Physician Compensation & Agreements

Locum tenens agreements are usually straightforward due to the short-term nature of the assignment and contractor status, however it is still important to review the agreement carefully. Some important areas of agreements are:

Blank or custom agreement: Some agencies use a generic contract to cover all placements over the course of a year or two. In this situation, the details of each engagement should be outlined in a separate acceptance letter. Other agencies submit a unique agreement for each engagement. It is important to know and make note of the length of agreement

Malpractice Insurance: Be sure to note if malpractice insurance is provided at the agency’s expense. Good quality professional liability policies are extremely important for locum tenens physicians. A good quality indicator of an agency is if they are a member of the National Association of Locum Tenens Organizations (NALTO)

Non-compete: A standard procedure in the locum tenens industry is having the locum tenens physician sign a non-compete clause. This ensures that the hospital or group pays a recruitment fee to the agency if the locum tenens physician accepts a permanent position within a certain period of time. A non-compete clause may also state that if a locum tenens physician works in a particular location with a specific agency, the physician cannot work at that location within a certain period of time with another agency

Payment: When and how a locum tenens physician gets paid should be spelled out in the agreement. The agency will ask for hours or days worked, oftentimes in the form of a time sheet. To ensure timely payment, the locum tenens physician should provide this information as soon as possible. The independent contractor status makes physicians responsible for their own income taxes, including self-employment tax.

Expenses: The agency’s policy should underline details about which expenses are covered by the agency, facility or the physician. It is important to keep receipts for all travel expenses.

Cancellations: Each agency will handle cancellations differently so it is important for a locum tenens physician to understand what his or her responsibilities are in the event of a cancelled agreement — whether it is cancelled by the physician or hospital/group.