Considering Locum Tenens? Freedom, Good Pay, and Some Risks

Neil Chesanow


March 08, 2017

In This Article

Negotiating a Locum Contract

In addition to specifying your compensation, it's standard for a locum contract to specify that your round-trip airfare, lodging, rental car, and malpractice insurance are covered expenses.[16] Health insurance isn't included; that's on you. Nor will a locum firm take out taxes or federal withholdings from your paycheck. (For the locum tenens physician, paying your taxes on a quarterly basis may be preferable to receiving a large bill at tax time.) Food, gas for the rental car, and other expenses that are not reimbursed may be eligible for tax write-offs. You should probably consult with an accountant—and save your receipts.

There is probably some room for negotiation in your hourly rate.[16] Check one of the major physician compensation surveys to learn what the average salary is for your specialty. As a locum tenens, you may earn up to 30% more than the average rate, but you may need to weigh your desire for maximum compensation against the desirability of a given opportunity. Be careful not to price yourself out of the market, Dr Crawford cautions. The most desirable locum jobs are highly competitive and tend to go quickly.

Be sure to ask about call pay, Dr Crawford adds. You'll receive an hourly rate, but some employers won't compensate you for call. Will you be expected to work overtime? These details should be spelled out in your contract. One of the major reasons for physician turnover, he says, is dissatisfaction with compensation.

Some locum firms may ask you for your credit card number to purchase airline tickets and book a rental car, expenses for which you'll be reimbursed later, you'll be told.[14] Dr Cushing advises against doing this. "Later" can turn out to be weeks or months, he warns. Meanwhile, you are out the money. Make sure all your travel arrangements and expenses are itemized in the contract.

That includes lodging, which can vary widely.[14] Do you expect accommodations that are clean and private? That have air conditioning? That have a kitchen, or at least access to one? Eating out every night can get expensive. Make no assumptions. Whatever you expect in the way of living quarters should be itemized in the contract.

It is standard for malpractice insurance to be included. There are two types of malpractice coverage: occurrence and claims-made. Occurrence is preferred, Dr Crawford says, but it isn't available in every state. Occurrence coverage is complete when you purchase it.[17] When the policy is canceled, you're still covered for future claims on the basis of conduct that occurred during the policy term.

Claims-made policies provide coverage only as long as the insured—or in this case, the locum firm representing you—continues to pay premiums for the initial policy and any subsequent renewals.[17] If you're insured by a claims-made policy for 5 years and premiums stop being paid, you're no longer covered for any cases that the insurer didn't accept during the policy term. As such, if a claims-made policy is all that is offered, you should insist on "tail" coverage as well. This lets you continue to report claims after your claims-made policy is canceled.

The contract should also specify your coverage limits. Dr Crawford once advised a physician to turn down a locum assignment because the employer was only willing to cover him for $250,000 per occurrence, and $750,000 in aggregate. "If you get sued for $1 million, you will only be covered up to $250,000," he told the doctor. "What happens then? You've indemnified and held the employer harmless, so you're going to have to find a way to pay the difference."

Average coverage limits for medical malpractice insurance are $1 million/$3 million, Dr Crawford says. Those coverage limits should be stated in the contract.

When you sign the locum contract, it's binding. If you fail to meet your obligations, you could be sued.[14] This being the case, an "out clause" is standard in most locum agreements. This lets you leave early without penalty if the work environment was misrepresented and turns out to be intolerable.

Although the standard out clause is 30 days, Dr Cushing thinks it should be shorter.[14] "To keep yourself from being locked into a bad situation, try to have assignments limited to just 1 or 2 weeks initially, with an option to extend the assignment if you and the practice are compatible and pleased with each other," he advises.

For this reason, the contract should specify that your return flight is an open return. Otherwise, if you need to return before the locum assignment contractually ends, the cost of the return flight comes out of your pocket.


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