Negotiating with a Locum Tenens Agency: What to Get Covered

At minimum, a reputable agency should cover — at no cost to the clinician — travel (airfare plus travel-day arrangements), ground transport (rental car or mileage reimbursed at the IRS standard rate), a private separate room for lodging, per diem/meals, state license and DEA reimbursement, credentialing and privileging fees, and malpractice insurance (occurrence, or claims-made plus tail). These are negotiable line items, not fixed givens, so each one belongs in the written agreement with its dollar cap and reimbursement mechanic spelled out. The recurring traps are hidden caps (a “$100/night max” on lodging), quiet carve-outs (Uber, tolls, parking, and baggage fees excluded from “ground transport”), and vague verbs (“considered” or “upon request”) that are unenforceable. CME is usually NOT covered for contractors — treat it as a negotiate-or-offset item, not a given.

Audit the malpractice clause first, because it is the costliest gap. Coverage type determines whether you are exposed after the assignment ends: an occurrence-based policy covers any claim arising from work performed during the policy period, so no tail is ever needed. A claims-made policy only covers claims filed while the policy is active, so once it lapses you need tail coverage (an Extended Reporting Period, or ERP) to cover late-filed claims — and tail can cost tens of thousands of dollars. Do not assume the agency always covers tail. If the policy is claims-made, get an explicit written commitment — for example, “Agency will provide tail coverage at no cost to physician for all services provided under this agreement” — and confirm the limits (commonly $1M per claim / $3M aggregate). Note that malpractice insurance is separate from entity liability: a single-member LLC is a disregarded entity that does not shield you from personal malpractice liability, so the malpractice policy is the protection that matters here.

Lead with the rate — it is the single most-negotiated term, and a first offer is rarely the best one. The negotiation thesis is the comp-offset argument: because locums are independent contractors with no health insurance, no retirement match, no PTO, and no employer-paid CME, the rate should run higher than a W-2 equivalent. Industry sources put the gross locum hourly rate roughly 25–75% above an equivalent permanent position, and one analysis pegs the full-time locum premium at over $32 more per hour on average; frame the missing benefits as the explicit justification for that premium. Beyond the rate, pin down call/standby pay (specify frequency and in-house vs. home call — reject vague “shared call”), overtime premiums, holiday and shift differentials, and a guaranteed minimum-hours or minimum-shift floor (an “anticipated” schedule is unenforceable). Demand cancellation symmetry: if the facility can cancel with 30 days’ notice, so can you — asymmetric clauses (facility 14 days, you 60 days) are a red flag. Tax context to weigh against the headline rate: contractors owe self-employment tax of 15.3% (12.4% Social Security up to the 2026 wage base of $184,500 plus 2.9% uncapped Medicare) and make quarterly estimated payments, and full-time clinicians — an SSTB — above the 2026 §199A phase-out ($276,750 single / $553,500 MFJ) get a $0 QBI deduction.

No — NALTO first-presentation ethics bind you to the agency that presented you to a given facility first, so you cannot shop the same placement to a second agency to drive up the rate. As NALTO puts it: “If you are presented to practice at a hospital by Agency A on Monday and Agency B presents your CV on Tuesday, you are obligated (assuming you accept the engagement once the details of the contract are known) to provide services through Agency A.” A reputable recruiter will also never present your CV without your consent, and it is considered a breach of ethics to contract independently at a facility where you have practiced with a staffing company in the past two years (or whatever term your contract states). The practical play: negotiate hard within the agency that holds the first presentation, and use different agencies only for different opportunities. Keep a CV log (Agency / Date Sent / Location) to avoid accidental double-presentation.

Because vague language is unenforceable — “considered” and “upon request” are not commitments. Treat any verbal promise as a trap until it is documented: a useful script is “Please confirm in writing that [specific promise]. If they won’t document it, don’t sign.” Flush out and pin down the hidden caps in dollar terms — maximum flight cost, maximum dollars-per-night lodging, and any exclusions for Uber, tolls, or baggage — and get the who-books, the dollar caps, what is included, and the cancellation fallout (who eats non-refundable costs) all in the written agreement. There is a tax reason the mechanics must be written, too: under the accountable-plan rule (IRS Pub 463), documented, substantiated reimbursements within the federal per diem rates stay tax-free, but amounts above the rate become taxable wages. With the 2026 GSA standard CONUS rate at $178/day, a stipend exceeding that figure is taxable — so the written cap and substantiation method directly affect your tax bill.