medicare program. CMS stated it would study the operational issues involved in implementing the recommendation. We look forward to learning the specific steps CMS plans to take with respect to this issue.

CMS provided technical comments in addition to its response to our recommendations. If appropriate, we incorporated the technical comments into the final report.

Download the full OIG Report, HERE. (PDF Format, 40 pgs, 1,070 KB)


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