What Is a Locum Agreement
A locum agreement is a legal contract between two parties that serves the purpose of providing temporary cover for the job roles held by specific employees in certain healthcare facilities. These contracts are useful in numerous scenarios as this condition of cover allows healthcare businesses to maintain patient treatment and care at a level which would otherwise be impossible were it not for the expertise of the locum tenens staff members employed through such agreements.
Both locum staff and the healthcare businesses wishing to hire them have a number of things to think about before they come to an agreement, including the duties and responsibilities expected to be carried out by the locum and their duration , the method and timetables by which they will be suitably reimbursed for their time, and how much time the agreement will run for in total (and what happens in the event that either side wishes to terminate the contract early). In short, a locum agreement is designed to keep the professional relationship between both parties as orderly and healthy as possible, so that all sides are clear on their own individual rights as well as those of the business in general, and can therefore reduce the chances of any disputes arising over unpaid hours or additional responsibilities the business may choose to delegate to the locum staff.
Key Provisions in Locum Agreements
These agreements typically include several fundamental clauses. Not all of these are required, but all are advisable. Here are brief descriptions of some of the key clauses, the recommended language, and some comments on why this is so important.
1. Duration of Agreement
The start and end dates of the locum’s work with the physician/employer should be specified. Sometimes a physician will use a locum for several months to cover an extended absence or illness. Examples of acceptable language to use are:
The Locum agreement will be effective from March 20, 2006 to June 30, 2006.
This Agreement has a duration of one year, beginning on January 1, 2006 and ending on January 1, 2007.
This agreement will begin on February 1, 2006 and run through the last day of the 2006 calendar year.
2. Cancellation Provision
It is not uncommon for the physician/employer to first think of hiring a locum tenens to fill in during an extended absence, but later cancel the agreement if he or she decides to cut their vacation by a few days or choose to have another physician cover a short absence. The cancellation provision should set forth the terms under which the agreement may be cancelled early.
Example of acceptable language to use are:
Either party to this Agreement may terminate the Agreement upon 30 days advance written notice to the other party.
This Agreement shall be terminable at will by either party upon two weeks written notice to the other.
3. Responsibilities of the Locum
The contract should clearly specify the tasks that the locum is to perform. This may include office procedures and/or hospital procedures. Indicate whether the locum is expected to have or will have admitting privileges, and whether privileges need to be obtained before the effective date of the agreement or will be provided after the agreement’s effective date.
For example:
Without limitation, the Locum shall perform the following services:
Family Medicine
Internal Medicine
Obstetrics
Pediatrics
Psychiatry
Routine office procedures
Diagnosis and treatment of non-life threatening emergencies
Tight coverage is an essential element of a successful and profitable practice. Having the right locum in place during weekends and holidays will ensure that patients do not leave to seek out coverage elsewhere.
These provisions should be in the agreement for the sake of clarity and should be very specific. Unanswered or poorly written provisions make for very costly misunderstandings and lost patient revenue.
Important Legal Considerations
It is not uncommon that the locum tenens physician will be required to provide proof of malpractice insurance prior to assuming responsibilities at an employer’s facility. An increasing number of state licensing boards require locum tenens physicians to have current malpractice insurance coverage. For this and other reasons, a policy that provides coverage on an occurrence basis is preferred to a claims made policy. Any malpractice agreement should be read carefully to determine if there will be portable coverage. The physician should take steps to ensure that there are no gaps in coverage based on when services are rendered. The agreement should also indicate whether there is ‘tail’ coverage if the locum tenens physician provides services during the term of a claims made policy.
Other important legal considerations focus on what happens if the physician with whom the locum tenens physician has agreed to replace is not terminated. A physician may be under investigation by disciplinary authorities, so the locum tenens physician may want the insurance policy to include coverage for any disciplinary actions brought against the physician who is being replaced. Additionally, a change of ownership may void the locum tenens physician’s benefits under a liability policy if the agency or staffing company who placed the physician and the physician entered into a policy that benefits only them as long as they show a contractual relationship. Some locum tenens physicians work under vendor agreements, while others work under a physician employment agreement. Status as an employee has been a factor in some cases by which the courts have determined whether the locum tenens physician has coverage under the staffing agency’s policy. The agreement should clarify the manner in which the physician should be paid, whether through the facility or a staffing agency. If a staffing agency acts as a third party administrator, it will be important to determine whether the administrator is adding the physician as an insured or whether the staffing company is acting under a pure administrative contract.
Negotiating a Locum Contract
When it comes to forming a locum tenens agreement, whether you are a locums professional or the healthcare facility seeking a contract, don’t be afraid to present what you want and ask for what you think is fair, especially regarding a rate. While you cannot offer a higher amount than your medical or dental board allows, often, healthcare facilities are willing to negotiate, especially given the shortage of many types of healthcare providers.
Hire a good attorney. While this may seem like an easy task for a locums professional, finding counsel that understands locums agreements can mean the difference between enjoying the most lucrative deals possible and possibly accepting less than what they are worth.
Do your research. Setting a reasonable rate meant that you need to understand what others with your training , experience, availability, etc. are being paid. Your attorney can help determine what a fair rate is, as well.
Inform the facility of your offerings. Start out by letting a prospective employer or facility know what you have to offer in terms of availability and expertise. Show your willingness to go above and beyond what they might expect from a locums professional at the outset and remind them of this throughout your time there, if necessary.
Be upfront about your concerns. If there is something that bothers you about the deal or what is expected of you in the position, be sure to mention it as soon as possible. Communicating concerns quickly can mean an early resolution that works for both parties.
Common Pitfalls to Avoid
Several common pitfalls arise when parties enter into locum agreements. First, some locums don’t understand the terms of the agreement they are entering into. For example, some locums fail to recognize that they will be working as an employee of the hospital for the duration of their assignment, rather than as an independent contractor. To avoid such mistakes, have your attorney explain the terms of the agreement before signing. If you have a concern about any specific term, raise the issue with the hospital and have an attorney suggest alternative language.
Another potential pitfall includes accepting a position with no written agreement in place. More hospitals have begun entering into Agreements when hiring locums. For those hospitals that still use unwritten agreements, the locum should request a written agreement in order to avoid any disputes relating to the terms of the "at will" nature of the position and the amount of notice required before a locum can discontinue employment.
It is typical in some states for hospitals to invite the newly hired physician or locum to speak with their personal attorney before signing an agreement. This is a good practice and should be encouraged.
Also, it is advisable to limit your liability by keeping your malpractice insurance policy active even while you are working at a locum position.
The Direction of Locum Agreements
As the healthcare landscape shifts and evolves, the role of locum tenens physicians continue to play a critical role in maintaining patient care and hospital operations. Amongst the major challenges confronting healthcare today, the shortage of healthcare providers is at the forefront. Whether a result of an aging physician base, increased retirement rates, or stresses placed on new generations of doctors, a shortage of healthcare professionals has created a burden on many hospitals and health care facilities. Based on a survey by the Association of American Medical Colleges, by 2020, the primary physician shortage may exceed 90,000, whether measured against the national need for physicians or to generate sufficient time for each patient. To address this shortage, hospitals desperately need additional physicians to fill the gaps. Enter: locum tenens providers.
As hospitals more heavily rely on locum tenens physicians to fill vacant or vacant positions, the opportunities for locum tenens companies to partner with hospitals have multiplied. The quality of the locum tenens services and relationships are only as good as the contracts between the locum tenens companies and the health care facilities. Accordingly , as concerns mount regarding the credentials and licensure of physicians, and patient care and safety concerns peak, the role that properly crafted locum agreements play in meeting the relevant standards is undeniably essential. As these relationships continue forward, locum tenens agreements will likely evolve to reflect the following trends:
As a result of the increased demand for locums, it is likely locum tenens providers, locum tenens companies, and health care facilities will face increased scrutiny on whether locum tenens providers are properly credentialed, trained, and insulated by effective indemnification provisions. The increase in scrutiny will likely occur on all sides: hospitals simply want to ensure they are hiring competent physicians to care for their patients, locum tenens companies need to ensure they are protecting themselves from liability and are increasing profits, and physicians want to be sure they are competent and protected from liability for poor care by their employers and insurers. But one thing is for sure, as we look to the future, an influx of locum tenens agreements will inevitably follow.
