“Incident to” vs. Locum Tenen Billing – Unleashing the Differences for Accurate Billing

A locum tenens is a Latin term meaning “to hold the place of” or “to substitute for.” In the healthcare industry, this term is used to describe a physician, nurse practitioner, or physician assistant who temporarily works in an area where there is a workforce shortage.

Locum tenens providers play an important role in filling gaps in healthcare staffing. They often work in underserved or rural areas, or they may be requested to provide coverage during peak periods or in the event of an emergency. But many times patients are concerned if locum tenen billing will be covered by insurance providers.

In addition, hospitals and medical practices have used locum tenens physicians to solve a variety of staffing problems. One of the biggest benefits of using locum tenens physicians is that they can be hired on a short-term basis to fill in for a specific need. Keep reading to know more about locum tenen billing and how the process works.

How Can a Practice Bill for a Locum Tenens?

In the event that the practice is unable to secure a provider for an extended period of time, they may seek to hire a locum tenens. A locum tenens is a licensed provider who agrees to temporarily work in practice in order to maintain patient care. While a locum tenens can be a great solution for practices in need, there are some important things to keep in mind before billing for their services.

For a practice to bill for a locum tenens, the provider must be licensed in the state where the practice is located. The locum tenens must also meet all of the other requirements that the practice has for their providers, such as being credentialed and having the necessary malpractice insurance. In addition, the locum tenens must be working under a signed agreement with the practice.

What are Some Limitations for Locum Tenens?

There are several disadvantages and potential legal implications associated with the use of locum tenens physicians. First, locum tenens assignments are often last-minute, which can make it difficult to find quality candidates. Additionally, because locum tenens physicians are not employees of the hospital, they may not be familiar with the hospital’s policies and procedures. This can lead to errors and medical mistakes. Finally, if a locum tenens physician is not properly credentialed, the hospital may be liable for any negligence on the part of the physician.

How to Bill for the Locum Tenens?

In order to bill the substitute physician for their services, you will need to include the following information:

  • The name of the substitute physician
  • The date of service
  • The type of service provided
  • The name of the facility where the service was provided
  • The name of the primary physician

This information will be used to generate a unique identifier for the substitution, which will be used to submit the claim to the payer under the primary provider rendered services. The provider will add the Q6 identifier to code the services and diagnosis performed by the substitute provider in the form CMS-1500 in Box 24. But this can be done when the locum tenens are hired for less than 60 days. It also needs to understand that locum tenens or substitute providers cannot directly bill their services to CMS.

Hiring Locum Tenens for 60 Days or More

Locum tenens cannot be hired for more than sixty days. If the primary physician or the healthcare provider at a practice cannot return to the care, then it is suggested to make arrangements before taking leave from work.

As locum tenens cannot bill for themselves, that means they are not credentialed to the third-party insurance providers or with CMS. For this, you need to wait for the required tenen to get credentialed with your insurance network or with CMS and hire on your place to perform service in your absence.

Planning prior to your long absence will ensure that there would be no laps in your practice billing. Also, if the primary care provider returns to work even for a day, the same substitute can be hired for a new session of 60 days and be billed under the NPI number and form with the same quantifier Q6.

Billing Policies assigned by CMS for Locum Tenens

Billing Policies assigned by CMS for Locum Tenens

The Centers for Medicare and Medicaid have regulated a brief policy regarding locum tenens billing which states;

  • “[Part B or the Medicare Administrative Contractor (MAC)] may pay the patient’s regular physician for services of a locum tenens [a.k.a. substitute] physician during the absence of the regular physician where the regular physician [or CHC] pays the locum tenens on a per diem or similar fee-for-time basis…”
  • “The substitute physician generally has no practice of his/her own and moves from area to area as needed.”
  • “The substitute physician does not provide the visit services to Medicare patients over a continuous period of longer than 60 days…”
  • “The regular physician identifies the services as substitute physician services meeting the requirements of this section by entering HCPCS code modifier Q6.”

The policy explicitly applies to Medicare part B payments and will be applied with the providers’ NPI.

What is “Incident to” Billing?

Another term that is used for service providers who are not primary care renders but play an important role in the healthcare industry is ‘Incident to’. They are often called ancillary medical staff members but without having a billable NPI. They also are obligated to serve under a primary care provider.

As for the incident to billing, CMS formally introduced the formal policy for them in 1994. Chapter 12 of The Medicare Claims Processing Manual (MCPM) has statutory language for the billing of the incident. Here’s some of the synopsis for the incident to billing;

  • 30.5.C, while a non-CHC service, the last paragraph anecdotally explains the “billing provider” must be physically present in the clinic setting where the “incident to” service is being rendered.
  • I.e., a CHC may not just use the Medical Director’s NPI as s/he is never always present in a singular clinic setting.
  • 30.6.B clearly states “incident to” only works for Part B payments
  • Remember, as with locum tenens, Medicare PPS is paid to CHCs via Part A payment methodology. This alone negates “incident to” options for the vast majority of Medicare payments. The only exclusions or carve-outs are the Part B services.
  • 30.6.4 covers Evaluation & Management (E&M) services rendered “incident to” by NPs, PAs, and CNMs but billable under a physician’s NPI.
  • While desirable in the Part B world to avoid the payment reduction for “non-physicians” this does not happen at CHCs as ALL core providers are paid the same PPS rate.
  • In other words, whether service is rendered by an NP, PA, CNM, or doctor, the CHC’s PPS rate is identical.

FQHC Manual & “Incident to” Billing

Providers’ staff assumes that the FQHC manuals from CMS have allowed ‘incident to’ billing. Basically, chapter 13 of the Medicare Benefit Processing Manual (MBPM) refers to the conclusion. The chapter is summarized in the following bullet points;

  • 10.2 lists “incident to” services as covered
  • 120 reviews typical services rendered “incident to” a billable provider but most important… Medicare payment must meet PPS G code requirements
  • I.e., CHCs may receive PPS payment only when a face-to-face encounter occurs between a Medicare beneficiary and a CHC core provider.
  • And, even then, only if the core provider renders a service that falls under the CPT code range defined under the PPS G codes.
  • 120.1 includes several key elements…
  • Rendering staff must be 1099 or W-2 employees; i.e., no volunteer providers allowed… that is if the CHC wants to be paid.
  • Multiple “incident to” visits may result from a single core provider visit.
  • “Direct Supervision” is defined as the “billing provider MUST be “immediately available” in the CHC clinic area.
  • Medicare has used the phrase “within shouting distance.”

Difference Between “Incident to” and Locum Tenens Billing

Locum tenens and incident to are two different occupations and making no mistakes in understanding them will clear up the confusion. Here’re a few summarized points that will make it easier for you to understand the difference between the two;

  •  The policy will be accepted under Medicare part B and the statute of substantial FFS (Fee-for-services) Medicare
  • Providers receive little Fee for service because of PPS payments
  • Third-party managed insurance policies and Medicaid may have policies for locum tenens billing and incident, but they cannot be assumed standard. In order to bill under Medicaid policies, the provider must need to find the substantiation document for care plans and policies.
  • –       Medicare does cover the services provided by the incident to and locum tenens only if there is a valid reason for the absence of the primary care provider or a medical reason behind the lack of face-to-face encounters between the patients and the provider.

Key Takeaway

Conclusively, based on the discussion carried out, it can be seen that a locum, or locum tenens, is regarded as a person who is temporarily fulfilling the duties of another. This term is mainly used for the clergy or physicians. The use of locum tenens providers has increased in recent years due to a number of factors, including the retirement of baby boomers, the increasing demand for healthcare services, and the Affordable Care Act.

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