Vlad Dzhashi, MD
Today, I am going to teach you how to glance at and make sense of the locum tenens agreement in less than a minute.
You may be thinking: I’ve got better things to do with my life than reading “stupid” contracts.
Wrong!
The truth is that you ALWAYS have to look at the contract. Medicine is a risky business, so you want to cover all your bases!
Now, this post is not going to make you a contract lawyer. Instead, it will give you a perfect recipe on where to look for potential “red flags,” and you’ll learn a simple way to quickly scan locum tenens agreements.
I’ll also give you examples from real-life contracts. This way it’s going to be easy to make sense of the confusing legal jargon. (BTW, you won’t find this info anywhere else on the web!)
I mention another important hack in this post: keywords that you can search within a contract document (typically a pdf file or webpage) and find the exact section you need to review it super fast.
Disclaimer: I am not a lawyer, and this article is just for self-education purposes. It’s not meant to replace professional advice. Consider getting legal consultation for detailed contract review.
What is a locum contract?
A locum contract is the work agreement between a physician and a locum tenens company or a hospital/clinic. At the core, it’s a contract a physician independent contractors sign with their temporary employers that determines how much they will be paid, contract termination, and other important clauses.
Now, let’s look at all the “moving parts” of the locums agreement in more detail.
malpractice insurance
The standard type of malpractice insurance hospitalists get is claims-based, which means you are covered only when both the incident and the claim (when they actually sue for that incident) happen when the policy was active.
Since you may stop working with the locum agency at some point or they could go out of business, it’s important that you get a guaranteed “tail.”
This would extend the locum tenens malpractice coverage for all the incidents, regardless of when the legal claim was made.
How much coverage is enough?
$1M/3M is a standard for hospitalists. The first number ($1 million) is how much is covered for each particular incident. The second number ($3 million) is how much total coverage you get.
The more the better, but anything less – no bueno!
Here are some examples of coverage terms:
1 – “Company shall provide professional liability insurance coverage for each Physician to cover all incidents which may occur during an Assignment, in limits of $1,000,000 per incident and $3,000,000 in the aggregate.”
2 – “Provider will be insured under the terms of “Agency name” group professional liability insurance policy or similar professional liability insurance provided by Client (i.e. hospital).”
3 – “Professional liability insurance will cover Provider, for a medical incident arising out of Provider’s rendering of, or failure to render, professional services while working on an Assignment. Upon expiration of the policy, “Agency name” will purchase group tail coverage or prior acts coverage with the new policy.”
4 – “Company will procure professional liability insurance, including post-termination continuation coverage or tail coverage, as applicable, based on Company’s insurance policy.”
TIPS:
♦ For malpractice coverage, look for $1M/3M.
♦ For claims-made insurance, make sure you get a “tail” coverage.
♦ Keywords for quick “scanning”: malpractice, liability, insurance, tail, coverage, policy.
SHIFT CANCELLATION OR OUT CLAUSE in locum contract
You can typically cancel any shifts 30 days in advance, and the same goes for the hospital you work for.
Here, you need to make a note of the time frame required for termination and how termination is made – written, via phone call, etc.
Here are examples:
1 – “At all times during the Term of this Agreement, this Agreement may be terminated without cause or liability by either party upon thirty (30) days’ prior written notice to the other party.”
2 – “If Physician is not able to fulfill an assignment they have accepted, then Physician will give at least thirty days’ notice.”
The next important thing is to look at what happens when you cancel less than 30 days in advance.
Here you need to avoid the “strict lingo,” e.g:
If you fail to comply…you shall promptly pay to “Agency name” a cancellation fee equal to…”
or
“Provider will be charged for Company’s unrecoverable expenses.”
You should have wiggle room in the contract to get you off the hook if you have a legitimate excuse to cancel your shifts: e.g., illness, family emergency, etc.
Here’s an example of better wording:
Professional may cancel any scheduled placement less than 30 days in advance by giving written notice…if Professional becomes unable by reason of emergency or medical condition to fulfill an agreed placement.”
or
“If Physician becomes incapacitated or otherwise physically unable to perform Services…Physician’s cancellation shall be in writing.”
TIPS:
♦30-day cancellation window is a standard.
♦Avoid “strict” cancellations.
♦You should able to cancel any time in the event of sickness, emergency, etc. Consider adding this to the contract.
♦Keywords for quick “scanning”: cancel, schedule, notice, term.
- Jumpstart your Locums Career!
- Sign up for my coaching to access:
- Top Gigs
- Top Pay
- Unique resources
- No stress
- Jumpstart your Locums Career!
- Sign up for my coaching to access:
- Top Gigs
- Top Pay
- Unique resources
- No stress
NON-COMPETE CLAUSE in locum tenens contracts
In a nutshell, the non-compete clause in locum tenens contracts doesn’t allow you to work with the hospital through another locum company or directly for a certain period of time.
Here, you have to make sure the term is no longer than 2 years after the official end of the agreement.
Let’s look at one example:
Physician may not solicit or contract with Client or any of its affiliates…for temporary staffing assignment nor accept a permanent position…”
TIPS:
♦The non-compete clause should not be longer than 2 years after contract termination.
♦Keywords for quick “scanning”: non-compete, covenant, clause.
TERMINATION and RENEWAL of locum tenens physician contract
You should be able to terminate the locum tenens agreement any time with a 30-day written notice. It means that you officially “break up” with an agency.
But why would anybody need to do it?
Because if you don’t, it will be auto-renewed. So even if you don’t work with the agency for a while, you are still in a binding relationship with them, including the non-compete clause.
Why is this important?
A few years after my last shift at one local hospital, I decided to pick up some shifts there again. This time I wanted to connect with them directly to have a long-term locum tenens hospitalist gig close to home.
Guess what?
Since I didn’t terminate my contract with an agency that placed me there in the first place, I either had to use them again (which kills the point) or terminate my agreement and wait for 2 years.
Another example: if your agency loses the contract with the hospital, a non-compete clause will not allow you to work at that facility either as a per-diem or through another agency’s services.
In my situation, I ended up terminating my contract and had to wait for the 2-year non-compete clause to expire.
TIPS:
♦Keep in mind that a locum tenens contract is auto-renewed unless you terminate it.
♦Terminating the contract will cancel the “non-compete” clause typically in 2 years.
♦Keywords for quick “scanning”: automatically, renew, terminate.
Sample locum tenens contract template:
If you want to dig a little deeper and actually look at a sample locum tenens contract, you can check out this resource. Although this agreement seems to be much shorter compared to the ones I’ve signed in the past, it has all the important parts in it.
CONCLUSION: reading a locum tenens physician agreement
Now you know the quickest way to scan through the locum tenens agreement.
The good news is that your contract is always negotiable. So if you’ve noticed anything you want to be changed, do not hesitate to reach out and request it.
If you are too lazy to dig through the contract yourself, just ask your agency/hospital to point specifically to the important sections I mentioned.
At the end of the day, it doesn’t matter how you do it. Just do yourself a favor – ALWAYS review your agreement!
Hi, I was approved to work for a locums group (D&Y). Even credentialed and accepted by the hospital. Based on this, I rented a house in the same town with one year lease. The locums company backed out of the contract two days later! They say the hospital is going with in house doctors instead (which isn’t the case). I think they found someone to work for less. Do you think I have any legal recourse ? I’m stuck with $3000 rent for a year. Other locums groups are calling for same contract but say they can’t use me because I signed with D&Y even though I never worked for them! Thank you