Healthcare facilities regularly face situations where providers need to start seeing patients before their credentialing process is complete. This might happen with a new permanent hire or a temporary Locum Tenens physician covering for an absent provider. Understanding the proper billing procedures for these non-credentialed providers is essential to avoid compliance issues, claim denials, and potential legal penalties.

Why Provider Credentialing is Important

Before exploring billing options, it’s important to understand what credentialing is and why it matters. Provider credentialing is the systematic process of verifying a healthcare provider’s qualifications, which typically includes:

• Education and training
• Residency and fellowship
• Board certifications
• Work history
• Malpractice insurance
• State licensure
• Hospital privileges
• References
• Criminal background checks

The credentialing process typically takes 60-180 days, creating a significant gap between when a provider joins a practice and when they can bill insurance companies directly under their own name.

Common Scenarios Requiring Non-Credentialed Provider Billing

There are two main scenarios where billing for non-credentialed providers becomes necessary. First, when hiring permanent full-time or part-time providers, practices often need interim billing solutions while waiting for credentialing to be completed. This situation can arise when:

• A practice is expanding and needs additional providers immediately
• An unexpected departure creates an immediate staffing need
• A new graduate or an out-of-state provider joins the practice without pre-established credentials

Second, temporary or substitute coverage is required when providers are unavailable due to medical leave, maternity/paternity leave, vacation, or seasonal increases in patient volume. In both cases, practices must navigate complex billing regulations that vary by payer.

Billing Options for Non-Credentialed Providers

Let’s explore the compliant billing approaches for non-credentialed providers, understanding the rules, limitations, and requirements for each option.

Medicare Billing Options

Medicare has specific rules regarding billing for non-credentialed providers that differ from commercial payers. There are two primary Medicare-approved methods:

1. Locum Tenens Arrangements:

A substitute physician temporarily fills in when the regular provider is unavailable due to reasons such as illness, pregnancy, or vacation. In this case, services are billed under the absent physician’s NPI with a Q6 modifier on each CPT code. This method is subject to a 60-day consecutive limit, and thorough documentation is essential.

2. Reciprocal Billing Arrangements

This involves an agreement between physicians to cover each other’s practices during absences. Services are billed under the absent physician’s NPI with a Q5 modifier, again subject to a 60-day limit and requiring that the patient regularly sees the absent provider.

Commercial payers have varied policies. Some allow locum tenens arrangements similar to Medicare, permit group billing using a shared NPI, or offer provisional credentialing that allows billing for a short period. It is important to review each payer’s policies carefully, as misrepresenting the rendering provider or billing under another provider’s NPI without an approved arrangement is strictly prohibited.

What Billing Methods Are NOT Compliant

Understanding prohibited billing practices is equally important to avoid compliance issues and penalties:

1. Billing Under Another Provider’s NPI

Despite common misconceptions, it is generally not permissible to bill services rendered by a non-credentialed provider under another credentialed provider’s NPI outside of specific approved arrangements (locum tenens, reciprocal billing). This practice:

• Misrepresents the provider who actually performed the service
• May violate False Claims Act provisions
• Can result in significant penalties and repayment obligations
• May violate payer contracts, potentially leading to termination

Real-World Consequences: In 2018, a New York healthcare facility paid $6.6 million in penalties for medical billing services performed by non-credentialed providers under credentialed providers’ NPIs. Similarly, an Oklahoma provider group paid $580,000 for similar violations.

2. Incident-to Billing Misuse

The “incident-to” billing provision allows services from non-physician practitioners to be billed under a physician’s NPI at 100% of the physician fee schedule, but has specific requirements:

• The physician must have established the diagnosis and treatment plan
• The physician must provide ongoing involvement in the patient’s care
• The physician must be physically present in the office suite when the service is performed
• The service must be one that is commonly furnished in a physician’s office

This provision is not intended as a workaround for non-credentialed provider billing and cannot be used when:

• The non-credentialed provider is establishing a new diagnosis
• The physician is not physically present in the office suite
• The patient is being seen for a new problem
• No supervising physician has seen the patient for the condition

Compliant Alternative Solutions
When traditional billing methods aren’t feasible, consider these compliant alternatives:

Out-of-Pocket Billing:
While waiting for credentialing, providers can see patients on a cash-pay basis, offer competitive self-pay rates, provide superbills for patients to submit for potential out-of-network reimbursement, and clearly communicate billing expectations.

Restrict Services to Non-Insurance Activities:
Non-credentialed providers can focus on services that do not require payer credentialing, such as sports physicals, occupational medicine services, or workers’ compensation cases, which often have different credentialing requirements.

Expedited Credentialing Strategies:
To minimize the non-credentialed period, practices should begin the credentialing process during the interview stage, use CAQH ProView to streamline application processes, consider hiring credentialing specialists or services, and maintain active follow-up on applications.