Blue Cross Blue Shield of Michigan to overhaul incident-to billing, with new limits on value-based pay

Blue Cross Blue Shield of Michigan and Blue Care Network are reworking how they reimburse incident-to services under their commercial plans, a change that will reshape billing for supervised clinicians across the state and phase in over the coming months.

The first requirements take effect Sept. 1, 2026, with a second, more consequential set of rules following March 1, 2027. The insurer says the overhaul is meant to improve transparency, sharpen identification of the clinicians who actually deliver services and bring reimbursement in line with each practitioner's licensure and participation status.

Incident-to billing lets services performed by one health care professional be billed under the National Provider Identifier (NPI) of a supervising physician or non-physician practitioner and reimbursed at the supervisor's rate.

Practices have long leaned on the arrangement for clinicians who hold a lower level of licensure or are not yet enrolled with the payer, particularly in behavioral health and team-based primary care.

What changes, and when

Beginning Sept. 1, clinicians who are eligible to enroll directly with Blue Cross or Blue Care Network but continue to bill incident-to must append modifier SA to their claims. Those claims will still be paid at the submitting clinician's applicable rate during the transition, but they will no longer qualify for value-based reimbursement, including incentives under the Physician Group Incentive Program (PGIP).

The bigger shift arrives March 1, 2027. From that date, clinicians eligible for direct participation must submit claims under their own NPI. Anyone who keeps billing incident-to under the limited transition circumstances the payer allows will be reimbursed at 80% of the professional fee schedule and will remain shut out of value-based reimbursement.

The most significant change targets clinicians still in training. After March 1, 2027, students, trainees, physicians in graduate medical education programs, limited licensed social workers, limited licensed professional counselors, limited licensed marriage and family therapists, temporary limited licensed psychologists and similar practitioner types will no longer be eligible for incident-to reimbursement in professional office settings. They may continue to deliver incident-to services only in facility-based settings.

The payer's case

Blue Cross frames the changes as a way to strengthen quality measurement, care coordination and accountability, while opening quality-incentive programs to clinicians who enroll directly. The insurer also points to potential upside for nurse practitioners and physician assistants, who may become eligible for value-based reimbursement once they enroll on their own and join PGIP.

Where the concerns lie

Health care organizations and clinician groups have flagged practical risks.

Behavioral health clinicians have been most vocal, warning that the policy could disrupt a workforce pipeline built around limited-license professionals who practice under supervision while logging the clinical hours required for full licensure.

Counseling, psychology, marriage and family therapy and social work all rely on that supervised period, and practices worry that curbing reimbursement in office settings will shrink employment, training capacity and the future supply of clinicians.

A recent media report cited behavioral health professionals who cautioned that the change could squeeze practices financially, leading to fewer available appointments, longer waits and reduced access in communities that already face shortages.

Independent physician practices face their own transition burden. Many operate with thin administrative resources and will need time to model the financial impact, redesign billing and care-delivery workflows, enroll clinicians, update compliance procedures and rework budgets, all while absorbing workforce shortages, rising costs and continued reimbursement pressure.

In multidisciplinary primary care, where physicians work alongside nurse practitioners, physician assistants, behavioral health clinicians and care managers, some physician leaders question whether the timeline leaves enough room to assess the effects on practice sustainability and patient access before the rules land.

Who is exempt

Not every clinician or service is swept in. Blue Cross has said several practitioner types that cannot participate directly may keep billing incident-to indefinitely, among them registered nurses, dietitians, physical therapy assistants, occupational therapy assistants, behavioral health technologists who provide applied behavior analysis services, community health workers and peer support specialists.

A range of services and settings is also excluded, including anesthesia, dental, laboratory, pharmacy and urgent care services; Provider Delivered Care Management; team-based care programs; facility-based professional services such as outpatient psychiatric centers; and ambulance and emergency medical technician services delivered under supervision.

Preparing for the deadlines

The rollout is phased. Between Sept. 1, 2026, and Feb. 28, 2027, clinicians eligible for direct enrollment can keep billing incident-to with modifier SA while they prepare to bill directly, and Blue Cross is urging those who have not yet enrolled to do so before March 1, 2027. Limited exceptions remain for clinicians moving from another state to Michigan licensure or changing participating practices, who may bill incident-to for up to 90 days while they complete the switch. The payer has published a frequently asked questions document detailing the timeline, billing requirements and available exceptions.

The Michigan State Medical Society (MSMS) is collecting feedback from physicians and practice leaders on the operational, financial and patient-care concerns they expect.