Fee-For-Time Compensation Arrangements (Formerly Locum Tenens Arrangements)

It is a longstanding practice for a physician to retain a substitute physician to take over his or her professional practice when the physician is absent for reasons such as illness, pregnancy, vacation or continuing medical education. The absent physician will bill and receive payment for the substitute physician’s services as though he or she performed them. The substitute physician often has no practice of his or her own and may move from area to area as needed. The regular physician generally pays the substitute physician on a per diem or other fee-for-time compensation basis with the substitute physician having the status of an independent contractor, rather than of an employee, of the regular physician.

Effective June 13, 2017, this same process is available to Medicare-enrolled physical therapists who use substitute physical therapists to furnish outpatient physical therapy services in a Health Professional Shortage Ares (HPSA), Medically Underserved Area (MUA) or a rural area.

A patient’s regular physician or physical therapist may submit the claim, and (if assignment is accepted) receive the Part B payment for covered visit services of a substitute physician or physical therapist if:

• The regular physician or physical therapist is unavailable to provide the services;
• The Medicare beneficiary has arranged or seeks to receive the services from the regular physician or physical therapist;
• The regular physician or physical therapist pays the substitute for his/her services on a per diem or similar fee-for-time basis;
  • The substitute physician or physical therapist does not provide the services to Medicare patients over a continuous period of longer than 60 days subject to the following exception:
    o A physician or physical therapist called to active duty in the Armed Forces may bill for services furnished under a fee-for-time compensation arrangement for longer than the 60-day limit; and
• The regular physician or physical therapist indicates that the services were provided by a substitute physician or physical therapist under a fee-for-time compensation arrangement meeting the outlined requirements by entering HCPCS code modifier Q6 (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) after the procedure code.

Note: When the regular physician or physical therapist (or the medical group or physical therapy group, where applicable) appends the modifier Q6 to a claim line item, they are certifying that the services are covered visit services furnished by the substitute physician or physical therapist identified in a record of the regular physician or physical therapist which is available for inspection, and are services for which the regular physician or physical therapist (or group) is entitled to submit the claim. The 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. 

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

Physician Medical Group or Physical Therapy Group Claims Under Fee-For-Time Compensation Arrangements
In order for a medical group or physical therapy group to submit claims in the name of the regular physician or physical therapist for the services of a substitute physician or physical therapist, the substitute physician or physical therapist may not have reassigned his or her right to Medicare payment to the group through a CMS-855R reassignment enrollment form approved by the A/B MACs Part B and the following requirements must be met:

• The regular physician or physical therapist is unavailable to provide the services;
• The Medicare patient has arranged or seeks to receive the services from the regular physician or physical therapist; and
• The substitute physician or physical therapist does not provide the services to Medicare patients over a continuous period of longer than 60 days subject to the following exception: A physician or physical therapist called to active duty in the Armed Forces may bill for services furnished under a fee-for-time compensation arrangement for longer than the 60-day limit

Services are billed for the entity as follows:

• The medical group or physical therapy group must enter in item 24d of Form CMS-1500 the HCPCS code modifier Q6 after the procedure code
• 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
• A record of each service provided by the substitute physician or physical therapist must be kept on file along with the substitute physician’s or physical therapist’s NPI. This record must be made available to the A/B MACs Part B upon request.

In addition, the medical group physician or group physical therapist on whose behalf the services were furnished by a substitute must be identified by his or her NPI in block 24J of the appropriate line item.

Payment Under Reciprocal Billing Arrangements
Under section 16006 of the 21st Century Cures Act, a Medicare-enrolled physical therapist may use a substitute physical therapist to furnish outpatient physical therapy services in a HPSA, a MUA, or a rural area under a reciprocal billing arrangement on or after June 13, 2017.

The patient’s regular physician or physical therapist may submit the claim, and (if assignment is accepted) receive the Part B payment for covered visit services which the regular physician or physical therapist arranges to be provided by a substitute physician or physical therapist on an occasional reciprocal basis if:

• The regular physician or physical therapist is unavailable to provide the services;
• The Medicare patient has arranged or seeks to receive the services from the regular physician or physical therapist;
• The substitute physician or physical therapist does not provide the services to Medicare patients over a continuous period of longer than 60 days subject to the following exception: A physician or physical therapist called to active duty in the Armed Forces may bill for services furnished under a reciprocal billing arrangement for longer than the 60-day limit; and
• The regular physician or physical therapist indicates that the services were provided by a substitute physician or physical therapist under a reciprocal billing arrangement meeting the requirements by entering in item 24d of Form CMS-1500 HCPCS code Q5 modifier (service furnished under a reciprocal billing 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) after the procedure code. The regular physician or physical therapist must keep on file a record of each service provided by the substitute physician or physical therapist along with the substitute physician or physical therapist’s NPI, and make this record available to the A/B MAC Part B upon request.

If the only services a physician performs in connection with an operation are post-operative services furnished during the period covered by the global fee, these services need not be identified on the claim as services furnished by a substitute physician.

A physician or physical therapist may have reciprocal billing arrangements with more than one physician or physical therapist. The arrangements need not be in writing.

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

By entering the Q5 modifier on a claim line item, the regular physician or physical therapist (or the medical group or physical therapy group, where applicable) is certifying that the services are covered visit services furnished by the substitute physician or physical therapist identified in a record of the regular physician or physical therapist which is available for inspection, and are services for which the regular physician or physical therapist (or group) is entitled to submit the claim. The 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).

The Social Security Amendments Act of 1994 allowed, on a permanent basis, for payment to be made to a patient’s regular physician and not a substitute physician, in the event that a fee-for-time compensation arrangement existed. The regular physician must submit the services using his/her own National Provider Identifier (NPI). 
 
Physician Medical Group or Physical Therapy Group Claims Under Reciprocal Billing Arrangements
In order for a medical group or physical therapy group to submit claims in the name of the regular physician or physical therapist for the services of a substitute physician or physical therapist, the substitute physician or physical therapist may not have reassigned his or her right to Medicare payment to the group through a CMS-855R reassignment enrollment form approved by the A/B MACs Part B and the following requirements must be met:

• The regular physician or physical therapist is unavailable to provide the services;
• The Medicare patient has arranged or seeks to receive the services from the regular physician or physical therapist; and
• The substitute physician or physical therapist does not provide the services to Medicare patients over a continuous period of longer than 60 days subject to the following exception: A physician or physical therapist called to active duty in the Armed Forces may bill for services furnished under a reciprocal billing arrangement for longer than the 60-day limit.

Services are billed for the entity as follows:

• The medical group or physical therapy group must enter in item 24d of Form CMS-1500 the HCPCS code modifier Q5 after the procedure code.
• The designated attending physician for a hospice patient (receiving services related to a terminal illness) bills the Q5 modifier in item 24 of form CMS-1500 when another group member covers for the attending physician
• A record of each service provided by the substitute physician or physical therapist must be kept on file along with the substitute physician’s or physical therapist’s NPI. This record must be made available to the A/B MAC Part B upon request.
• In addition, the medical group physician or group physical therapist on whose behalf the services were furnished by a substitute must be identified by his or her NPI in block 24J of the appropriate line item

On claims submitted by a group, the group physician or group physical therapist that actually performed the service must be identified as indicated above with one exception. When a group member provides services on behalf of another group member who is the designated attending physician for a hospice patient, the Q5 modifier may be used by the designated attending physician to bill for services related to a hospice patient’s terminal illness that were performed by another group member.

References

• Fee-For-Time Compensation Arrangements: CMS Pub. 100-04, Chapter 1, Section 30.2.11 (PDF)
• Reciprocal Billing: CMS Pub. 100-04, Chapter 1, Section 30.2.1.H and 30.2.10 (PDF)