What is a Locum Tenens Agreement?
A locum tenens agreement is a legal contract between two parties—the "substituting" or "primary" practitioner, and the locum tenens practitioner. This type of agreement allows a healthcare facility to ensure that patient care does not suffer as a result of physician absences while also removing the necessity to employ a physician for a limited period of time. Locum tenens agreements are most commonly used by physicians who are entering into a contract with a healthcare facility. When a locum tenens practitioner is hired, they agree to fill in for the primary practitioner in cases of absence.
In order for a locum tenens agreement to be active, in most circumstances the primary practitioner must notify the healthcare facility in the event of their absence. There are three main scenarios in which a physician would have to notify their healthcare facility: vacation, illness or disability , and professional development requirements. Professional development may include continuing education or vacations where a physician agrees to temporarily "retire" from their profession with the intent of reestablishing their status at a later date.
It is important to note that locum tenens agreements, by their very nature, are temporary and therefore are drafted to last for a period of weeks, months, or years, depending on the situation. Projects which require a "traveling" physician, such as education-based health initiatives in rural communities, are prime examples of situations that would benefit from a locum tenens agreement.
Within the healthcare field, locum tenens are generally used by physicians to fill in for an absent physician, but it’s important to note that this type of arrangement can also be used in other operator and non-physician roles. In recent years, healthcare providers have started to utilize locum tenens physicians and professionals in positions beyond those traditionally held by physicians.
Essential Terms in a Locum Tenens Agreement
An agreement between the parties must, of course, memorialize the terms of the relationship, but also the expectations of each party, which may not themselves be entirely contained within the four corners of the agreement itself. There are four key components to any locum tenens agreement, but it is critical that the parties work together to memorialize their individual expectations to ensure that both parties are on the same page. The agreement must address, at a minimum:
- (1) a set duration for the relationship between the parties and the specific details of the assignment in the agreement. The period of time that the locum physician will be employed can range from a few days to a year or more, but regardless, the initial term of the locum’s employment should be clearly spelled out. The scope of the services the locum physician will be required to perform, including whether the expectation will be for full-time or part-time employment and whether there will be a requirement for call coverage, should also be addressed. A locum physician may be required to cover for a physician who is taking an extended leave of absence or an extended vacation, and in such a case, the parties should ensure that the locum physician’s responsibilities are clearly specified to avoid any potential confusion down the road.
- (2) the amount and method of compensation. This term is critical to the agreement, and will depend largely on the type of employment relationship (i.e., whether the position is that of an independent contractor, employee, partner, or corporate officer). The parties should also specify how compensation will be paid, whether via a payroll check, or any other mechanism the parties may choose to implement. While many physicians will anticipate a commission-based structure to their income, those who occupy an owner role may have a different structure and it will important to clarify these expectations so that the physician has the right expectations relative to their income.
- (3) the parties’ respective responsibilities in relation to their business relationship. This goes hand-in-hand with the preceding component, but addresses the various job description-related duties the locum tenens will be required to perform as part of his position. When dealing with phones and emails, it may be beneficial to identify "normal" business hours when the locum will be expected to remain available to patients, even while they are not on call, in order to avoid any misunderstandings early on. What level of patient care does the locum physician expect to provide? Will he or she be expected to hire their own support staff (nurses, secretaries, etc.)? Any detail that may affect the operation of the business and the relationship between the parties should be addressed in the agreement.
- (4) the means by which the agreement can be terminated. As such, the contract typically includes a termination clause that specifies the periods of notice required for the parties to end their employment relationship—and depending on the parties’ preferences, this could range from 30 days to several months. It may be beneficial for the parties to specify what events are considered "cause" for early termination of the agreement (e.g., failure to obtain or renew licensure, failure to meet malpractice insurance requirements, etc.). Also, will the parties have the ability to end the relationship without notice in the event of a breach of the agreement? There are a variety of issues that can arise and should be considered, such as whether there are reasonable fines for the breach of the agreement, notice and cure periods for any violations, or if the parties would have the right to pursue injunctive relief.
While this information is not intended to be exhaustive, it is designed to give you a brief overview of the kinds of provisions you will want to have included in your locum tenens agreement. By being as thorough as possible, you will be positioned better to avoid disputes between the parties as to the terms and conditions of the relationship, thus ensuring that there will be no confusion going forward.
Advantages of Doing Locum Work
The flexibility of locum tenens work is one of the main appeals for many health care professionals. For example, locum tenens positions might be ideal for physicians just starting out or those who have recently relocated. Locum tenens positions also provide health care professionals with an opportunity to explore new parts of the country without making a lasting commitment to any specific provider or practice. Some healthcare providers choose to engage in locum tenens work on a temporary or part-time basis to augment their full-time roles.
In addition, locum tenens rules vary by state, giving healthcare professionals the opportunity to practice medicine without the hassle of receiving multiple licenses. Many locum tenens positions don’t require continuing education, which can ease some of the stress of discovering and completing necessary courses and programs every two years.
For many professionals, locum tenens work is an opportunity to meet peers within their specific area of practice. In fact, many locum tenens physicians have claimed that their local network of colleagues is more extensive than their professional network back home. From attending local health fairs to simply getting to know peers or completing a mentor agreement, locum tenens work can be an excellent way to foster relationships with colleagues in the same field.
Legal Issues in a Locum Tenens Agreement
Certain legal considerations need to be taken into account when negotiating, drafting and signing locum tenens agreements whether on the part of the locum tenens physician or the entity employing the physician. These issues relate to licensure, malpractice insurance and work regulations.
Licensure Issues. Usually the locum tenens physician must have an unrestricted license to practice medicine in the state in which she will be practicing. Some states, however, allow locum tenens physicians with limited licenses to practice medicine as a locum tenens in their state. Some states allow physicians with restricted volunteer licenses to practice as locum tenens physicians. In such cases, the scope of practice for the physician will be limited to patients with whom the physician has an existing physician/patient relationship. Further, the number of days that the physician may practice is also limited. Some states, such as Illinois, require a supervising physician with an unrestricted license also be licensed in Illinois. Many states also require the locum tenens physician to provide notice of his or her service within 30 days . Also, in most states, if the locum tenens service include supervising allied health staff, the physician must have a supervisory agreement with the staff member.
Malpractice Insurance Issues. Locum tenens physician(s) should always confirm that they are covered under the locum tenens employer’s malpractice insurance policy during the entirety of the assignment. But it is equally important for the locum tenens physician to additionally review the state’s regulations to ensure that he or she is covered under the locum tenens employer’s malpractice insurance policy if he or she is practicing under a limited or restricted state license as a locum tenens physician. Many licensure boards prohibit the requirement for locum tenens physician(s) to carry their own liability insurance.
Work Regulations. In addition to licensure and malpractice insurance requirements, it is necessary for the locum tenens physician(s) to adhere to the employing entity’s policies and procedures. For example, the locum tenens physician(s) will generally be subject to the employing entity’s corporate compliance plan and other institutional policies and procedures.
Issues Faced By Locum Tenens and Possible Solutions
One of the most common issues faced by healthcare professionals and employers is misunderstanding the role of a locum tenens physician. Locum tenens is not a system that allows a physician to work at multiple locations. If a physician is seeking to practice at several different facilities, they may need to consider alternative options. Such arrangements would require coordination between the physician, multiple medical facilities, licensing/state board approval, credentialing, and privileges.
Another drawback for some individuals and businesses is the nature of the locum tenens agreement as a temporary or interim arrangement. The parties may have to address concerns regarding long-term care when they have relied upon locum tenens physicians who provide interim services for several months or years. This can require difficult conversations with respect to transitioning to an appropriate practice model, training replacements, and addressing employee or staffing issues. Employers may find it beneficial to develop a long-term plan for how to deal with these potential issues, in the event they need someone to step in while they search for permanent primary or specialty physicians.
Another potential problem that could arise is a basic misunderstanding of the compensation structure. The compensation paid to a locum tenens physician may look different from a traditional physician agreement and, as a result, some health care professionals may expect payment on a salary basis or under a different method than what the employer can offer. In order to understand the assumptions and expectations of the compensation structure, it is important that parties spell everything out within the agreement. Put as many details as you can think of into the document that will avoid misunderstandings and errors.
Negotiating a Locum Tenens Agreement
Like any contract, your locum tenens agreement is an asset that you have the right to pursue the most favorable terms of. While many locum tenens contracts have evolved over time to provide more basic protections and considerations for the physician, there is still the possibility that you may come across an otherwise deficient contract that you want to negotiate.
In our experience, the main areas of concern when it comes to negotiating locum tenens agreements are:
Compensation: In recent years, locum tenens compensation has been relatively high, but market fluctuations can occur that affect compensation levels. One good way to stay at the upper-end of your pay scale is to negotiate specific compensation increases into your contract. Work Schedule/Workload: Today , many locum tenens providers enjoy the benefit of work schedule flexibility, as long as they are able to cover their patients’ needs. In addition, your overall workload plays a significant role in your overall work satisfaction and compensation. When negotiating your contract, be certain to include agreements as to the number of scheduled shifts, weekends, and on-call hours that you will be expected to work. Indemnification/Insurance: The indemnification provisions in a locum tenens contract may set you up for liability that could result in you becoming financially responsible for the malpractice of other persons. Your agreement should be crafted so that it protects you from third-party liability, while also sufficiently covering yourself in the event of providing negligent healthcare services.
+ There are no comments
Add yours