A family medicine practice agrees to host residents from the hospital across town. Two second-year residents come in three half-days a week and see patients on the attending's schedule. Six months later the billing manager notices that Medicare claims for those sessions look exactly like every other claim in the practice. No modifiers. No attestation in the notes. The attending was in the building, mostly, and sometimes in the room.
That is a problem, because teaching physician billing rules are not a hospital concern that stays at the hospital. They follow the resident. The moment a resident in an approved graduate medical education program participates in a Medicare patient's visit, the claim for that visit is governed by 42 CFR 415.172 and the Medicare Claims Processing Manual, Chapter 12, section 100, and a plain office visit claim without the right documentation is an overpayment waiting for an audit. This article covers what they require in a private practice, where there is no compliance office down the hall.
Two definitions. A teaching physician is a physician, other than a resident, who involves residents in the care of their patients. A resident is a physician in an approved graduate medical education (GME) program, including interns and fellows. Medicare already pays the hospital for the resident's training through direct and indirect GME payments, so it pays the practice only when the teaching physician's own involvement meets the rules.
Key takeaways
- Medicare pays the teaching physician for a visit involving a resident only if the teaching physician was present for the key or critical portion and personally documented that participation.
- Modifier GC goes on every service a resident performed in part under the teaching physician's direction; GE is reserved for the primary care exception.
- The primary care exception (42 CFR 415.174) allows residents with more than six months of training to see lower-level visits alone, with the teaching physician supervising no more than four residents and immediately available.
- When time is used to pick the E/M level, only the teaching physician's time counts; under the primary care exception the level must be based on medical decision making.
- Since January 1, 2026, the CY 2026 Physician Fee Schedule final rule permanently allows the teaching physician to be present virtually, but only when the service itself is furnished virtually.
The presence requirement: what "key portion" means
The general rule is straightforward. For the teaching physician to bill a service that a resident participated in, the teaching physician must be physically present during the key or critical portion of the service, or perform the service personally. For an office visit, the key portion is in practice the part where the diagnosis is confirmed and the plan is made: the teaching physician sees the patient, confirms or expands the history and exam, and directs management. Reviewing the resident's note afterward and cosigning it does not count. Being in the next room does not count under the general rule.
Procedures are stricter: for minor procedures of five minutes or less the teaching physician must be present for the entire procedure, and for longer ones present for the key portions and immediately available for the rest. A joint injection or skin biopsy done by a resident needs the attending in the room.
The practical test we give practices: if a Medicare auditor read this note without knowing which name was on the claim, could they tell that the attending saw the patient and made the decisions?
Modifiers GC and GE
Modifier GC means the service was performed in part by a resident under the direction of a teaching physician. It goes on every claim line where a resident participated and the presence rule was met; it does not change payment. It tells the Medicare Administrative Contractor that the claim is a teaching physician claim.
Modifier GE means the service was performed by a resident without the presence of a teaching physician under the primary care exception. It applies only in a setting that qualifies for the exception, only to the services the exception covers, and only when the exception's conditions were met that day. A GE claim for a 99214 is wrong by definition, because 99214 is not on the list.
| Situation in the office | Billable to Medicare? | Modifier | Documentation that must be in the note |
|---|---|---|---|
| Resident sees the patient; teaching physician then sees the patient, confirms findings and sets the plan | Yes, at the level the combined documentation supports | GC | Teaching physician's own statement of presence and participation, referencing the resident's note |
| Resident sees the patient alone; teaching physician reviews and cosigns later; not a primary care exception setting | No | None | Not billable regardless of documentation |
| Resident with 8 months of training sees an established patient alone for a 99213-level visit in a qualifying center; teaching physician supervising three residents, immediately available, reviews the case that session | Yes | GE | Teaching physician's statement of review and direction; level chosen by MDM |
| Same as above, but the visit meets 99214 | Not under the exception | None, unless the teaching physician sees the patient (then GC) | Teaching physician must be present for the key portion to bill 99214 |
| Telehealth visit; resident and patient on video; teaching physician joins the video for the key portion | Yes, from January 1, 2026 permanently | GC | Teaching physician documents virtual presence for the key portion |
The primary care exception in a private practice
The exception at 42 CFR 415.174 was written for residency continuity clinics, but a private practice site can qualify if it is a location where residents provide care under the approved program and the conditions are met. The conditions are specific. The resident must have completed more than six months of an approved residency program. The teaching physician may not direct the care of more than four residents at any given time. The teaching physician must be immediately available, must have no other responsibilities during that time, must assume management responsibility for the patients the residents see, must review the care with the resident during or immediately after the visit, and must document the extent of their participation.
The services covered are the lower and mid-level office visits: new patient codes 99202 and 99203, established patient codes 99211, 99212 and 99213, the Welcome to Medicare visit G0402 and the annual wellness visits G0438 and G0439, plus certain Medicare preventive G codes CMS has added by manual instruction. Anything above those levels, and any procedure, requires the teaching physician's presence under the general rule.
One rule trips practices that adopted the 2021 office visit guidelines: under the exception, the E/M level must be selected by medical decision making. Time cannot be used, because the teaching physician was not present and the resident's time does not count. On any teaching physician claim leveled by time, only the teaching physician's own time counts.
Honestly, most small practices hosting one or two residents a few sessions a week should not try to use the exception. The four-resident supervision cap is not the constraint; the "no other responsibilities" condition is. An attending seeing their own 20 patients while residents see another 12 down the hall does not qualify. The exception pays off in a dedicated teaching session where the attending precepts and does not carry a schedule.
Documentation the teaching physician must write
The teaching physician must personally document their participation. The note may refer to the resident's note for history, exam and findings, and the combined entry supports the level, but the attending's own words must establish that they saw the patient and what they did. Since January 1, 2020 (the CY 2020 Physician Fee Schedule final rule), the teaching physician may review and verify documentation entered by the resident or students rather than re-document it.
Three attestations, weakest to strongest. "Seen and agree" alone does not establish presence. "I saw and evaluated the patient and agree with the resident's findings and plan" is the minimum under the general rule. "I saw and examined the patient with the resident. Blood pressure remains above goal on two agents; I discussed adding chlorthalidone 12.5 mg and the patient agreed. I agree with the resident's note" is what we want, because it shows participation in decision making, not attendance.
For a GE visit the attestation is different in kind: "Primary care exception. I reviewed this visit with Dr. Resident immediately after the encounter, including the assessment and plan, and agree with the management as documented. I was immediately available and supervising no more than four residents." Dated and signed, that is the evidence the exception requires.
Teaching physician billing rules for Medicaid and commercial payers
The practice bills Medicare under the teaching physician's NPI, with GC or GE as appropriate, and is paid the physician fee schedule amount. The resident is not paid by the practice for patient care and cannot bill Medicare for services within the scope of the program; the hospital's GME payments cover that. A fully licensed resident who moonlights in the practice outside the program's scope is treated as a physician for those services and must be enrolled with payers first, with a written agreement with the program.
Medicaid and commercial payers are not bound by the Medicare manual. Many state Medicaid programs adopt the Medicare teaching physician rules by reference; many commercial contracts say nothing and pay the claim under the attending's NPI as long as the attending is the rendering provider on the claim. Check the state Medicaid provider manual and the largest commercial contracts before the first resident starts. Our credentialing team confirms enrollment for any moonlighting resident before a claim goes out.
What changed on January 1, 2026
During the COVID-19 public health emergency, CMS allowed teaching physicians to satisfy the presence requirement through real-time audio and video technology. In the CY 2026 Physician Fee Schedule final rule, released October 31, 2025 and effective January 1, 2026, CMS made virtual presence permanent in all teaching settings, but only in the clinical situation where the service itself is furnished virtually: the resident and patient are on a telehealth visit and the teaching physician joins the video for the key portion. For an in-person visit, the teaching physician must still be physically present. The same rule also made virtual direct supervision permanent for many incident-to services; that is a separate policy and should not be confused with this one.
Questions we hear
The attending was in the office all day. Isn't that "present"?
Not for a GC claim. Physical presence means in the room with the patient for the key portion. Being in the building is immediate availability, which is a condition of the primary care exception, not of the general rule.
Can we bill the resident's visit under the attending as incident-to?
No. Incident-to rules apply to auxiliary personnel furnishing services integral to the physician's service; a resident's professional service is not incident-to anything, and the teaching physician rules govern it.
We only have residents two sessions a week. Is any of this worth the effort?
Yes, because the alternative is billing those sessions wrong. The simplest compliant approach for a small practice is to skip the primary care exception entirely, have the attending see every Medicare patient the resident sees, write a real attestation, and put GC on every line.
What to do this week
- Pull every claim from the last 12 months for dates when a resident was in the practice and check for modifier GC or GE; the ones without either are your review sample.
- Read the notes for 20 of those visits and score each against the presence and attestation standards above; cosign-only notes go to counsel for a refund decision.
- Decide whether your site will use the primary care exception at all, and if so, which sessions qualify and who the supervising teaching physician is for each.
- Build two attestation templates (general rule and primary care exception) into the EHR as smart phrases the attending must complete, not auto-populate.
- Confirm with the residency program that your location is on its approved site list and file the affiliation agreement.
- Add a claim edit that flags any Medicare E/M on a resident session day without GC or GE.
