Teaching physician billing rules for residents
Medicare pays for a service in which a resident took part only when the teaching physician was present for the key portion and the record shows it. 42 CFR 415.170 to 415.174 and chapter 12, section 100 of the Claims Processing Manual set what presence means for each type of service, and the claim carries modifier GC, or GE under the primary care exception.
Written by Salman Saeed, CEO and Co-Founder · Reviewed by a Certified Medical Coder · Last reviewed October 2026In short: Medicare pays the teaching physician under the physician fee schedule when that physician performed the service or was present for its key or critical portion, and the note says so. The primary care exception lets teaching physicians bill some lower and mid-level visits that residents furnish alone, reported with GE, and students never count.
What are the teaching physician billing rules?
Under 42 CFR 415.170, a service in a teaching setting is payable under the physician fee schedule if a physician who is not a resident personally furnished it, or if a resident furnished it in the presence of a teaching physician. The exceptions are in 415.172, 415.174 (certain centers), 415.176 (renal dialysis) and 415.184 (psychiatric services).
The resident's own work is paid separately: section 100.1 of chapter 12 says it is payable through direct graduate medical education payment or reasonable cost payment by the A/B MAC (A).
Section 100 of the manual defines the terms the rules turn on:
- Resident: a person in an approved graduate medical education (GME) program, including interns and fellows.
- Teaching physician: a physician, other than another resident, who involves residents in the care of his or her patients.
- Student: a person in an accredited program that is not an approved GME program. Medicare pays nothing for a student's service.
- Critical or key portion: the part of a service that the teaching physician determines is critical or key.
- Physically present: in the same room or partitioned area as the patient, or performing a face-to-face service.
What must the teaching physician do for each type of service?
It depends on the service. The default in 42 CFR 415.172(a) is presence during the key portion of any service for which payment is sought.
| Service | What the teaching physician must do | Source |
|---|---|---|
| E/M visit | Be present for the portion that determines the level billed, and take part in managing the patient | 415.172(a)(2); manual 100.1.1 A |
| Surgery and other complex or high-risk procedures | Be present for all critical and key portions and immediately available throughout. Presence is not required while opening and closing the surgical field | 415.172(a)(1); manual 100.1.2 |
| Endoscopy | Be present for the entire viewing, from insertion to removal. Watching a monitor in another room does not meet the rule | 415.172(a)(1)(ii); manual 100.1.2 A5 |
| Two overlapping surgeries | Be present for the key portions of both, which cannot overlap. Three concurrent cases are not payable | Manual 100.1.2 A2 |
| Anesthesia | Be present for all critical or key portions and immediately available. Report AA and GC | Manual 100.1.2 A4 |
| Interpretation of diagnostic tests | Perform it or personally review the image and the resident's reading. A countersignature alone does not qualify | Manual 100.1.2 A6 |
| Time-based services | Be present for the time claimed. Do not add time the resident spent without the teaching physician | Manual 100.1.4 |
Which time counts for time-based codes?
Only time the teaching physician was present. Section 100.1.4 applies this to critical care (99291 and 99292), hospital discharge day management (99238 and 99239), psychotherapy, prolonged services (99358 and 99359), care plan oversight (G0181 and G0182) and office or outpatient E/M visits whose level is chosen by total time.
For office and outpatient visits chosen by time, count only the teaching physician's qualifying activities, including time present while the resident performs them.
A resident spends 35 minutes with a patient. The teaching physician joins for 12 minutes of the counseling and later spends 8 minutes alone on orders and the note.
What must the teaching physician document?
Under 42 CFR 415.172(b), the record must document that the teaching physician was present when the service, including a Medicare telehealth service, was furnished. Section 100 adds that it must identify the service, the teaching physician's participation and whether the physician was physically present.
- Presence for E/M services can be shown by physician, resident or nurse notes (manual 100.1.1 A).
- A teaching physician macro counts only if added personally in a password-protected system, with patient-specific information from the resident or teaching physician. Macros alone from both are insufficient.
- A student may document, but the teaching physician must verify it and personally perform or re-perform the exam and medical decision making (100.1.1 B).
- Under 415.172(c), the payment level reflects the service as fully furnished by the teaching physician.
Wider signature questions are on our signature requirements page.
What is the primary care exception?
It lets teaching physicians in qualifying centers bill Medicare for certain lower and mid-level E/M visits that residents furnish without the teaching physician present. 42 CFR 415.174(a) sets the conditions and section 100.1.1 C of the manual lists the codes. The claim carries GE, and the center must attest in writing for each residency program that the conditions are met.
| Condition | What it requires | Source |
|---|---|---|
| Where | A hospital outpatient department or other ambulatory entity whose resident patient care time counts toward direct GME payment. Residents sent to a physician's office elsewhere or on home visits do not qualify | 415.174(a)(1); manual 100.1.1 C |
| Resident experience | The regulation says more than 6 months of an approved program; the manual says at least 6 months. For residents with less time, the teaching physician must be physically present for the key portions | 415.174(a)(2); manual 100.1.1 C |
| Ratio and availability | No more than four residents at any given time, with immediate availability and no other responsibilities, including supervision of other personnel | 415.174(a)(3) |
| Teaching physician duties | Take management responsibility, ensure the care is appropriate, and review history, exam, diagnosis and tests and therapies with each resident during or right after each visit | 415.174(a)(3) |
| Patients and services | An identifiable group who consider the center their continuing source of care, receiving acute, chronic, coordinated and comprehensive care | 415.174(a)(4), (a)(5) |
| Records | The note documents the extent of the teaching physician's participation in the review and direction of the service | 415.174(a)(6) |
The covered codes are 99202, 99203 and 99211 to 99213, plus G0402, G0438 and G0439. Since January 1, 2022, teaching physicians may use only medical decision making to choose the level of an office or outpatient visit under this exception. Prior approval is not required, but centers must keep records showing they qualify. Anything not on the list follows the general rule and carries GC.
Can the teaching physician be present virtually?
For Medicare telehealth services, yes. CMS's Telehealth FAQ, updated October 8, 2026, says that beginning January 1, 2026, the CY 2026 physician fee schedule final rule continues to allow teaching physicians to be virtually present in all teaching settings, but only for services furnished as a Medicare telehealth service. It covers the key portion, through real-time audio and video.
For services that are not telehealth, the regulation as published in the eCFR allows audio and video presence for the portion that determines the level of service only at residency training sites outside a metropolitan statistical area (42 CFR 415.172(a)(2)(i)). Those sites must also note which portions the teaching physician attended that way (415.172(b)(1)); use the same notation for any virtual presence.
Do the teaching physician rules apply to emergency medicine?
Yes, whenever a resident takes part in the care of a Medicare patient. An emergency department E/M visit such as 99285 needs the teaching physician present for the portion that determines the level billed (415.172(a)(2)). The primary care exception needs patients who consider the center their continuing source of care, which an emergency visit does not describe, so the general rule and GC apply.
Critical care is time-based, so only the teaching physician's own present time counts toward 99291 and 99292. See also hospitals and emergency medicine billing.
How does the claim show compliance, and what slows it down?
Services that meet the rules carry GC, and primary care exception services carry GE (section 100.1.8 B). Modifier detail is on the GC page. Section 100.1.8 A adds that the shared system suspends teaching physician claims for review, so a missing record or attestation slows payment.
Assistants at surgery follow a stricter rule. Section 100.1.7 says A/B MACs do not pay for one in a teaching hospital with a related training program when a qualified resident is available, unless an exception applies. The assistant certifies that none was available, or reports modifier 82. The MAC keeps the claim and certification for four years for post-payment review.
| Code | X12 description | Where to look |
|---|---|---|
| CO-4 | The procedure code is inconsistent with the modifier used | GC and GE together on one line, or GC with no payment modifier on anesthesia |
| CO-150 | Payer deems the information submitted does not support this level of service | Whether the note shows the teaching physician's own work, not only the resident's |
What if teaching physician claims were paid when they should not have been?
If a MAC denies a claim you believe met the rules, file a redetermination within 120 calendar days of receiving the notice (42 CFR 405.942(a)). A clerical error such as a missing modifier goes by reopening, within 1 year of the initial determination (405.980). The next levels are on Medicare appeal levels.
If your own review finds claims paid without the required presence or note, 42 CFR 401.305 requires reporting and returning the overpayment 60 days after it is identified, with a 6 year lookback. Our billing and coding audits test teaching claims against these rules.
- 42 CFR 415.170, Conditions for payment on a fee schedule basis in a teaching setting · eCFR
- 42 CFR 415.172, Physician fee schedule payment for services of teaching physicians · eCFR
- 42 CFR 415.174, Exception: Evaluation and management services furnished in certain centers · eCFR
- Medicare Claims Processing Manual, chapter 12, section 100 (teaching physician services) · CMS
- Telehealth FAQ, updated October 2026 · CMS
- 42 CFR 410.26, Services and supplies incident to a physician's professional services · eCFR
- 42 CFR 405.942, Time frame for filing a request for a redetermination · eCFR
- 42 CFR 405.980, Reopening of initial determinations · eCFR
- 42 CFR 401.305, Requirements for reporting and returning of overpayments · eCFR
- Claim adjustment reason codes · X12
We check every rule, code and deadline against the official source. See our editorial policy.
Common questions
Straight answers from the team that does the work.
Ask a billing lead directly. A 20-minute call, Monday to Friday, 9am to 5pm Eastern.
01What are the teaching physician billing rules?
Medicare pays under the physician fee schedule when the teaching physician personally furnished the service or was present for the key or critical portion when a resident did, under 42 CFR 415.170 and 415.172. The record must show it, and the claim carries GC or GE.
02When do I use modifier GC?
Use GC on each service a teaching physician bills when a resident took part and the presence rules in sections 100.1 through 100.1.6 of chapter 12 were met. Placing GC certifies compliance. Services under the primary care exception carry GE instead.
03What is the primary care exception?
It lets teaching physicians at qualifying outpatient centers bill lower and mid-level visits that residents provide without the teaching physician present. The center attests in writing, no more than four residents are supervised at once, and the claim carries GE.
04What must the teaching physician document?
The note must identify the service, the teaching physician's participation and whether the teaching physician was physically present, under 42 CFR 415.172(b). Presence can be shown by physician, resident or nurse notes. Macros alone, from both resident and teaching physician, are insufficient.
05Can residents' work be billed under the teaching physician?
Only when the teaching physician performed the service or was present for its key or critical portion, and documented it. The resident's own pay comes through graduate medical education funding. A student's work is never payable, though the teaching physician may verify the student's notes.
06Do teaching physician rules apply to emergency medicine?
Yes, when residents take part in a Medicare patient's care. The teaching physician must be present for the portion that determines the E/M level, and for critical care only the teaching physician's own present time counts. The primary care exception does not fit an emergency visit.
Teaching claims held for review?
We check presence statements, attestations and modifiers before submission and work the denials after.