Anatomy of a Locum Tenens Contract: A Primer for Residents

Signing a contractDid you know the way a locum tenens contract is structured can vary from one staffing company to the next? Here, we highlight the essential components of an agreement to help you navigate the paperwork (as well as the locum tenens career alternative) post residency.

Contract Terms

Some firms elect to use a comprehensive one- or two-year agreement through which some terms are agreed to in advance of placing a clinician on assignment. This type of contract is supplemented by an individual letter of acceptance for every opportunity accepted. In each case, the letter, which will contain details and requirements for the given locum tenens job, should be carefully reviewed before putting pen to paper.

Other agencies opt to prepare an exclusive agreement for every locum tenens opportunity a provider takes. In either case, when a clinician signs a contract, he or she is committed to satisfying the specified opportunity for the agreed duration.

Still, while the composition of a contract can differ, it’s important to note the components that comprise a locum tenens agreement are quite universal.

Non-Compete Clause

Fairly standard, a non-compete clause is included in most agreements, and it is basically two-pronged. First, the provider agrees he or she will not accept an offer of permanent employment from the assignment facility within a defined geographical area for a set time after the contract concludes—unless the hospital, group, clinic, or health system pays a fee to the locum tenens staffing company.

In addition, the clinician concurs he or she will not perform locum work at the assignment facility through another locum tenens staffing firm for a specified period following the expiration of the contract.

Malpractice Insurance

While malpractice insurance coverage is standard in locum tenens contracts, its terms and limits can differ by company.

Medicus, for example, provides a $1 million/$3 million claims-made policy and tail coverage—which will protect a clinician financially for malpractice claims made after the policy period ends, but for incidents that took place during the contract. This means the provider will be covered up to $1 million of a single claim and an aggregate total of $3 million over the life of the policy. Policies typically have a 12-month term.

A claims-made policy is the type of coverage used by most carriers. Occurrence policies, on the other hand, provide coverage for incidents that take place any time throughout the policy period, regardless of when a claim is reported to the insurance company. This coverage is broad and while it is a possibility, it is rarely offered by locum tenens staffing agencies.

Compensation

The details of how and when a clinician will be paid should be outlined in his or her locum tenens agreement. Generally, providers are paid a daily rate based on a few variables, such as specialty and demand. Also, it is important to note that as an independent contractor, a locum tenens clinician is responsible for paying his or her own income taxes.

Before Signing the Dotted Line

  1. While locum tenens contracts are generally no more than a few pages long and easy to read, if a provider is unsure of anything, he or she should ask the recruiter to clarify conditions and address any issues before making a commitment. Having a lawyer/legal professional also review it may be prudent.
  2. The clinician should ask questions about contract terms and restrictions.
  3. If changes are made to the contract during negotiations, the provider should make sure the written contract reflects those revisions.
  4. The provider should make certain he or she understands the non-compete clause.
  5. Speaking to an accountant/tax professional who specializes in serving locum tenens providers can ensure the provider is prepared before tax time hits.

Call Medicus Healthcare Solutions at 855.301.0563 to explore locum tenens opportunities with an experienced recruiter, and read our blog posts for tips, the latest news and trends, and other helpful information.

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