Medicare’s Primary Care Exception

Title: Medicare’s Primary Care Exception
Standard #:


Issued: 08/21/2000 Reviewed/Revision Date: 10/06/2009, 06/21/2012, 07/01/2012, 12/09/2014


Teaching Physician – A physician (other than another resident) who involves residents in the care of his or her patients

Resident – An individual who participates in an approved graduate medical education (GME) program or a physician who is not in an approved GME program but who is authorized to practice only in a hospital setting.  The term includes interns and fellows in GME programs recognized as approved for purposes of direct GME payments made by the Fiscal Intermediary.  Receiving a staff or faculty appointment or participating in a fellowship does not by itself alter the status of “resident”.  Additionally, this status remains unaffected regardless of whether a hospital includes the physician in its full time equivalency count of residents

Physically Present – The teaching physician is located in the same room (or partitioned or curtained area, if the room is subdivided to accommodate multiple patients) as the patient and/or performs a face-to-face service.


Medicare has allowed a “Primary Care Exception” for outpatient service that lessens restrictions on physical presence requirements of teaching physicians.

When specific conditions are met, Medicare will pay for the three lowest levels of outpatient Evaluation and Management (E/M) services without the presence of a Teaching Physician.

New Patient Established Patient
99201 99211
99202 99212
99203 99213

The Healthcare Common Procedure Coding System (HCPCS) codes included under the primary care exception are:

G0402 Initial preventive physical examination; face-to-face services limited to new beneficiary during first 12 months of enrollment (effective January 1, 2005)
G0438 Annual wellness visit, including personal preventive plan service, first visit (effective January 1, 2011)
G0439 Annual wellness visit, including personal preventive plan service, subsequent visit (effective January 1, 2011)

A primary care center must attest in writing to Medicare that all of the following conditions are met for a particular residency program for the exception to apply:

  1. Furnished services must be provided in a center located in the outpatient department of a hospital or another ambulatory care entity. This requirement is not met when the resident is assigned to a physician’s office away from the primacy care center or makes home visits, unless it meets the requirements of a written agreement between the hospital and the entity.  This must be verified with the Office of Culture, Ethics and Compliance.
  2. Any Resident furnishing billed services without a Teaching Physician present must have completed more than 6 months of an approved residency program.
  3. Teaching Physicians who submit claims under the exception must not supervise more than four residents at any given time and must direct the care from such proximity as to constitute immediate availability. The Teaching Physician must:
    • Have no other responsibilities including the supervision or other personal at the time was furnished by the resident;
    • Have primary medical responsibility for patients care for by the residents;
    • Ensure that the care furnished is reasonable and necessary;
    • Review the care furnished by residents during or immediately after each E/M service, this must include a review of the patient’s medical history and diagnosis, the residents findings on physical examination and treatment plan (e.g., record of test and therapies); and
    • Document the extent of their participation in the review and direction of services provided to patients.
  4. Patients should consider the primary care center to be their primary location for health care services. Residents are expected to generally furnish care to the same group of established patients during their residency training. The range of services provided by Residents include:
    • Acute care for undifferentiated problems or chronic care for ongoing conditions including chronic mental illness;
    • Coordination of care furnished by other physicians and providers
    • Comprehensive care not limited by organ system or diagnosis.

If any other service than those listed above (99201-99213, G0402, G0348-G0349) is furnished, then the appropriate Medicare teaching physician policy should be followed.

The above information does not apply to other payers, including Medi-Cal, that require a higher standard of care. (e.g. all patients must be personally seen by attending physician in order to bill a professional fee).

Clinical departments which qualify for and intend to utilize Medicare’s Primary Care exception must send a copy of the attestation provided to Medicare to the USC Office of Culture, Ethics and Compliance.


Medicare Claims Processing Manual, 100-04, Ch. 12, 100 Teaching Services

Centers for Medicare and Medicaid (CMS)


Questions regarding policies, procedures or interpretations should be directed to the USC Office of Culture, Ethics and Compliance at (323) 442-8588 or USC Report & Response at (213) 740-2500 or (800) 348-7454.