123s of Locum Tenens

December 19, 2022

As the COVID-19 pandemic exposed vulnerabilities in the health care system, the reality of physician shortages became apparent. These ongoing physician shortages are not expected to go away anytime soon – in fact, the Association of American Medical Colleges predicted a shortage between 37,800 and 124,000 physicians in the next 12 years. Using locum tenens is one of the ways in which the health care industry is trying to alleviate some of the difficulties brought on by these shortages.

Locum Tenens Meaning

Locum tenens is a Latin phrase that means “to hold the place of.” Essentially, a locum tenens does temporary health care work. Oftentimes, locum tenens are sent to remote areas where the local supply of health care professionals is lacking or where a vacancy needs to be accommodated for a short period of time.

Who Are Locum Tenens?

The Centers for Medicare & Medicaid Services (“CMS”) uses the term locum tenens to refer to substitute physicians who take the place of a permanent physician’s role for a period of 60 days or less. To be eligible for Medicare reimbursement for a locum tenens, the locum tenens can only be a physician and not a PA, NP, or any other health care professional.

However, the term locum tenens, not in the context of Medicare, is now colloquially understood to mean short-term physicians, PAs, NPs, and other health care professionals providing services on a contractual basis for a specific period of time.

A locum tenens is different from a PRN because a locum tenens is a substitute health care professional who has guaranteed hours and works in a full-time capacity for the specified time period. A PRN is not guaranteed hours and usually works by picking up shifts.

Are Locum Tenens Employees or Independent Contractors?

Locum tenens usually work as independent contractors, not employees. They typically contract with a third-party locum tenens company, which will find either practices or hospitals suitable for the locum tenens. Locum tenens companies are also normally responsible for determining the locum tenens’ pay.

What Benefits Does an Employed Locum Tenens Receive?

Because locum tenens are essentially independent contractors, they typically have to pay their own taxes and have little to no benefits.

Who Covers the Locum Tenens’ Malpractice Insurance?

The locum tenens company may provide malpractice insurance, pay for travel expenses, and offer an hourly rate.

How Can I Make Sure That the Locum Tenens Will Be Available When I Need Them?

This typically will not be an issue because they are hired on a short-term contractual basis.

Potential Disadvantages When Using a Locum Tenens

One major disadvantage if your practice decides to bill for locum tenens under Medicare, is that the locum tenens can only work for 60 days or less to receive reimbursement. This 60-day limitation is specific to physician services to Medicare patients because a locum tenens physician would be billing using the National Provider Identifier of the permanent physician whom the locum physician is substituting.

Many of the disadvantages of locum tenens are from the perspective of the hired locum tenens. For example, a locum tenens would not enjoy job security and does not receive the benefits that regular employees do.

How Can Hiring Locum Tenens Help My Medical Business?

Locum tenens can help your practice in a variety of ways. For example, a locum tenens could cover an extended leave of absence of permanent employees. They can also provide support in unexpected or catastrophic events, just as many did during the COVID-19 pandemic. Locum tenens could also be used to prevent physician burnout by using locum tenens to give the permanent physicians time off. Locum tenens are also important in treating the broader problem of a doctor shortage.

Contact ByrdAdatto

Locum Tenens can be advantageous to a practice or medical business, reducing scheduling stress and even allowing expansion. However, as an employer, the practice will need to set up its own contractual relationships with the locum tenens and avoid liability pitfalls that can arise from the locum tenens’ work. Having a firm on your side that can help you manage these aspects is essential. If you are considering hiring locum tenens, contact us at info@byrdadatto.com to set up a consultation.

We are grateful for the significant research and drafting contribution to this article from our Law Clerks, Abi Altick and Emily Reese. Abi and Emily are students at SMU Dedman School of Law.

ByrdAdatto attorney Grace Lee

Grace Lee

With a financial background from working at a Fortune 500 investment, Grace Lee started her legal career in complex commercial and business litigation.