Practice of Medicine
Managing the Legal and Regulatory Risks of Locum Tenens Physicians
As more physicians choose to practice medicine as locum tenens, it is important that healthcare organizations understand the regulatory risks associated with using such services. Although there are many benefits offered by locum tenens physicians, healthcare organizations should ensure that they’re minimizing their risks before signing any service contract.
- Consider creating a checklist of important policies or practice reminders specific to your healthcare organization that a new locum tenens can use.
- Ensure that your healthcare organization has a policy in place regarding locum tenens that includes procedures for the on-boarding, supervision and exiting of these physicians.
- Stay up-to-date with any CMS, DEA or state-specific laws and regulations regarding the use of locum tenens.
The use of locum tenens continues to rise as many organizations take advantage of these physician services. Hiring locum tenens physicians gives providers a flexible option to fill absences for a variety of reasons, including illnesses, vacations, paternity or maternity leave, and continuing medical education opportunities. Bringing on a new physician for a short period of time can expose a practice to certain legal and regulatory risk management issues. MagMutual recommends the following legal and risk management best practices when using a locum physician at your practice.
Notifying Your Malpractice Carrier
You should notify your malpractice carrier of the locum arrangement to ensure that malpractice coverage applies for physician services provided by the locum provider. Most malpractice carriers will provide malpractice coverage for a locum arrangement for 60 days per malpractice policy period. Conveniently, MagMutual provides policyholders with malpractice coverage for locum physicians for up to 60 days per policy period.
Selecting a Locum Tenens Physician within the Same Specialty
Based on MagMutual’s experience advising healthcare organizations on issues involving locum providers, we have found that choosing a locum tenens physician within the same specialty as the absentee physician can reduce exposure to liability. Especially in rural areas where locum tenens providers may be difficult to recruit, a physician practice can be tempted to fill a position with a similar specialty in hopes that the skills are generally transferable or that other physicians in the healthcare organization can step in if needed.
For example, if the practice generally treats large numbers of pediatric patients and genuinely needs a family practice physician to fill the vacancy, you should advise the practice against accepting an internist physician in hopes that other physicians can cover the pediatric patients. Circumstances will inevitably arise that will put the internist in charge of treating a pediatric patient, so practices should avoid settling for any specialty other than the one they are specifically seeking.
Specifying the Requisite Skill and Expected Case Load before Hiring
It is important for practices to be realistic about the skills and time commitment required for the position they are trying to fill with a locum. Ensure that this information is conveyed to the potential locum tenens physician. For example, if the practice sees an unusually high number of patients with autoimmune diseases, it might be wise to disclose this information to a potential locum candidate to ensure that the physician is equipped with the experience and expertise to provide care to those patients.
Practices might also find it beneficial to inquire about the locum physician’s past case load management to make sure they are comfortable with the time commitment required to fill the position. While working a 24-hour call shift may not seem unusual for many physicians, others may not feel comfortable working those hours. By discussing those issues during the hiring process and understanding any limitations of a locum physician before they begin seeing patients, healthcare organizations can reduce exposure to liability.
Verifying All Physician Documentation and Licensing
You should ensure that all documentation and licensing requirements of the locum physician are up-to-date and authentic. That may require verification of criminal background checks, education, training, past and future privileges, Medicare certification and board certification. Additionally, physician practices affiliated with larger organizations may need to look into whether their organization has requirements for privileging or credentialing locum physicians.
Providing a Thorough Orientation for the Locum Tenens Physician
You should schedule time before the locum tenens physician is scheduled to see patients to provide a proper orientation for them to become acquainted with your facility, staff and equipment. At a minimum, this orientation should cover:
- A facility tour (including the locations of equipment, supplies and medications)
- A point of contact (for the entire duration of the locum physician’s services)
- The code of conduct or specific rules at the facility, if applicable
- The medical records system at the facility
- The process for ordering and follow-up on diagnostic tests
- The availability of specialists, equipment and support staff
- The process for referrals
- The healthcare organization’s philosophy on prescription drugs.
Conveying the availability of specialists and support staff to the locum provider is especially important in rural areas. Locum physicians need to know whether the nearest cardiologist is located in the facility itself or in a town 30 miles away. Additionally, if a locum physician usually relies heavily upon support staff during procedures, the locum physician may feel uncomfortable in a setting where they have to handle procedures without that support. A thorough discussion between the physician practice and the locum physician about the practice environment reduces the chances of surprising the locum physician with unexpected circumstances that can affect the quality of care.
Becoming Familiar with Locum Tenens Billing Requirements
Billing requirements for locum physicians vary by payer. Even though both public and private payers tend to follow Centers for Medicare and Medicaid Services (CMS) guidelines for locum reimbursement, you should first validate reimbursement with the individual payers as to whether the payers have adopted these CMS guidelines, and if not, inquire as to which specific rules govern their reimbursement procedures for locum providers.
If the payer follows the CMS guidelines, CMS allows payment for services provided by locum physicians subject to the following conditions:
- If a practice needs locum physician services for less than 60 days, the healthcare organization should bill under the name and billing number of the absent physician while the healthcare organization pays them “on a per diem or similar fee-for-time basis.” The locum physician must have a National Provider Identifier (NPI) and the practice must document each service provided by the locum with the locum physician’s NPI. Claims for services provided by locums should be submitted with a Q6 modifier appended to each procedure code.
- If a practice needs locum physician services for more than 60 days, the practice should enroll the locum physician in its contracted payer mix before the locum physician’s start date. The 60-day period begins on the first day that the locum physician sees a patient.
Note that it is impermissible to bill for any locum physician services for more than 60 days —even if the practice rotates among different locum physicians. For example, you cannot avoid enrolling the locum in their contracted payer mix by switching locum providers on day 50 of the services.
Ensuring Compliance with U.S. Drug Enforcement Administration Requirements
As locum physicians sometimes practice in different states, you should ensure that the locum physician has a separate U.S. Drug Enforcement Administration (DEA) registration in the state in which the healthcare organization is located. In certain situations, the DEA allows locums who will be working solely in a hospital or clinic setting to use the hospital’s DEA registration instead of registering independently with the DEA.
In addition, you should be clear with the locum about their prescribing pattern and comfort level with dispensing drugs and controlled substances. As a representative of the practice, your locum tenens physician should mirror the practice’s attitude towards prescribing and dispensing medication. Dispensing drugs and controlled substances in a manner inconsistent with other physicians in the organization could open an organization to liability.
Understanding Physician Supervision Requirements
If your locum tenens arrangement involves supervising advanced practice clinicians, be clear with the locum physician regarding what those responsibilities entail. When applicable, make sure the locum tenens realizes they will be considered a supervising physician in the new setting.
Maintaining Timely Documentation and Ensuring Coordination of Care
Maintaining timely documentation and ensuring coordination of care is important in any healthcare organization; however, it is especially important when employing a locum physician due to the short-term nature of the arrangement.
If a new patient sees the locum physician and needs to be monitored closely to avoid progression of a condition, this should be thoroughly documented and carefully coordinated with other physicians and support staff to avoid any gaps in coverage for the patient once the locum leaves. Failing to document care or coordinating follow-up with a patient can expose a practice to significant liability.
Following these legal and regulatory risk management best practices will ensure that your practice is able to enjoy the benefits of filling short-term physician vacancies with locum physicians while still managing the risks and exposure to liability that these arrangements can bring.
For more information regarding MagMutual’s locum tenens coverage, which may be a part of your malpractice policy, please contact your agent or call 1-800-282-4882.
- Inquire about the locum physician’s past case load management and types of patients served before hiring to ensure a smooth transition of the physician into your healthcare practice.
- Request copies of all documentation, licensing and certifications of the locum physician and maintain these copies in one location.
- Consider asking for references from previous employers before hiring a particular locum physician.
Healthcare organizations that improperly manage their locum tenens physicians could face a wide range of regulatory issues, from False Claims Act violations to medical malpractice claims to issues with DEA inspectors. Although those issues are relatively infrequent, the damages can quickly add up if a healthcare organization is found liable for any of them.
Answers are provided below
True or false?
Question 1: A healthcare organization should ensure that any locum tenens physician hired has a DEA registration in the state in which the healthcare organization is located.
Question 2: A healthcare organization should relay the importance of timely documentation and continuity of care when employing the locum physician due to the short-term nature of the arrangement.
Question 3: All payers have the same requirements for a healthcare organization to bill for services provided by locum physicians.
Question 1: True. Before hiring a locum physician, the healthcare organization should ensure that the physician has a separate U.S. Drug Enforcement Administration registration in the state in which the healthcare organization is located. In certain situations, the DEA allows locums who will be working solely in a hospital or clinic setting to use the hospital’s DEA registration instead of registering independently with the DEA.
Question 2: True. If a new patient sees the locum physician and needs to be monitored closely to avoid progression of a condition, this should be thoroughly documented and carefully coordinated with other physicians and support staff to avoid any gaps in coverage for the patient once the locum leaves. Failing to document care or coordinating follow-up with a patient can expose a practice to significant liability
Question 3: False. Billing requirements for locum physicians vary by payer. Even though both public and private payers tend to follow Centers for Medicare and Medicaid Services (CMS) guidelines for locum reimbursement, you should first validate reimbursement with the individual payers as to whether the payers have adopted these CMS guidelines, and if not, inquire as to which specific rules govern their reimbursement procedures for locum providers
 CompHealth, How to Bill for Locum Tenens Services, CompHealth Blog (Jan. 7, 2015), https://comphealth.com/resources/bill-locum-tenens-services/.
 Ctrs. for Medicare & Medicaid Servs., Medicare Claims Processing Manual (2008), https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/clm104c01.pdf.
 A narrow exception to the sixty day limit on locum tenens physician services exists for absent physicians who have been called to active duty in the Armed Forces. See id.
 Ctrs. for Medicare & Medicaid Servs., supra note 3.
 21 C.F.R. § 1301 (2016).
 Kelly K. Dineen & James M. DuBois, Between a Rock and a Hard Place: Can Physicians Prescribe Opioids to Treat Pain Adequately While Avoiding Legal Sanctions, 42(1) Am. J. Law Med. 7–52 (2016).
 Am. Med. Ass’n, Medical liability: Missed follow-ups a potent trigger of lawsuits, amednews.com (July 15, 2013), https://amednews.com/article/20130715/profession/130719980/2/.
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The information provided in this resource does not constitute legal, medical or any other professional advice, nor does it establish a standard of care. This resource has been created as an aid to you in your practice. The ultimate decision on how to use the information provided rests solely with you, the PolicyOwner.