Subscribe to The Podcast by KevinMD. Catch up on old episodes!

Join Dennis Hursh, an attorney with 40+ years of expertise in health law. Discover the nuances of locum tenens agreements for physicians, from tax implications and expense deductions to malpractice insurance essentials. We’ll delve into patient contact hours, credentialing costs, and the significance of fair indemnification clauses. Explore how to navigate covenants not to compete, negotiate reimbursements, and benchmark compensation effectively.

Dennis Hursh is a veteran attorney with over 40 years of experience in health law. He is founder, Physician Agreements Health Law, which offers a fixed fee review of physician employment agreements to protect physicians in one of the biggest transactions of their careers. He can also be reached on Facebook and LinkedIn.

He discusses the KevinMD article, “Locum tenens agreements for physicians.”

The Podcast by KevinMD is brought to you by the Nuance Dragon Ambient eXperience.

With a growing physician shortage, increasing burnout, and declining patient satisfaction, a dramatic change is needed to make health care more efficient and effective and bring back the joy of practicing medicine. AI-driven ambient clinical intelligence promises to help by revolutionizing patient and provider experiences with clinical documentation that writes itself.

The Nuance Dragon Ambient eXperience, or DAX for short, is a voice-enabled, ambient clinical intelligence solution that automatically captures patient encounters securely and accurately at the point of care. Physicians who use DAX have reported a 50 percent decrease in documentation time and a 70 percent reduction in feelings of burnout, and 83 percent of patients say their physician is more personable and conversational.

Rediscover the joy of medicine with clinical documentation that writes itself, all within the EHR.

VISIT SPONSOR → https://nuance.com/daxinaction

SUBSCRIBE TO THE PODCAST → https://kevinmd.com/podcast

RECOMMENDED BY KEVINMD → https://kevinmd.com/recommended

GET CME FOR THIS EPISODE → https://earnc.me/GGR4Hk

Powered by CMEfy.

Transcript

Kevin Pho: All right, welcome to the show. Subscribe at KevinMD.com/podcast and get CME for this episode by clicking on the CME link in the show notes. Today we welcome back Dennis Hursh. He is a regular guest on the podcast. He’s a health care attorney, and he can be reached at Physician Agreements Health Law. Today we’re going to talk about “Locum tenens agreements for physicians.” Dennis, welcome back to the show.

Dennis Hursh: Thanks, it’s great to be here.

Kevin Pho: So let’s get right into it. Before we talk about your article, just give a brief definition of what a locum tenens agreement is.

Dennis Hursh: Well, it’s generally short term. I mean, most of them that you see are going to be maybe a week, maybe two weeks, and you’re typically filling in for another physician. Sometimes they’ll do it if, you know, we’ve got a three-person department and one of them is off on pregnancy leave or something, but typically the concept is you’re in the place of another physician.

Kevin Pho: And for these locum tenens positions, are they typically directly contracted with the medical institution, or are they through some type of third party, some type of locum tenens company?

Dennis Hursh: I’ve seen it both ways. I’ve seen more where it’s through a locum tenens company. Once in a while, you’ll see an institution directly contract.

Kevin Pho: And what’s the contracting situation like that a physician faces when going through a locum tenens situation? What’s a typical scenario?

Dennis Hursh: Well, the first one is a classic line, same as an employment agreement. It’s handed to you, and they say, “This is our standard contract. We don’t change it.” So that’s always how it starts, and then you get in and look at it. But usually you agree in advance, “These are the times that I’m going to be available.” And a lot of times it’s also going to be a specific place: “I will go to this town. I will go to this hospital.” It’s not just, “Yeah, I’ve got two weeks in June. Send me wherever you will.”

Kevin Pho: So this is for both scenarios, whether you’re directly contracting with an institution or through some type of locum tenens company. They’ll probably give you a quote-unquote standard contract?

Dennis Hursh: Right. Usually they say, “This is the one we use for everybody.” Every contract, everybody says that.

Kevin Pho: So how are these contracts different from a typical employment contract that we’ve discussed in previous episodes?

Dennis Hursh: Well, one thing is it’s usually a lot shorter, because there’s a lot less to describe. Typically there are no benefits whatsoever other than malpractice insurance, so there’s not going to be discussions of that. Generally there isn’t going to be a covenant not to compete; there certainly shouldn’t be. It’s reasonable to have a non-solicitation agreement. If the locum tenens company sets you up to go work at a hospital, it’s certainly fair for them to say, “Don’t contact the hospital and cut out the middleman and just work for the hospital.” But it’s generally a lot shorter than a physician employment agreement.

Kevin Pho: Now, what are some specific things that physicians should look out for on these locum tenens contracts?

Dennis Hursh: Well, first of all, I have to figure out, are you an employee or an independent contractor? I’d say maybe a slight majority of them that I see are independent contractor agreements. That can be very good. You’ve got to talk to your tax preparer, but there’s at least an argument, if you’re doing locum tenens work, that all the expenses you incur being a physician that aren’t reimbursed by your employer are arguably a deduction off of that. So it can be a good deal. You know, if your employer doesn’t pay CME, or your employer doesn’t pay all your dues or things like that, if the employer doesn’t separately reimburse for board certification, it’s possible that as an independent contractor you can say, “Oh, that’s part of my Schedule C, the business I have doing locum tenens,” and deduct it. So it can be attractive for tax purposes.

The things that everyone absolutely, positively has to have are malpractice and tail coverage. I’ve seen one or two that didn’t on the first draft, but most of them do that.

You have to have your duties laid out. I see some that say, “You’re going to work at this hospital, and we’ll schedule you.” And, you know, it could be something like a hospitalist. Arguably they could say, “Yeah, you’re on five 24-hour days in a row. You know, we said you’d work this week. Well, you’re on 24 hours.” I mean, sometimes that happens. You know, in a rural hospital you will see that, and maybe it’s not unreasonable, but obviously in a busy hospital you can’t do, you know, 120 hours straight. So you’ve got to make sure there are reasonable limits on exactly what you’re doing.

Watch out for indemnification. I mean, I don’t think there should be any. The employer or the locum tenens company should have adequate insurance. They shouldn’t say, “If there’s a big malpractice action and it exceeds our insurance, then you’re responsible for that.” And I think those are probably some of the biggest things.

Also, what’s paid. Virtually all of them do, but not all of them: They should pay you to get there, and they should pay you to leave. I see some that pay a really, really good rate, and they don’t include lodging and meals and rental car expense, but most of them, I think, do. So you have to look at that, and you have to look at the details. If you haven’t done this before, it may seem reasonable if you’re working Monday through Friday that “We’ll pay for a hotel Monday through Friday, and we’ll pay for a rental car Monday through Friday.” But if you think about it, you’re going to have to travel there, presumably. So it should cover the hotel the day before and the day after, same with a rental car. You shouldn’t be in a situation where your last day of work is Friday, you work until 8 p.m., hotel checkout is 11, so you dump all your stuff, you’ve got to return the rental car, and, you know, you’re in a heap somewhere at the hospital. So little things like that. Again, I think the second time you do it, you’ll probably be aware of it, but the first time it may sneak up on you. If you’re there for a longer engagement, two or three weeks, sometimes you can get them to reimburse at least one trip home during that time. Again, you’ve got to ask.

Kevin Pho: So by definition, locum tenens agreements and contracts are going to be shorter than typical standard physician agreements. Does that affect the flexibility and the negotiation process in terms of what employers and locum tenens companies can give you, or how much that contract can change?

Dennis Hursh: Yeah, it gives them much more incentive to be flexible. It’s one thing to say, “We have a position in San Diego. Everybody wants to be in San Diego, so here we can be a lot less flexible on our contract.” If you’ve got a hospital in northern Michigan, you’re going to be pretty flexible on filling that. The hospital is probably going to pay very well to fill it, and the locum tenens company is probably going to be pretty flexible on what they’ll do to get you up there. So I do generally see a lot more flexibility on locum tenens agreements.

Kevin Pho: So when you say flexibility, are we talking about some of the benefits that you had mentioned, or are you talking about flexibility in terms of the salary and per-hour rate? Specifically, what type of flexibility are you seeing in these contracts?

Dennis Hursh: Pretty much everything. I mean, there’s going to be a limit. Obviously the locum tenens company isn’t going to do it at cost, so they’ve probably already contracted with the hospital. But a lot of physicians talk about, “Well, I don’t get paid that much as a locum tenens.” Maybe you don’t, but the locum tenens company does. So there’s probably a pretty big margin in there that they can negotiate, and if they’ve told an employer, “We will have a physician for you,” they’re probably willing to dig into that margin rather than not produce a physician. So I do see flexibility on money, and I also see flexibility on a lot of these other things: on lodging, rental car, maybe a meal allowance, that sort of thing. They usually are pretty flexible on those.

Kevin Pho: So I know that you are not a locum tenens company, but do you know offhand the upcharge locum tenens companies charge medical institutions when trying to fill their spots, in general?

Dennis Hursh: I’ve seen some, and I’ve seen as much as 40 percent. So if we’re paying you $100 an hour, we’re probably making at least $140 an hour. And I’ve seen some just egregious ones. I actually saw one where they were paying the physicians half. So there’s big money in locum tenens companies.

Kevin Pho: So I always ask you this question. Give us a success story where a physician presented you with a locum tenens contract and you perhaps negotiated on their behalf. Tell us some of the successes that you’ve had in terms of the flexibility in these locum tenens contracts. Give us a story.

Dennis Hursh: Well, I had one that was paying, I forget the dollar amount, but it might have been $100 an hour, and we did get them up to $140 an hour. They originally said, “You’re responsible for transportation.” We got them to pay transportation back and forth. We got them to provide a rental car. I wanted a meal allowance; we didn’t get that, but we did get an allowance for lodging. So a lot of times they come out and say, “This is it. It’s flat pay. You show up, this is what you earn. This is our standard contract.” So, as I said, depending on how desperate they are, there are usually a lot of things that they can pull out of the bag and give you if you ask for it. They’re very happy to have you sign that original one, though.

Kevin Pho: Just to be clear, like you said, that original one in that story, it did not have a lodging allowance or vehicle allowance or anything like that on the initial presentation?

Dennis Hursh: Yep. “We’re giving you $100 an hour for, I think, 12-hour shifts, and you’re going to be there two weeks. So, you know, you multiply it out, that’s what we’re paying you.” And that was it.

Kevin Pho: Do you find a lot of physicians present locum tenens contracts to an attorney like yourself, or do most physicians typically just sign what’s in front of them?

Dennis Hursh: I think they sign what’s in front of them, or they negotiate: “You give me $100 an hour? Well, make it $110.” And they say yes, and then they say, “OK, I negotiated that one hard.” So no, I don’t see that many locum tenens contracts. And I think part of it is it’s just a three-page contract, so they say, “I’m not going to pay an attorney to review just a three-page contract.” And again, maybe there’s stuff that should be in there, if it isn’t, that would make it longer.

Kevin Pho: How about negotiating with a recruitment company versus the institution itself? Any nuances between those two scenarios?

Dennis Hursh: Not a lot. The locum tenens companies are making a lot, and they are in it for the money. So, for instance, if they’ve agreed to $160 an hour for a physician, there’s no way they’re going to go over $160, and they’re probably not going to go over $145. You know, they’re going to want a profit margin. If a hospital really needs you in there, again, they’re not doing it as a profit-making thing, and they may not see an issue with going from $160 to $170 or even $180. So sometimes the actual institution is more flexible.

Kevin Pho: We’re talking to Dennis Hursh. He’s a regular guest on The Podcast by KevinMD, a health care attorney with over 40 years of experience. He can be reached at Physician Agreements Health Law. Today we’re going to talk about “Locum tenens agreements for physicians.” So, Dennis, for those physicians who are going into locum tenens, and we’re having more and more because of the dissatisfaction that they have with standard physician jobs, what would you say are the top things that they should be asking for when presented initially with a locum tenens contract?

Dennis Hursh: Well, I think the top things are: What are the limitations on hours? When are you going to do it? There is not a covenant not to compete, right? And then all the things I mentioned: travel, will you reimburse me to go home during the gig, lodging, rental car, meals, that sort of thing. And sometimes they’ll even do a personal allowance. It’s not usually much, but $20 or $30 a day if you need dry cleaning or something. So I think just think of what you need and ask for the world, and a lot of times the profit margin is high enough that they can give you a lot of things and still make their money.

Kevin Pho: And again, my final question: your take-home messages to the KevinMD audience.

Dennis Hursh: Have somebody look at it if you haven’t done a lot of these. You know, I’m biased, obviously; this is what I do for a living. But I do think that getting an attorney involved can make it a significantly better contract for you.

Kevin Pho: Dennis, once again, thank you so much for coming on the show and sharing your time and insight.

Dennis Hursh: Well, it’s my pleasure.