How strategic use of locum tenens can drive revenue and keep care local

There’s a common misconception that locums are too expensive. In fact, the opposite is actually true: When health systems optimize payer enrollment to consistently enroll locums with insurers, they can, on average, generate four times their locums spend in gross billables. Here's how to craft a locum tenens staffing strategy that prioritizes access to care while also generating the revenue needed to keep your business running.

How a solid locum tenens strategy makes a difference

Locums can make a significant difference at a rural hospital in many ways, from preserving access to care for vulnerable populations to reducing burnout among staff. Here are some of the primary ways locums can positively affect your organization.

Service lines stay open. Losing even just one clinician can result in the closure of an entire service line, and locums can help maintain service and the associated revenue.

Case in point: By 2022, three-quarters (73 percent) of North Dakota hospitals had closed their obstetric units, primarily due to a lack of OB-GYN physicians. Because rural OB-GYN vacancies can take six to nine months to fill, a rural hospital can lose more than $2 million in gross billable hours over a typical vacancy period. However, bringing in a locum OB-GYN allows a hospital to maintain its maternity services.

Seniors keep care access. Older individuals with limited transportation can continue to receive care close to home, reducing avoidable deterioration and eliminating missed or delayed appointments.

Burnout decreases, recruitment improves. As vacancies remain unfilled, staff begin to burn out and leave. Locums provide immediate relief. As a bonus, candidates considering rural positions are more likely to accept a job when they see reliable coverage and sustainable workloads.

Efficient payer enrollment preserves revenue. When processes are streamlined and locums are enrolled with payers from day one, locums become a revenue generator. A 120-day delay in enrollment can cost a hospital more than $122,000 in missed income per physician.

An expanded recruitment pipeline. Locums help solve the problem of attracting physicians who have never considered rural practice. Short-term assignments allow providers to experience working in a new environment and determine whether rural medicine is a good fit.

That approach works: After the sudden turnover of its three-member neurosurgery team, a New Mexico rural health system program maintained 95 percent capacity for two years with locum neurosurgeons. One of those locums eventually became the permanent program director.

Locum tenens best practices for rural systems

Many smaller hospitals treat locums as a last-resort coverage option, calling agencies only after a clinician has left. That approach almost always incurs higher costs in the long run. Taking these three actions will ensure your locum strategy is effective.

1. Start before a vacancy occurs

Pre-credentialing locums helps build a pool of providers who can step in during unexpected departures. One rural hospital placed a credentialed locum in the same week a clinician unexpectedly retired, saving hundreds of thousands of dollars over just two months.

2. Enable day-one billing for locums

The most forward-thinking systems ensure every patient encounter with a locum provider is billable from the start. Start locum tenens enrollment alongside credentialing. Prioritize the highest-volume payers and correctly apply codes. When enrollment is built into the deployment plan, locums aren’t placeholders. They’re contributing revenue from the moment they walk in.

3. Integrate locums into the clinical team

Bring locums into the fold right away. Include them in workflow briefings, provide timely EHR access, and introduce them to the community. Unfortunately, many health system leaders view a locum as a temporary employee rather than a valued member of the community — and certainly not as a strategic asset who can strengthen the organization over time.

Practical steps for rural leaders

Rural hospitals don’t need a complicated overhaul to make locum use more effective. Here is a simple workflow process to get started.

• Designate a single owner for locum payer enrollment and align locum onboarding protocols with existing FTE processes.
• Identify and prioritize staffing needs, assessing current staff structure, turnover rates by department, and future demand.
• Assess organizational baseline by calculating the percentage of active locum physicians and audit enrollment gaps by specialty and payer.
• Track gross billables, enrollment status, and physician productivity.
• Standardize the billing process for locums. Develop a standardized billing packet for each locum physician and consistently use Q6 modifiers, form CMS-855I, and group codes.
• Evaluate and refine processes to update strategy and align with seasonal needs.
  
  

Rural hospitals can mitigate challenges by planning ahead

Because it’s so important for rural hospital systems to maintain continuity and stability, locums treated as temporary fixes fail to deliver either. However, when hospitals incorporate locums into their workforce plans, they maintain service lines, protect operating margins, and provide clinical teams with the necessary support.

NRHA adapted the above piece from CHG Healthcare, a trusted NRHA partner, for publication within the Association’s Rural Health Voices blog.
 

Melinda Giese has over 30 years of expertise as senior vice president of enterprise client solutions at CHG Healthcare. She has spent her career partnering with clients on strategic and innovative strategies that stabilize and grow their business. With experience representing payors, providers, health care organizations, and government entities, she is able to see health care from every angle.