A Definitive Guide to Bridging the “Revenue Gap” | Written by Adam Blake • 2 Minute Read
The Cost of the “Credentialing Gap”
You have hired a brilliant new physician. They have started work. Patients are scheduled. But their insurance credentialing is still “Pending.” This 90-120 day gap is the “Credentialing Limbo,” and without a compliance strategy, it can cost a practice $30,000 to $50,000 per month in lost revenue.
One of the most dangerous myths in revenue cycle management is the idea that you can simply “bill under the owner doctor’s name” until the new provider is approved.
Stop. That is fraud.
Intentional or not, billing for a service performed by Dr. A under the NPI of Dr. B is considered a False Claim by the OIG (Office of Inspector General). It can lead to civil penalties of up to $11,000 per claim, recoupment of funds, and exclusion from federal programs. However, there are compliant ways to generate revenue while waiting for approval. This deep-dive guide explores the legal workarounds, including Incident-To billing, Locum Tenens, Reciprocal Billing, and Cash-Pay strategies under the No Surprises Act.
Strategy 1: “Incident-To” Billing (The Deep Dive)
This is the most common compliant workaround for non-credentialed providers (like NPs, PAs, or even new physicians in some cases), but it has the strictest rules of any billing mechanism. “Incident-to” services are those provided by a non-credentialed provider that are an integral part of the supervising physician’s treatment plan.
Direct vs. General Supervision
The number one reason for audit failure in incident-to billing is the confusion over “Supervision.”
| Billing Type | Supervision Required | Definition |
|---|---|---|
| Incident-To (100% Pay) | Direct Supervision | The credentialed physician must be present in the office suite and immediately available to assist. They cannot be at lunch, at the hospital, or reachable only by phone. |
| Standard (85% Pay) | General Supervision | The physician must be reachable by phone/text but does not need to be in the building. (Note: The provider must be credentialed to use this). |
The Mandatory Rules
- Established Patients Only: The supervising doctor must have seen the patient first to establish the plan of care. You cannot use incident-to for new patients.
- Active Involvement: The supervising doctor must remain involved in the ongoing care (e.g., seeing the patient every 3rd visit).
- No New Problems: If the patient presents with a new complaint (e.g., came for hypertension, now has chest pain), the supervising doctor must take over the visit.
Verdict: Great for follow-ups and chronic care management, but cannot be used for new patient exams. See CMS guidelines on Incident To Services.
Strategy 2: Locum Tenens (Fee-For-Time)
Many practices try to use the Q6 modifier (Locum Tenens) for new hires. Be careful. This rule is designed for temporary replacements of a physician who is absent, not for adding permanent staff.
Under Section 30.2.11 of the Medicare Claims Processing Manual, you can bill for a substitute physician under the regular physician’s NPI if:
| Allowed Usage (Q6 Modifier) | Forbidden Usage |
|---|---|
| Covering for a doctor on vacation, maternity leave, CME training, or illness. | Covering for a new doctor while they wait for credentialing (unless they are replacing a departed doc). |
| Maximum period of 60 continuous days. | Using it indefinitely or for practice expansion (adding a new lane). |
Verdict: This is only valid if your new physician is filling a vacancy left by a former physician who has left the practice but is still credentialed (for a short time). If you are expanding your practice, this code generally does not apply.
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Strategy 3: Reciprocal Billing
Often confused with Locum Tenens, “Reciprocal Billing” is another compliant method for temporary coverage. This occurs when two physicians agree to cover each other’s practice on an occasional basis (e.g., covering for sick days or weekends).
Like Locum Tenens, this uses the Q6 modifier and is limited to 60 continuous days. The key difference is that Reciprocal Billing usually involves an exchange of services rather than a monetary payment to the substitute doctor. This is compliant only if the new physician is covering for an existing physician who is unavailable.
Strategy 4: The Cash-Pay Bridge (The Safe Route)
The safest route is transparency. Explain to patients that the doctor is “Out of Network” temporarily. However, in 2026, you must comply with the No Surprises Act.
The “Good Faith Estimate” (GFE)
If you see a self-pay patient (or a patient whose insurance you don’t yet take), you are legally required to provide a Good Faith Estimate of expected charges before the service is rendered.
- Step 1: Offer a discounted “Time-of-Service” cash rate (e.g., $100 instead of $150).
- Step 2: Issue a Good Faith Estimate form listing the CPT codes and costs.
- Step 3: Provide the patient with a “Superbill” (a receipt with CPT and ICD-10 codes) after the visit so they can seek reimbursement from their insurer.
This keeps cash flow moving and poses zero compliance risk. Learn more in our billing for small practices guide.
Strategy 5: Retroactive Billing (Payer Differences)
Can you see the patient now and bill later? It depends entirely on the payer. Here is a breakdown of major payer policies:
| Payer | Retroactive Policy | Strategy |
|---|---|---|
| Medicare | Yes (30 Days) | Bill 30 days back from the date application was received. Hold claims until PTAN is issued. |
| Medicaid | Varies (State Dependent) | Some states allow retro-billing back to license date; others are strict. Check your state manual. |
| BCBS | Rarely | Usually effective on approval date. Do not see patients until approved. |
| Aetna / UHC | No | Effective date is contract signature date. Claims held before this will be denied. |
⚠️ The “Ghost Billing” Trap
Never bill under the name of a credentialed doctor if that doctor did not perform or directly supervise the service. This is “Ghost Billing.”
Insurance audits track simple metrics: If Dr. Smith claims to have seen 40 patients in one day (20 of his own + 20 of the new doctor’s), the math doesn’t add up. This triggers fraud investigations by the OIG and “Clawbacks” where you must repay thousands of dollars.
The “New Hire” Survival Checklist
To minimize the revenue gap, follow this timeline for every new physician:
- Day 0 (Contract Signed): Collect CV, License, Diploma, and Malpractice COI immediately.
- Day 1: Apply for NPI and CAQH profile update.
- Day 7: Submit applications to all major payers (BCBS, Medicare, UHC).
- Day 30: Check status. If pending, initiate “Incident-To” protocols for Medicare patients.
- Day 60: Implement “Cash-Pay Bridge” for commercial patients if approval is delayed.
Need help speeding this up? Our Credentialing Services can shave weeks off the process.
Frequently Asked Questions
What if the new doctor is already credentialed at another practice?
They still need to be “linked” to your Tax ID. This is faster than a fresh application (usually 30-45 days) but they cannot bill under your group until the link is confirmed. See our guide on re-credentialing.
Can I bill “incident-to” for commercial payers?
Some commercial payers recognize incident-to, but many do not. You must check your specific contract or provider manual for each payer (e.g., BCBS often requires the treating provider to be credentialed).
Does the Q6 modifier work for Nurse Practitioners?
Generally, no. The Locum Tenens (Fee-for-Time) rules specifically apply to physicians (MD/DO) covering for other physicians. Mid-level coverage rules vary by state.
