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Maximizing ROI with Locum Tenens

At All Star, we pride ourselves on being a full-service staffing firm who help clients fill every conceivable type of need. Whether you seek a full-time provider (physician or mid-level,) or a locum tenens provider for short to long-term coverage, we are here for you.

In light of the highly publicized physician shortage, our clients’ needs for locum tenen providers as a part of a long-term staffing plan, (rather than a “break glass in case of emergency” type solution,) will only continue to grow. By working closely with your All Star consultant, and with a little bit of advance planning, you can be ahead of the game and reap the benefits of effective billing practices.

Throughout our many years of experience, we have spoken with clients who do have both short and long-term locum needs but are weary of the financial impact these placements may have on their organization. We've found many of our clients simply have not taken advantage of their ability to bill for the services provided by these physicians. While we are not a “billing company” per se, we do want you to know we can assist in making sense out of the billing aspect of locum tenens. In addition, we help in getting the proper paperwork done to ensure the highest percentage of collections possible. We are continuously counseling our providers about “best practices” to make sure the coding and billing processes are completed correctly.

When you understand how to effectively bill for the services our providers perform, you will find that the locum tenens solution we offer is a way to actually generate net revenue, while ensuring patient and staff satisfaction resulting in continuity of care for the community you serve. Although each individual situation is different, below are some examples and tips for you to review. 

A Locum Physician Who Is Replacing an Existing Physician

As you likely know, Locum Tenens is latin for “one holding a place.” So in the most common scenario, a Locum need arises when an existing physician is out, but will be returning at some point in the near future. If the proper conditions are met, you can bill for the locum physician’s professional services using the absent providers’ NPI number in box 24 of the CMS-1500 form. You must also use modifier Q6 in box 24d of the same form for each line item service on the claim for any service performed by the locum physician. To use this as a means to bill for these services provided, the following conditions must apply:

  • The locum physician must not provide services to Medicare patients longer than 60 consecutive days
  • The locum physician is paid on a daily/per diem basis (not by salary)
  • The patients that are seen by the locum physician were scheduled originally to be seen (or would have been seen,) by the regular physician

If any absent physician returns to their practice but then must leave again, another physician can again be “hired” and a new 60 day period begins at that point.

For “Extended” Locum Tenen Coverage
(Over 60 Consecutive Days)

For needs of the “ongoing” variety (hospital/group expansion, starting a new service line, and multiple perm searches leading to ongoing locums,) it may behoove you to take a longer term approach. With enough advance notice (about 60-90 days is sufficient,) we can assist you with payer credentialing for all booked providers for both commercial payers, and Medicare. When you contact us for your next long term need, simply let us know what your payer mix is composed of, and we can create the perfect long-term solution for you.

Medicaid Billing

In terms of Medicaid Billing, please check with your state’s Medicaid plan for specific rules on billing for services provided. If your state does not allow billing under the exiting provider, you must enroll the replacement physician as you would had you hired one permanently.

The Bottom Line

If done properly, Locum Tenen Physicians can more than cover their “cost” to a facility or practice by the professional fees they produce. But the ability to bill for the Locum’s professional services is only half the story. We have found if our clients choose to go without any type of coverage, not only do they lose the professional services of the “missing” physician, they also lose the billable revenue from the ancillary services that would result from that patient being treated at their facility (as opposed to being deferred.) In short, make sure revenue isn’t being “left on the table” for another entity to scoop up while you have a physician vacancy that we can fill. Ask us for more information today

How Much Is the Current Vacancy Costing You?

According to the latest MGMA data, the cost of not having a practicing physician in many specialties is significant to say the least. By using locum tenen providers to treat patients who might otherwise not have been seen, or who may have gone elsewhere, our clients can maintain revenue streams in the absence of permanent physicians. Beyond the loss of physician revenue (shown below,) you may also experience loss of revenue in other facets of healthcare delivery—including revenue from anesthesia, tests, and more.

The chart below shows the latest data based on the weekly, monthly, and annual costs of physician vacancies.

Average Billable Revenue by Specialty

  Weekly   Monthly   Yearly
Anesthesiology/Pain Management 47,748   206,910   2,482,916
Cardiology 51,064   221,278   2,655,341
Ear, Nose & Throat 31,645   137,127   1,645,525
Emergency Medicine 39,575   171,490   2,057,875
Family Practice 32,219   139,618   1,675,411
Gastroenterology 38,993   168,970   2,027,638
Hospitalist 41,307   178,995   2,147,944
Internal Medicine 37,551   162,723   1,952,677
Neurology 17,157   74,347   892,166
Obstetrics/Gynecology 33,882   146,824   1,761,888
Pediatrics 19,070   82,636   991,636
Psychiatry 20,306   87,992   1,055,909
Pulmonary Medicine 28,406   123,094   1,477,125
Surgery: General/Vascular/CVT 40,303   174,646   2,095,750
Surgery: Neuro 50,500   218,833   2,626,000
Surgery: Orthopedic 43,864   190,076   2,280,916
Urology 35,641   154,443   1,853,311

"When I was initially contacted by All Star, I had already been approached by several companies and presented to quite a few opportunities so I didn't think I needed to speak to another firm. What I didn't count on was All Star having another eight positions which other agencies didn't have. Now I'm happily working at one of the options they offered. Thanks!"
- Bal A., M.D.

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