Medicare NP billing is relatively standardized because it’s governed by federal rules and national fee schedules. Commercial payer rules are not: they vary by insurer, product line (commercial vs exchange vs Medicare Advantage), state, and contract terms. In our billing experience with NP practices, most payment delays happen when a Medicare assumption is carried into a commercial workflow (or vice versa).
The “big picture” difference: standardization vs variability
Medicare Part B follows a consistent national framework for NP enrollment, coverage, and payment under the Physician Fee Schedule (PFS). Commercial payers publish reimbursement policies, but those policies often defer to your specific contract, plan type, and even payer edits that are not obvious until claims start being denied.
Medicare Part B rules for NP billing (what’s reliably true)
Medicare rules are the closest thing you get to “one rulebook.” That doesn’t mean they’re simple—just more consistent.
Enrollment and who can bill
An NP generally bills Medicare under their own NPI once they are properly enrolled and eligible for the service within state scope and Medicare coverage rules. CMS treats NPs as Advanced Practice Registered Nurses (APRNs) under the Medicare payment framework. CMS
How Medicare pays NPs
Medicare payment for NP services is commonly tied to 85% of the Physician Fee Schedule amount, and Medicare then applies the usual Part B payment mechanics (allowed amount, coinsurance, etc.). Some Medicare contractor (MAC) guidance spells out the 85% relationship explicitly when describing how payment is calculated for NPs and similar practitioners. Medicare
“Incident-to” under Medicare (where practices get in trouble)
Medicare’s “incident-to” rules are often misunderstood. Two critical Medicare realities that show up operationally:
- Only the supervising physician (or other eligible supervising practitioner, per Medicare rules) bills incident-to.
- Direct supervision requirements and documentation expectations are strict, and CMS (and MACs) will scrutinize them. CMS Incident to Services
CMS also clarifies that NPs (and other listed practitioners) can supervise “incident-to” services and supplies provided by auxiliary personnel under certain conditions—another nuance that matters in team-based outpatient workflows.
Operational consequence: Medicare incident-to can create a 100% physician-rate payment pathway only if all requirements are met, and MAC guidance is often more specific than people expect about when an NPP visit must be billed under the NPP’s NPI (for example, established patient with a new problem).
CY 2026 Medicare Physician Fee Schedule context
CMS publishes annual updates to the Physician Fee Schedule and related Part B billing policies, effective January 1 each year. For 2026, CMS posted the CY 2026 PFS final rule materials and summaries (important because “what Medicare expects” can shift at the margins year to year). CMS
Commercial payer rules (what’s not reliably portable from Medicare)
Commercial payers are the land of “it depends,” and not in a philosophical way—more in a “your claim will be denied” way.
1) Credentialing and “must bill under your own NPI.”
Commercial payers increasingly push toward credentialed APPs billing under their own NPIs. A recent example: Blue Cross NC announced a change requiring eligible mid-level providers to be credentialed and bill under their own NPI for certain lines of business (with stated exceptions such as Medicare Advantage in that update).
Other Blues plans and regional carriers publish credentialing/reimbursement eligibility language for APPs (often emphasizing that credentialing/contracting criteria must be met to be eligible for reimbursement). ProvComm
Operational consequence: “We’re credentialed as a group” is frequently not enough. Commercial payers may accept a claim initially and later recoup if the rendering/billing alignment isn’t what their policy/contract requires.
2) Reimbursement levels: Many commercial payers default to ~85% unless contracted otherwise
Some major payer policies explicitly describe APP reimbursement as a percentage of the physician fee schedule unless a contract states otherwise. UnitedHealthcare’s commercial reimbursement policy for Advanced Practice Providers, for example, describes reimbursement at 85% of the applicable physician fee schedule unless otherwise contracted.
Operational consequence: Two practices can submit the same NP E/M code and see different allowed amounts based on contract configuration—even under the same insurer.
3) Commercial “incident-to” is not Medicare “incident-to.”
This is the #1 Medicare-to-commercial translation error.
Some commercial payers explicitly state they do not follow CMS incident-to reimbursement rules and apply their own payment logic. Anthem Blue Cross (example policy document) states it does not follow CMS incident-to rules and describes its own reimbursement approach for incident-to billing (including an allowance reduction). www.anthembluecross.com
Blue Cross NC’s update also signals a directional move toward “bill under the APP’s own NPI,” which reduces or eliminates the practical usefulness of incident-to under many commercial products.
UnitedHealthcare has also had policy shifts and clarifications around incident-to recognition in commercial contexts (including limiting recognition and tying it to Medicare-like guidelines in specific situations).
Operational consequence: A workflow that is compliant under Medicare incident-to may still be non-payable or underpaid under commercial plans.
4) SA modifier and “supervising physician billing” models (payer-specific)
Some commercial payer policies describe the use of modifier SA for services performed by an APP and submitted by a supervising physician on the physician’s claim, with reimbursement tied to a percentage of the supervising physician’s fee schedule. Cigna’s Advanced Practice Providers policy (example PDF) describes this approach and ties eligible SA-submitted services to 85% (or other allowed amount) of the supervising physician’s fee schedule. metrocarephysicians.com
Operational consequence: If your EHR and clearinghouse rules don’t consistently populate rendering vs billing provider fields (and modifier logic), you can create systematic underpayment without obvious denials.
Side-by-side comparison: Medicare vs Commercial payer realities for NP billing
| Topic | Medicare Part B (general rule pattern) | Commercial payers (common pattern) |
|---|---|---|
| Rule source | CMS + annual PFS updates | Payer reimbursement policy + your contract |
| NP payment level | Often tied to 85% of PFS mechanics | Often 85% unless contracted otherwise (varies) |
| Incident-to | Defined and enforceable; strict requirements | May not follow CMS rules; may reduce payment or restrict |
| “Must bill under own NPI” trend | Not universal; depends on billing method | Increasingly common, especially in newer policies/updates |
| Modifier logic | More standardized (but still audited) | Payer-specific (e.g., SA approaches) |
| Practical risk | Compliance/audit if incident-to misapplied | Denial, underpayment, or recoupment due to policy variance |
Sources include CMS policy pages and payer reimbursement policy documents.
A common scenario we see in NP practices
A small NP-owned primary care clinic bills Medicare incident-to correctly for a subset of established patient follow-ups (documented physician involvement, direct supervision requirements met, clean audit trail). The clinic then uses the same approach for a commercial payer.
Result: commercial claims pay at a reduced amount (or are denied), because the plan’s reimbursement policy does not follow CMS incident-to rules and applies its own allowance logic, or requires the NP to bill under their own NPI. The clinic assumes it’s a coding error, but it’s actually a payer-policy mismatch. www.anthembluecross.com
A practical process to prevent Medicare vs. commercial NP billing mistakes
- Identify payer + product line for each claim.
- Commercial, exchange, Medicare Advantage, and traditional Medicare can behave differently even under the same brand. CMA Docs
- Confirm NP credentialing/enrollment status per payer.
- Don’t assume group participation equals individual eligibility. Use payer portals and credentialing confirmations. ProvComm
- Decide billing pathway by payer (NP NPI vs supervising physician NPI)
- Medicare incident-to is not a default; commercial incident-to may be restricted or reduced.
- Lockdown modifier rules per payer.
- Especially when policies reference SA or payer-specific APP reimbursement rules.
- Configure EHR/clearinghouse fields to match the pathway
- Rendering provider, billing provider, and supervising provider fields must align with the chosen pathway.
- Audit payments, not just denials
- Commercial payers often underpay “successfully adjudicated” claims when the APP pathway differs from expectations.
A neutral internal-link note: some practices maintain a payer-by-payer NP billing workflow reference (including enrollment and modifier rules) as part of their NP billing services documentation to reduce preventable denials.
What NPs should realistically expect (so you don’t plan on wishful thinking)
- Medicare tends to be more predictable once enrollment and documentation standards are stable, but it is less forgiving in audits.
- Commercial payers tend to be less predictable because policies vary and contracts override general guidance, so you must validate rules payer-by-payer.
- “Incident-to” is a major divergence point: commercial payers may reduce, restrict, or reject workflows that are fully Medicare-compliant.
FAQ Section
How does Medicare NP billing differ from commercial payer billing?
Medicare NP billing follows nationally standardized CMS rules, while commercial payer billing varies by insurer, plan type, and contract. Commercial payers often apply different credentialing, reimbursement, and modifier requirements.
Does Medicare reimburse nurse practitioners differently than commercial insurers?
Yes. Medicare typically reimburses nurse practitioners at about 85% of the physician fee schedule when billing under the NP’s NPI. Commercial payers may reimburse at parity, at reduced rates, or according to specific contract terms.
Is incident-to billing allowed for NPs under Medicare and commercial plans?
Medicare allows incident-to billing only when strict supervision and documentation rules are met. Many commercial payers do not follow Medicare incident-to rules and may restrict or reduce payment for those services.
Do commercial payers require NPs to bill under their own NPI?
Many commercial payers increasingly require credentialed nurse practitioners to bill under their own NPI. Group credentialing alone may not be sufficient for reimbursement.
Why do NP claims pay under Medicare but deny under commercial insurance?
This often happens because commercial payers apply different rules for enrollment, modifiers, supervision, or reimbursement than Medicare, even when the same CPT code is used.
Are NP reimbursement rates the same across all commercial payers?
No. Commercial NP reimbursement varies widely based on the payer, plan type, and negotiated contract. Two insurers may reimburse the same NP service at very different rates.
What is the biggest billing risk when mixing Medicare and commercial NP claims?
The biggest risk is assuming Medicare rules apply universally. Applying Medicare billing logic—especially incident-to billing—to commercial claims frequently results in underpayments or denials.
