Fee-for-Time Compensation Arrangements and Reciprocal Billing

The term "locum tenens," which has historically been used in the CMS Internet Only manual to mean fee-for-time compensation arrangements, is being discontinued because the title of section 16006 of the 21st Century Cures Act uses "locum tenens arrangements" to refer to both fee-for-time compensation arrangement compensation arrangements and reciprocal billing arrangements."

Access the below information from this page.

Fee-for-Time Compensation Arrangement Fee-For-Time Compensation Arrangements (formerly referred to as Locum Tenens)

It is a longstanding practice for a physician to retain a substitute physician to take over his/her professional practice when the physician is absent for reasons such as illness, pregnancy, vacation, or continuing medical education, and for such physician (the regular physician) to bill and receive payment for the substitute physician's services as though he/she performed them.

The substitute physician often has no practice of his/her own and may move from area to area as needed.

Paid on a fee for time arrangement compensation basis with the substitute physician having the status of an independent contractor, rather than of an employee, of the regular physician.

Services of non-physician practitioners (e.g., CRNAs, NPs and PAs) may not be billed under fee-for-time compensation arrangements or reciprocal billing reassignment exceptions.

These provisions apply only to physicians. (With one exception physical therapist in a health professional shortage area (HPSA), a medically underserved area (MUA), or in a rural area see section below)

A regular physician is defined in this case as MDs or DOs (A regular physician may include a physician specialist such as a cardiologist, oncologist, urologist, hospitalist).  

The regular physician may submit a claim under the fee for time compensation arrangement using his/her own NPI and, if assignment is taken, receive payment for covered visit services if the following conditions are met:

  • Regular physician is unavailable to provide visit/services
  • Medicare patient has arranged or seeks to receive visit/services from regular physician
  • Regular physician pays fee-for-time compensation arrangement physician for his/her services on a per diem or similar fee-for-time basis
  • Substitute physician does not provide visit/services to patients over a continuous period of longer than 60 days
  • Regular physician identifies services as substitute physician services with modifier Q6 (services furnished by a fee-for-time compensation arrangement physician). Until further notice, regular physician must keep on file a record of each service along with substitute physician's NPI. Record should be available to Medicare on request. It is not necessary to provide this information on claim form

Exception to the 60-day limitation for locum tenens billing:

  • Section 116 of Medicare, Medicaid and SCHIP Extension Act of 2007 extended exception to the 60-day limit on substitute physician billing for physicians being called to active duty in Armed Forces for services furnished from 01/01/08-06/30/08. Section 116 of Public Law 110-173 extended accommodation of physicians ordered to active duty in Armed Forces, enacted by Public Law 110-54, by striking 'January 1, 2008,' and inserting 'July 1, 2008'.
  • Essentially, both legislative acts allow a physician being called to active duty to bill for services furnished by a substitute physician for longer than the 60-day limitation

If postoperative services are furnished by the substitute physician, the services cannot be billed with modifier Q6 since the regular physician is paid a global fee.

  • If services are provided by a substitute physician over a continuous period of longer than 60 days, regular physician must bill first 60 days with modifier Q6
  • Substitute physician must bill for remainder of services in his/her own name
  • Regular physician may not bill and receive direct payment for services over the 60-day period
  • A new period of covered visits can begin after regular physician has returned to work

For a medical group billing under the fee-for-time compensation arrangement, it is assumed that the substitute physician is paid by the regular physician.

  • Term 'regular physician' includes a physician who has left group and for whom group has hired fee for time compensation physician as a replacement
  • A physician who has left a group, and for whom group has engaged a fee for time compensation physician as a temporary replacement, may still be considered a member of group until a permanent replacement is obtained

In addition, the medical group physician for whom the substitution services are furnished must be identified by his/her NPI in Item 24j on the CMS-1500 claim form or electronic equivalent. The group must retain a copy of each service provided by the substitute physician, along with the substitute physician's NPI number. This record must be made available to Medicare upon request. It is not necessary to provide this information on the claim form.

Physicians should be aware that use of modifier Q6 by the regular physician (or medical group, where applicable) certifies that the covered visit services furnished by the substitute physician are identified in the record of the regular physician which is available for inspection, and are services that the regular physician (or group) is entitled to submit. A physician or other person who falsely certifies any of the above requirements may be subject to possible civil and criminal penalties for fraud.

Reciprocal Billing Arrangements

On an occasional reciprocal basis, a patient's regular physician will arrange for a substitute physician to provide visit/services, including emergency visits or related services. Under a reciprocal billing arrangement, the patient's regular physician may submit a claim to Medicare Part B using his/her own NPI and, if assignment is accepted, receive payment if the following conditions are met:

  • Regular physician is unavailable to provide visit/services
  • Medicare patient has arranged or seeks to receive visit/services from regular physician
  • Substitute physician does not provide visit/services to patients over a continuous period of longer than 60 days
  • Regular physician identifies services as substitute physician services by using modifier Q5 (services furnished by a substitute physician under a reciprocal billing arrangement)
  • Until further notice, regular physician must keep on file a record of each service provided by substitute physician along with substitute physician's NPI. Record should be available to Medicare on request. It is not necessary to provide this information on claim form

If postoperative services are furnished by the substitute physician, the services cannot be billed with modifier Q5 since the regular physician is paid a global fee. They need not be identified on the claim as substitution services. A physician may have reciprocal arrangements with more than one physician. The arrangements need not be in writing.

  • If services are provided by a substitute physician over a continuous period of longer than 60 days, the regular physician must bill the first 60 days with modifier Q5 (services furnished by a substitute physician under a reciprocal billing arrangement)
  • Substitute physician must bill the remainder of services in his/her own name
  • Regular physician may not bill and receive payment for services over the 60-day period
  • A new period of covered visit/services can begin after regular physician has returned to work

The term 'covered visit service' includes not only a service ordinarily defined as a covered physician visit, but also any other covered items and services furnished by the substitute physician or by others as 'incident to' services. Items and services furnished by the staff of the substitute physician covered as 'incident to' his services if billed by him, are still covered if billed by the regular physician. Items and services furnished by the staff of the regular physician covered as 'incident to' his services if furnished under his supervision are still covered if furnished under the supervision of the substitute physician.

A continuous period of covered visit services begins on the first day the substitute physician provides covered visit services to Medicare Part B patients of the regular physician. The period ends with the last day on which the substitute physician provides these services before the regular physician returns to work. This period continues without interruption on days when no covered visit services are provided to patients on behalf of the regular physician or when furnished by some other substitute physician on behalf of the regular physician. A new period of covered visit services can begin after the regular physician has returned to work.

Example: The regular physician goes on vacation on June 30, 2013, and returns to work on September 4, 2013. A substitute physician provides services to Medicare patients of the regular physician on July 2, 2013 and at various times thereafter, including August 30 and September 2, 2013. The continuous period of covered visit services begins on July 2 and runs through September 2, a period of 63 days. Since the September 2 services are furnished after the expiration of 60 days of the period, the regular physician is not entitled to bill and receive direct payment for them. The regular physician may, however, bill and receive payment for the services that the substitute physician provides on his behalf in the period July 2 through August 30, 2013.

The requirements for submission of claims under the reciprocal billing arrangements are the same for both assigned and non-assigned claims. These requirements do not apply to the substitute arrangements among physicians in the same medical group when claims are submitted in the name of the group. In this case, the group physician who performs the service must be identified.

For a medical group to submit claims for the covered visit services of a substitute physician, who is not a member of the group, the group must enter the modifier Q5 after the procedure code. In addition, the medical group physician for whom the substitution services are furnished must be identified by his/her PIN in Item 24k on the CMS-1500 claim form or electronic equivalent.

Physicians should be aware that use of modifier Q5 by the regular physician (or the medical group, where applicable) certifies that covered visit services were furnished by the substitute physician identified in a record of the regular physician, which is available for inspection, and are services for which the regular physician (or group) is entitled to submit. A physician or other person who falsely certifies any of the above requirements may be subject to possible civil and criminal penalties for fraud.

Outpatient Physical Therapist

The Implement section 16006 of the 21st Century Cures Act, allows outpatient physical therapy services furnished by physical therapists in a health professional shortage area (HPSA), a medically underserved area (MUA), or in a rural area to be billed under reciprocal billing and fee-for-time compensation arrangements in the same manner as physician's bill effective no later than June 13, 2017. Complete information is located on the link on the Outpatient therapy page.

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