In June 2026, Blue Cross Blue Shield of Michigan and Blue Care Network announced what may be the most disruptive billing policy change to hit Michigan's non-physician practitioner community in years. The announcement came through BCBSM's provider communications channels and was quickly flagged by MSMS, NASW-Michigan, and the Michigan Society of Medical Societies as a significant compliance event.
The change restructures incident-to billing for commercial plans in two phases. The first deadline - September 1, 2026 - is less than two months away. If your practice bills incident-to for BCBSM or BCN commercial members, you need to understand what changes and when before that date arrives.
What Incident-To Billing Is
Incident-to billing lets non-physician practitioners (NPPs) bill services under a supervising physician's NPI at the physician fee schedule rate - typically higher than the rate NPPs receive when billing under their own credentials. The model is common in multi-provider practices, particularly in behavioral health: a psychiatrist sees new patients, establishes a diagnosis and treatment plan, and then hands ongoing follow-up care to a nurse practitioner or PMHNP. Those follow-up visits are billed under the psychiatrist's NPI using incident-to rules.
In commercial payer contexts, incident-to arrangements let practices capture the physician rate even when the NPP is the provider physically delivering the care. That revenue differential is real, and practices have structured their billing models around it.
"The change is drawing strong pushback from mental health clinics who warn it will force care transfers from NPs back to psychiatrists - exacerbating shortages and reducing patient access."
BCBSM's stated rationale for the change is policy alignment: they want their commercial plan rules to match what Blue Care Network and Medicare Advantage already required - specifically, that students, trainees, and limited-license providers cannot bill incident-to. The change for fully licensed NPs and PMHNPs goes further, adding a financial disincentive for continuing to bill incident-to rather than enrolling individually.
The Two-Phase Timeline
What changes on September 1, 2026
- All incident-to claims filed with BCBSM and BCN must carry the SA modifier
- Incident-to claims become ineligible for value-based reimbursement (VBR), including Physician Group Incentive Program (PGIP) amounts
- To access VBR and PGIP incentives, rendering providers must bill directly under their own NPI
What changes on March 1, 2027
- Students, trainees, and limited-license behavioral health providers (LLMSWs, LLPCs, LLMFTs, temporary limited-license psychologists) may no longer bill incident-to in professional office settings - they must use facility-based settings
- Enrollment-eligible practitioners (fully licensed NPs, PMHNPs) who continue billing incident-to will be reimbursed at only 80% of the applicable rate with no VBR eligibility
- To avoid the 80% penalty, enrollment-eligible NPPs must individually credential and bill under their own NPI
Who Is Affected - and How
The impact splits sharply across two groups of non-physician practitioners. Understanding which group you fall into determines what you need to do and when.
Group 1: Enrollment-Eligible Practitioners (Fully Licensed NPs, PMHNPs, PAs)
If you hold a full license and are eligible to individually enroll with BCBSM or BCN, you are not banned from billing incident-to after March 2027. You are penalized for it. After March 1, 2027, continuing to bill incident-to while eligible for individual enrollment means your claims reimburse at 80% of the applicable rate with no VBR eligibility. Enrolling individually and billing under your own NPI avoids the penalty.
The financial math here is important to understand correctly. The 80% penalty applies to the applicable professional fee schedule rate - which may itself differ from the physician rate. The confirmed finding is that continuing incident-to billing post-March 2027 costs you 20% versus billing directly under your own NPI with BCBSM or BCN. That gap will compound across your entire commercial panel.
Group 2: Trainees and Limited-License Behavioral Health Providers
If you are a student, trainee, or limited-license behavioral health provider - including LLMSWs, LLPCs, LLMFTs, and temporary limited-license psychologists completing required post-graduate supervision hours - the March 2027 change is categorical, not a rate penalty. You will not be permitted to bill incident-to in professional office settings at all. The only path to reimbursement for your services will be through facility-based settings such as hospitals, outpatient psychiatric centers, or community mental health centers.
For Trainees and Limited-License Providers
BCBSM's primary source mentions that a private practice may qualify as an outpatient psychiatric center, which could provide a compliant path for some office-based settings. The accessibility and requirements of that reclassification for small independent practices are not yet fully documented. Watch for BCBSM provider bulletins between now and March 2027 for updated guidance on qualifying criteria.
The Revenue Impact
The VBR and PGIP disqualification starting September 1 is the most immediate financial hit. Practices that earn PGIP incentives through their BCBSM commercial plan patient base will lose that revenue on any incident-to claims filed after the Phase 1 date. For group practices with significant BCBSM commercial volume, that number can be meaningful.
After March 2027, the rate differential becomes the primary concern for fully licensed NPPs.
| Billing Scenario (post March 2027) | Reimbursement Rate | VBR Eligible | Action Required |
|---|---|---|---|
| NPP individually enrolled, billing under own NPI | 100% of NPP rate | Yes | Credential individually now |
| NPP eligible for enrollment, still billing incident-to | 80% of applicable rate | No | Enroll immediately to avoid penalty |
| Trainee/limited-license, office-based practice | Not reimbursable | No | Move to facility-based billing or qualify practice |
A PMHNP practice with 25 BCBS Michigan commercial patients billing incident-to after March 2027 would absorb a 20% haircut on every encounter versus the same practice where the PMHNP is individually credentialed. Across a year of follow-up visits, that gap compounds into a real revenue number that should be modeled now - not in February 2027.
What to Do - Before Each Deadline
The two-phase structure means you have two separate windows to act in. Missing the September deadline is already costly. Missing the March deadline is more so.
Before September 1, 2026
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1Add the SA modifier to all incident-to claims starting September 1. Any incident-to claim filed without the SA modifier after this date will be non-compliant with BCBSM and BCN billing requirements. Update your billing software and EHR templates before the date arrives.
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2Quantify your VBR and PGIP exposure. Pull your current PGIP and value-based incentive payments tied to BCBSM commercial plan patients. Any incidents-to claims from September forward forfeit that eligibility. Knowing the dollar amount helps your practice decide how urgently to accelerate individual NPP credentialing.
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3Start individual credentialing applications for all enrollment-eligible NPPs now. BCBSM's credentialing process runs 90-120 days minimum. If you start in July, approval may arrive before or shortly after September 1. That window gives you the option to begin billing directly under each NPP's NPI and preserve VBR eligibility from day one.
Before March 1, 2027
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4Complete individual enrollment for all fully licensed NPPs. If credentialing applications submitted now are approved, your NPPs will be individually enrolled by October or November 2026 - well before the March 2027 Phase 2 deadline. Do not wait until January 2027 to start this process.
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5Identify all trainees and limited-license providers in your practice and plan their billing transition. Assess whether your office-based practice qualifies as an outpatient psychiatric center under BCBSM's criteria, or whether those providers need to shift to a facility-based billing setting. This is a structural question that may require legal or compliance review.
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6Rebuild your revenue model. Reproject your BCBSM and BCN commercial plan revenue under the new billing structure: NPPs billing under their own NPI at the NPP rate, trainees only in compliant settings. Identify where the gaps are and whether cash-pay or other payer diversification can offset the structural change.
CAQH Before You Apply
Before submitting individual enrollment applications to BCBSM or BCN, confirm your CAQH ProView profile is fully attested and up to date. BCBSM pulls CAQH data as part of credentialing. An inactive or outdated profile adds 30-60 days to the approval clock. Log in to proview.caqh.org and attest if your last attestation was more than 90 days ago.
The Access Problem That Has Clinics Alarmed
This policy change is not landing quietly. MSMS, NASW-Michigan, and a growing number of Michigan behavioral health clinics are pushing back, and their concern is not primarily about billing mechanics.
Emily Williams, COO of Serenity Bay Health, put it directly: "With incident-to billing, clinics are going to be forced to transfer care from nurse practitioners to psychiatrists." The concern is structural. In Michigan's behavioral health system - and nationwide - psychiatrists primarily see new patients and establish treatment plans. Nurse practitioners and PMHNPs carry the follow-up caseload. The incident-to billing model supports that division of labor financially.
When that financial support is removed, practices face a choice: absorb the revenue cut, transfer patients back to psychiatrists who don't have capacity for them, or credential NPPs individually and manage the 90-120 day gap while that paperwork processes. None of those paths is clean. Psychiatry is already understaffed. Wait times in Michigan for a new psychiatric appointment can run two months or more. Forcing care back through psychiatrists creates a bottleneck that patients experience as reduced access.
Whether BCBSM responds to that advocacy with a delay, a carve-out, or a modified transition is an open question as of July 2026. MSMS has opened a feedback channel for member practices to submit impact reports. Watch for updated provider bulletins between now and September 1 - a separate BCBSM modifier-25 policy was postponed after announced, showing that delays are possible when the advocacy volume is sufficient.
Emmanuel AJAO
Emmanuel AJAO is the founder and Chief Editor of goCorporate™. He has guided hundreds of licensed clinicians through the process of launching independent practices - from entity formation and credentialing through to patient acquisition and post-launch optimisation.