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Locum Tenens vs. “Incident to” Billing: Unraveling the Mystery

January 17, 2017

Too many CHCs are befuddled when it comes to understanding how to bill services under another provider’s National Provider Identifier (NPI). Some CHCs do it every day, others never, and some sporadically while applying different rules or policies often founded in folklore or fantasy vs. payer contract language or government statute. Let’s set the record straight on these terms, what they mean, and how to use them.

Locum Tenens

By definition from, locum tenens means “one filling an office for a time or temporarily taking the place of another —used especially of a doctor or clergyman.” CMS provides an entire policy around locum tenens discussing “reassignment” of payments. The following excerpts are relevant for this conversation:

  • “[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.”

This is the only explicit federal policy regarding locum tenens AND it only applies to Medicare Part B payments. Why is this significant for CHCs? Several thoughts:

  1. CHCs are paid via ANSI 837-I which is a Part A (not B) claim format/process. Funding is from Part B but Part A NPI rules apply.
  2. Part A (837-I) pays the NPI of the facility, not the rendering provider NPI. The only CHC obligation in terms of the rendering provider is to make certain s/he is employed or contracted W-2 or 1099.
  3. This is not a Medicaid policy… Locum Tenens only applies to Medicare Part B. For CHCs this means only ANSI 837-P claims billed for diagnostics and/or professional services at facilities such as hospitals, assisted living centers, and nursing homes.

Reiterating item 3 immediately above, there is no “standing” Locum Tenens policy. Each CHC must check with their state Medicaid program for written statute/policy and evaluate contracts in place for each managed care payer.  Too many CHCs continue to think they can just hire a doctor, NP, PA, etc. and bill their work to all payers under any other provider’s NPI. They tell me they are “billing locums” as if this was some standing policy on which all payers agree. Again, no such thing exists.  Sometimes when I suggest this is a risky practice they correct me and say they only use the medical director’s NPI… as if this would make it permissible. It does not.

“Incident to” Billing

If not “locums” another term misunderstood by CHCs is “incident to” billing. In short, “incident to” is often used to describe a provider (or ancillary staff person) without a billable NPI rendering services to be billed under another provider who has a billable NPI. Frankly, in conversation with too many CHC staff and leadership, it is often confused with locum tenens.

CMS has had formal policy regarding “incident to” billing since 1994. The Medicare Claims Processing Manual (MCPM) Chapter 12  has specific statutory language around “incident to” billing.  It is worthwhile reading for any billing professional.  Here is a synopsis of most relevant sections:

  • 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 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, CNMs but billable under a physicians 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 a NP, PA, CNM, or doctor, the CHC’s PPS rate is identical.

While these statutes are enlightening, please remember:

  • They only apply to Medicare, not Medicaid.
  • (And, this is herein intentionally repetitive) CHC core providers are paid by Medicare via PPS rate, not Part B; the latter is via the Physician Fee Schedule (PFS). The only exceptions are diagnostic tests and CHC services not eligible for Medicare PPS payment.
  • Again, CHCs are paid by Medicare via group NPI; i.e., NPs, PAs, CNMs, and doctors working at CHCs are ALL paid the same PPS rate via the PPS “G” codes.

So, like locum tenens, since this is a Medicare only policy a CHC must know “incident to” rules existing for state Medicaid statute and managed care payer contracts. There is no “standard” way to interpret “incident to” rules. Every managed care and state Medicaid payer is different.

FQHC Manual & “Incident to” Billing

CHC staff will often convey that the FQHC manual allows “incident to” billing. These folks are referring to the Medicare Benefit Processing Manual (MBPM) Chapter 13 . The following bullets are relevant MBPM sections:

  • 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 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 employee; i.e., no volunteer providers allowed… that is if the CHC wants to be paid.
    • Multiple “incident to” visits may result from 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.”

To summarize, “incident to” services at a CHC are covered BUT a CHC may only be paid the PPS rate when there is a medically necessary, face-to-face encounter between a Medicare beneficiary and a CHC core provider.

Make no mistake, locum tenens and “incident to” billing can cause confusion. Here’s a quick summary to hopefully make it easier to understand:

  • The only nationally accepted, federal statute substantiated policies cover fee-for-service (FFS) Medicare.
  • CHCs receive very little FFS Medicare money due to the all-inclusive PPS payment.
  • Medicaid and Managed Care plans may have policies but they are not standard. Your CHC must find written substantiation in statute for Medicaid and contract language for managed care plans. If none exists, the policies don’t exist for those payers.
  • Yes, the Medicare FQHC manual states “incident to” services are covered at a CHC but Medicare PPS payment still only happens when there is a medically necessary face-to-face encounter between a core provider and a Medicare beneficiary.
  • There is in a CHC no legitimate reason to use “incident to” billing. If a core provider has their own NPI, bill payers using it. If not (and no contract or statute language affords other options), s/he is not billable to any payers requiring the 837-P.
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At PMG, when we are asked by CHCs to bill incident-to, under a locum, or to use a “supervising” providers NPI, what we are really being asked is “May I borrow that other provider’s number?” The answer should always be another two questions:

  1. “Why?” and
  2. “What problem are you trying to solve by borrowing the number?”

The answer to the second question often makes it clear that they are just looking for ways to work outside the norm… and just to get paid. This would again move us down the line towards an abusive coding practice which is desirably avoidable.

The bottom line… know the rules! Audit records to make certain your team is doing things the right way. Never compromise just to get paid. Remember, ignorance of the rules never mitigates personal or CHC liability. Outsource enrollment and credentialing to an expert firm if you cannot garner enough expertise to both stay out of trouble and maximize payments from third parties. The peace of mind derived from doing things the correctly always wins over worry regarding questionable and risky business practices.

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