Anatomy of locum tenens contracts: a physician’s guide to understanding contractual provisions to maximize opportunities and minimize risks

Locum tenens work has a certain glow: new cities, new teams, fewer committee meetings, and (sometimes) the kind of schedule flexibility that makes your permanently employed friends stare into the middle distance. But here’s the plot twist: the “temporary” part of locums doesn’t make the paperwork any less real.

A locum tenens contract is basically your assignment’s operating manual. It defines what you’re doing, how you’ll get paid, who covers you if something goes sideways, and what happens if the facility suddenly decides they “don’t actually need coverage next week.” If you read it like it’s a menu (“I’ll take the hourly rate and… surprise me on the rest”), you can accidentally order the tasting flight of headaches.

This guide breaks down common contractual provisions in locum tenens agreements so you can maximize upside (great pay, good assignments, repeat gigs) while minimizing risk (unpaid time, liability gaps, restrictive clauses, and other contract jump-scares). Friendly reminder: this is educational information, not legal advice. When in doubt, a healthcare contract attorney is cheaper than a preventable mess.

1) What you’re actually signing (and why it’s rarely just one document)

Many locum arrangements involve a small stack of documents that work together:

• Master Locum Agreement (MSA) or Independent Contractor Agreement with the staffing agency (the “rules of the relationship”).
• Assignment Confirmation Letter (the “this specific job” details: dates, rate, schedule, location, call requirements, travel/housing terms).
• Facility policies and onboarding documents (EMR training, compliance attestations, credentialing packets, HIPAA acknowledgments).

Practical tip: if the confirmation letter says one thing and the master agreement says another, the contract should state which document controls. If it doesn’t, askbecause “we’ll figure it out later” is not a contractual strategy.

2) Parties, status, and scope: define the relationship before it defines you

Who are the parties?

Usually it’s you + an agency, and then the agency + the facility. Sometimes the facility contracts directly. Your contract should clearly identify the legal entities involved (not just a brand name) and which party is responsible for which obligations.

Employee vs. independent contractor (1099 vs W-2)

Locum physicians are often treated as independent contractors, but some agencies use W-2 employment models for certain assignments. Your classification affects taxes, benefits, and sometimes how liability and reimbursements work. The agreement should say:

• Whether you’re paid as a 1099 contractor or W-2 employee
• Whether you invoice, submit time sheets, or are paid per shift
• Who handles withholdings (spoiler: on 1099, that’s you)

If you’re 1099, plan for quarterly estimated taxes and keep clean records. If you’re W-2, confirm whether benefits apply (and whether the rate is different to reflect that).

Scope of practice and duties: the “what am I walking into?” clause

Contracts love vague phrases like “provide professional medical services.” You want specifics. Look for (or request) language that covers:

• Clinical setting (ED, inpatient, outpatient, urgent care, surgical coverage, telehealth)
• Expected patient volume, procedures, and any special skills required
• Supervision requirements (especially for certain settings) and who provides support staff
• Documentation expectations and coding responsibilities (if any)

Example: “Hospitalist coverage” can mean anything from a civilized census with good APP support to “you and a pager against the world.” If call coverage, admissions, ICU coverage, or procedures are required, get it spelled out.

3) Scheduling, call, and the time-tracking reality check

Scheduling language is where opportunity becomes either freedom or a scheduling-themed horror story. Your confirmation letter should state:

• Start/end dates, orientation requirements, and minimum commitment
• Shift length, expected number of shifts per week/month
• Call duties (frequency, response time, whether it’s in-house vs beeper call)
• Weekend/holiday expectations
• Overtime definition and whether it’s paid differently

Time sheets and approval

Many locum contracts pay based on submitted and approved time sheets. Watch for terms like “facility must approve time worked” and confirm:

• Who signs your time sheet and how quickly they must do it
• What happens if a supervisor is unavailable (common on weekends/holidays)
• Whether you’re paid if you worked but the facility delays approval

Pro move: know the submission deadline and keep copies. Your future self will thank you when someone says, “We never got that.”

4) Compensation: it’s not just the rateit’s the math around the rate

Locums pay can look straightforward (“$X/hour”), but contracts hide the important details in the fine print. Focus on:

Rate structure

• Hourly vs daily vs per-shift pay
• Different rates for nights, weekends, holidays
• Call pay (separate stipend? included in base rate?)
• Overtime definition (after 8 hours? after 40 hours? after scheduled shift?)

Pay timing and method

Look for: weekly vs biweekly pay cycles, direct deposit, and whether payment depends on facility payment to the agency. Ideally, your pay should not be held hostage by a slow-moving accounts payable department that believes urgency is a personality trait.

Guaranteed hours, standby, and cancellation pay

Ask whether there’s a guaranteed minimum for scheduled shiftsespecially if you’re traveling. If the facility cancels you last minute, is there a “kill fee” or guaranteed partial payment? If you’re required to be available (standby), is that paid?

Example: You fly in for four shifts. The facility cancels two due to low volume. Without a cancellation provision, you may eat the time (and potentially the travel disruption). With a cancellation/guarantee clause, you protect the economics of the assignment.

5) Travel, housing, and expenses: clarify what’s covered, what’s reimbursed, and what’s on you

Locums often includes travel and lodging support, but terms vary. Contracts should specify:

• Who books travel (agency vs you)
• Housing arrangements (provided housing, stipend, hotel, or reimbursement)
• Rental car vs mileage reimbursement vs rideshare policies
• Per diem rules and receipt requirements
• Licensing, credentialing, and background check feeswho pays?

Expense documentation and “double-dipping” traps

Most expense policies require receipts and pre-approval for certain costs. Also, if an expense is reimbursed, don’t assume it’s still deductibletax rules generally treat reimbursed expenses differently than unreimbursed ones. In plain English: keep your records clean and coordinate with a tax professional.

6) Malpractice coverage: the clause you read twice (minimum)

Locum tenens contracts must clearly state who provides malpractice insurance and what type of policy it is. This section deserves your full attention because it’s where “temporary assignment” meets “permanent consequences.”

Occurrence vs claims-made

• Occurrence coverage typically protects you for incidents that occur during the policy period, even if a claim is filed later.
• Claims-made coverage generally requires the claim to be made while the policy is activemeaning you may need tail coverage after the assignment ends.

Tail coverage: who buys it?

If coverage is claims-made, the contract must say whether tail is included, who pays for it, and under what conditions. Tail can be expensive, and the worst time to learn you’re responsible is after you’ve already accepted the assignment and spent the money you “saved” by not reading the malpractice clause.

Policy limits and exclusions

Confirm the liability limits (often written like “$1M/$3M”) and whether there are exclusions relevant to your setting (procedures, certain facilities, telehealth, etc.). Also check:

• Whether you have consent-to-settle rights
• Whether coverage includes legal defense costs and how they’re handled
• Reporting requirements if an adverse event occurs

7) Credentialing, licensing, and onboarding: time is money (and paperwork is time)

Credentialing delays are one of the most common locums stressors. Your agreement should address:

• Who is responsible for obtaining and paying for state licensure (including fees)
• Who manages credentialing and privileging paperwork
• Expected timelines and what happens if the start date slips due to credentialing delays
• Whether you’re expected to maintain specific certifications (BLS/ACLS/DEA) at your own cost

Example: If a facility’s credentialing committee meets monthly and your packet misses the cutoff, your start date can move by weeks. A smart contract clarifies whether you’re compensated for the delay (often not), and a smart physician plans accordingly.

8) Compliance, confidentiality, and documentation: yes, even locums has rules

Locum contracts typically require you to comply with facility policies, licensing rules, and confidentiality standards. Look for provisions related to:

• HIPAA and patient privacy
• EMR access and training requirements
• Quality and safety policies (incident reporting, supervision rules, controlled substances)
• Behavioral expectations (professionalism clauses can be broad; understand what triggers termination)

These sections often feel boilerplateuntil they aren’t. If a contract says “immediate termination for failure to comply with policies,” it’s fair to ask for access to those policies before you sign.

9) Termination, cancellation, and “name clearing”: your exit plan matters

Great assignments can end normally. Others end suddenly with a phone call that starts with “So… small update.” Your contract should define:

Termination for cause vs without cause

• For cause: loss of license, failure to meet credentialing requirements, misconduct, breach of policy, etc.
• Without cause: either party can end the agreement with notice (e.g., 7–30 days).

Notice periods matter. If the facility can cancel you with 24 hours’ notice but you must give 30 days’ notice, that imbalance should set off your internal risk alarm.

Facility cancellation terms

Confirm whether you’re paid if the facility cancels shifts, ends the assignment early, or reduces scheduled hours. If you’re traveling, advocate for a reasonable cancellation policy or guaranteed minimums.

Name clearing / reporting language

Some agreements address what happens if there’s a dispute, termination, or adverse credentialing actionsometimes called “name clearing.” You want clarity on due process, documentation, and how information is shared with licensing boards or future credentialing committees. This is one of those clauses you hope you never need, which is precisely why you want it to be decent.

10) Restrictive covenants: non-competes, non-solicits, and no-hire provisions

Restrictive covenants can show up in locum contracts, especially agency agreements. Common types include:

• Non-compete: limits where you can work (geographic radius + time period) after an assignment.
• Non-solicitation: prevents you from recruiting facility staff or patients.
• No-hire / conversion fees: facility must pay a fee if they hire you directly (common in staffing arrangements).

Reality check: the legal landscape changes by state

Non-compete enforceability varies widely by state, and healthcare-specific restrictions have increased in several places. Also, while a federal non-compete ban was proposed in recent years, court challenges and policy shifts have kept the practical rules largely in the state-by-state bucket. Translation: don’t assume a clause is unenforceable just because you saw a headline once.

Negotiation angle: If a non-compete is in the contract, push for it to be narrow (short duration, small radius, specific facility) or removed. If the agency is worried about being cut out, a reasonable conversion fee can protect them without blocking your future work.

11) Indemnification, liability allocation, and “hold harmless” language

Indemnification clauses determine who pays if there’s a claim or loss. Contracts sometimes try to shift broad responsibility to the clinician. Watch for:

• One-sided language where you indemnify everyone for everything (including their own negligence)
• Requirements that exceed what malpractice insurance covers
• Vague “hold harmless” clauses tied to facility policy violations you haven’t seen

A balanced approach typically ties your responsibility to your own negligent acts or omissions and keeps the facility responsible for its systems, staffing, and premises. If the clause reads like you’re also liable for the hospital’s HVAC system, it’s time to renegotiate.

12) Dispute resolution, governing law, and attorney’s fees

When disagreements happen, the contract tells you where and how they’re resolved. Look for:

• Governing law (which state’s rules apply)
• Venue (where disputes must be filed)
• Arbitration requirements (and who pays fees)
• Attorney’s fees provisions (winner-takes-all clauses can raise stakes)

If the venue is across the country from where you live and work, consider whether that’s reasonable. “Sure, I’ll just fly out for court” is not the vibe you want.

13) Red flags and smart questions that save you later

Common red flags

• Malpractice coverage is vague, or tail coverage is not addressed
• No clear cancellation policy or guaranteed minimums despite travel requirements
• Overly broad non-compete or restrictive covenant language
• Indemnification that makes you responsible for everything, including what you can’t control
• Schedule/call expectations that are “TBD” (translation: TBD = To Be Demanding)
• Payment dependent on facility payment to the agency, with no protection for you

High-value questions to ask before signing

• “Is malpractice occurrence or claims-madeand who pays for tail?”
• “What’s the cancellation policy if shifts are cut after I travel?”
• “How is call paid, and what counts as billable time?”
• “Who pays for licensing/credentialing, and what happens if credentialing delays push the start date?”
• “Are there any restrictions on working for the facility directly later?”
• “What’s the time sheet approval process if my supervising contact is unavailable?”

Conclusion: read like a clinician, negotiate like a grown-up, document like you mean it

A locum tenens contract isn’t a formalityit’s the framework that turns flexibility into a sustainable career move. When you understand the anatomy of the agreement (scope, schedule, compensation mechanics, expenses, malpractice, termination, restrictions, and liability allocation), you’re in control of the risks you’re taking and the opportunities you’re creating.

Read the contract the way you’d review a patient chart: look for missing data, conflicting statements, and hidden assumptions. Ask direct questions, get answers in writing, and don’t be shy about requesting edits. The goal isn’t to “win” negotiationsit’s to prevent predictable problems so you can focus on medicine, not paperwork drama.

Field Notes: of real-world contract lessons from locum life

Talk to enough locum physicians and you start hearing the same “I wish I’d known” storiesusually told with the tired laugh of someone who learned a contract lesson the hard way and now treats fine print like it’s a suspicious mole. Here are a few common real-world scenarios (anonymized and blended) that show why the details matter.

1) The cancellation clause that wasn’t. A physician accepts a two-week assignment with travel. The confirmation letter lists the schedule but doesn’t mention what happens if shifts are canceled. Two days before the first shift, the facility reports lower-than-expected volume and cancels several days. The physician is already committedflights booked, family plans rearranged, other work declined. Without a cancellation/guarantee provision, the “lost” shifts are simply lost income. The takeaway: if you’re traveling, the contract should protect at least part of the economics of that trip. Even a partial cancellation fee, guaranteed minimum hours, or a notice requirement can turn a painful surprise into an annoyance instead of a financial hit.

2) Credentialing delays that quietly eat a month. Another clinician signs for a start date that feels reasonableuntil they learn the facility’s committee meets monthly and their packet missed the cutoff by a day. The start date slides by weeks. Nobody is “at fault,” but the clinician still loses time they expected to be working. The best contracts don’t magically make credentialing faster, but they do clarify responsibility and communication: who’s tracking milestones, who’s paying fees, and whether the assignment dates adjust. The best physicians also build buffer time into their personal calendar because credentialing is not known for its sprinting ability.

3) Malpractice coverage confusion that turns into insomnia. A physician assumes the agency “covers malpractice,” then later notices the policy is claims-made and tail isn’t clearly included. Suddenly the question becomes: “If a claim comes later, who pays?” Tail coverage can be expensive, and nobody enjoys learning they’re responsible for it after the assignment ends. Experienced locums physicians tend to treat malpractice language as non-negotiable clarity: policy type, limits, tail responsibility, and reporting procedures must be explicit. If it’s not clear, it’s not done.

4) The schedule that expands like a gas. A contract says “approximately 12 shifts/month.” In practice, the facility requests “just a few more” because staffing is tight. The clinician wants to be helpfulbut also wants boundaries. Clear language around maximum shifts, additional shift approval, overtime rates, and call expectations helps physicians stay flexible without becoming the default solution to a staffing crisis. A simple sentence like “additional shifts must be mutually agreed in writing” can prevent awkward conversations later.

5) The non-compete that blocks a great opportunity. A physician loves a facility and wants to returnmaybe even convert to a permanent role. Then they see a restrictive covenant that prohibits working within a large radius for a long period, or requires a steep conversion fee without a clear path. Many agencies will negotiate reasonable conversion terms because it’s in everyone’s interest for good matches to continue. The key is catching it before you sign, not after you’ve already mentally moved your life into a new ZIP code.

These stories share one theme: most “locum disasters” aren’t clinicalthey’re contractual. The best defense is a calm, systematic review before you sign, plus a willingness to ask for clarity in writing. That’s not being difficult. That’s being professional.