Fee-For-Time compensation arrangements

Billing Tips and Guideline Reminders

What is a Fee-For-Time Compensation Arrangement?
Formerly referred to as Locum Tenens Arrangements, a Fee-For-Time Compensation Arrangement is an established billing method with a new name and several new rules.
Effective June 13, 2017, the term “locum tenens” has been 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 arrangements and reciprocal billing arrangements. As a result, continuing to use the term “locum tenens” to refer solely to fee-for-time compensation arrangements is not consistent with the law and could be confusing to the public.”¹

Has anything else changed regarding Fee-For-Time Compensation Arrangement?
Yes, specifically for physical therapists providing outpatient physical therapy services in a Health Professional Shortage Area (HPSA), a Medically Underserved Area (MUA), or a rural area.
In the case of outpatient physical therapy services furnished by physical therapists in a HPSA, a MUA, or a rural area, the A/B MAC Part B may pay the patient’s regular physical therapist for such services that are provided by a substitute physical therapist where the regular physical therapist pays the substitute on a per diem or similar fee-for-time basis, and certain other requirements are met.²

For years physicians were provided options to retain substitute physicians to take over their professional practices when they were unavailable to provide the services. Previously, these exceptions were described as illness, pregnancy, vacation or continuing medical education. Substitute physicians often have no practices of their own and may move from area to area as needed.

Listed below, are Medicare’s general requirements to ensure proper utilization and reimbursement of fee-for-time compensation arrangements for physicians and physical therapists. A patient’s regular physician or physical therapist may submit the claim, and (if assignment is accepted) receive the Part B payment, for covered visits of a substitute physician or physical therapist, if:

 The regular physician or physical therapist is unavailable;
 The regular physician or physical therapist (or medical group or physical therapy group, where applicable) pays the substitute on a per diem amount or similar fee-for-time compensation basis;
 The substitute does not have to be enrolled in the Medicare program or be in the same specialty as the physician for whom he or she is filling in, but the substitute must have a National Provider Identifier (NPI) and possess an unrestricted license in the state in which he or she is practicing;
 The Medicare beneficiary has arranged or seeks to receive the visit services from the regular physician or physical therapist. A regular physician may include a physician specialist (such as a cardiologist oncologist, urologist, hospitalist, etc.);
 The substitute physician’s status is that of independent contractor, rather than employee, and his/her services are not restricted just to the physician's office;
 The regular physician or physical therapist cannot bill for the services of a substitute for a continuous period of longer than 60 days except for a regular physician or physical therapist called to active duty in the Armed Forces;
 If a regular physician or physical therapist is absent longer than 60 days without returning to work, and the Armed Forces exception does not apply, the substitute must be credentialed and enrolled as you would do if this was a new physician or physical therapist;
 The practice must keep on file a record of each service furnished by the substitute, with his or her NPI which is available for inspection. CMS recommends that A/B MACs Part B inform physicians and physical therapists of compliance requirements when billing for substitute services. Penalty for false certifications may include civil or criminal penalties for fraud, or administrative penalties including revocation of the physician’s or physical therapist’s Medicare billing privileges, right to receive payment, or to submit claims or accept any assignments. The revocation procedures are set forth under 42 CFR 424.535 and in the Medicare Program Integrity Manual (Pub.100-8);
 Do not bill for services provided by substitute while waiting for a regular physician or physical therapist to be enrolled/credentialed;
 The ‘regular’ physician or physical therapist cannot submit claims (provide services in another facility) while a substitute is ‘standing in’ for the regular physician or physical therapist. The regular physician or physical therapist is presumed to be ‘unavailable’;
 Claims must contain the NPI of the regular physician or physical therapist in box 24J of the CMS-1500 form. This also applies for medical group physician or group physical therapist on whose behalf the services were furnished by a substitute;
 The designated attending physician for a hospice patient (receiving services related to a terminal illness) bills the Q6 modifier in item 24 of Form CMS-1500 when another group member covers for the attending physician;
 Medicare claims must contain the HCPCS code modifier ‘Q6’³ after the procedure code in box 24D of the CMS-1500 form.
 If substitute physician renders postoperative care during the period covered by the global period; it does not need to be identified on the claim form as furnished by a substitute physician;
 Requirements for submission of claims under fee-for-time compensation arrangements are the same for assigned and unassigned claims;
 In order for medical group or physical therapy group to submit claims in the name of regular physician or physical therapist; the substitute may not have reassigned his or her right to Medicare payment to the group;
 Services of non-physician practitioners (e.g., CRNAs, NPs and PAs) may not be billed under the fee-for-time compensation arrangement; and
 If a regular physician or physical therapist leaves a group for whom the group has engaged a substitute as a temporary replacement; the substitute may provide the services to the exited regular physician’s or physical therapist’s Medicare patients over a continuous period not longer than the 60-day limit. The group has up to 90 days to notify CMS Provider Enrollment that a provider has left the group.

Please remember: While many Medicaid and commercial payors do follow CMS guidelines; this is not always the case. Please confirm with each state’s Medicaid office and commercial payors on their specific policies for fee-for-time compensation arrangements.

Jeanne A. Gilreath, OHCC, CHBME
Senior Vice President & Chief Compliance Officer
AdvantEdge Healthcare Solutions

Senior level healthcare executive with over 35 years in revenue cycle management (RCM) operations, compliance and business development. Co-founder of AdvantEdge Healthcare Solutions in 1999, a global RCM company headquartered in New Jersey. Currently Senior Vice President and Chief Compliance Officer for the Company. Previously held positions in practice management for a vascular surgical group, practice management software installation services, product management, sales management, and client management in PM software development companies. Active member in HBMA since 2002 and was its 2014 president. Also member of AIHC, HCCA, MGMA and RBMA. Certifications include Officer of Healthcare Compliance, Certified and Certified Healthcare Business Management Executive.

Lisa Pettengill, CHC, CHPC, CHBME
Privacy and Deputy Compliance Officer
AdvantEdge Healthcare Solutions

Current Privacy and Deputy Compliance Officer for AdvantEdge. Responsibilities include functioning as an independent and objective party that reviews and evaluates compliance issues and privacy concerns within the organization. Previous positions held include Quality Assurance Manager for Off Shore Operations, Documentation and Training Manager and Operations Analyst. These positions allowed Mrs. Pettengill to obtain an in-depth knowledge of federal and state medical billing and reimbursement rules and regulations and to develop strong communication skills which are necessary to work with AdvantEdge personnel at all levels in order to manage the day-to-day operation of the Compliance Program. As an active member of HCCA and HBMA, certifications include CHBME, CHC and CHPC.

¹ Transmittal 3774(pdf), Pub 100-04 Medicare Claims Processing; Subject: Changes to the Payment Policies for Reciprocal Billing Arrangements and Fee-For-Time Compensation Arrangements (formerly referred to as Locum Tenens Arrangements; Published: May 12, 2017
² §30.2.11 – Payment Under Fee-For-Time Compensation Arrangements (formerly referred to as Locum Tenens Arrangements) – Claims Submitted to A/B MACs Part B, Rev. 3774, 05-12-17, Effective: 06-13-17, Implementation: 06-13-17
³ Q6 Modifier: service furnished under a fee-for-time compensation arrangement by a substitute physician or by a substitute physical therapist furnishing outpatient physical therapy services in a health professional shortage area, a medically underserved area, or a rural area

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