Choosing between Locum Tenens and Per Diem work is an important decision for healthcare providers seeking flexible employment possibilities. This choice impacts healthcare providers work-life balance, income potential, and career route.
Locum Tenens positions involve temporary projects that can range from a few days to several months, often demanding travel to multiple locations.
Per Diem roles, on the other hand, typically offer daily shifts at local healthcare settings , providing direct income without long-term commitments.
Understanding the nuances of each option can help you determine which option aligns best with your professional goals and personal lifestyle.
This blog gives you complete insight into the key differences, benefits, and considerations of Locum Tenens and Per Diem work to help you make an informed decision.
Locum Tenens
Locum tenens, Latin for “placeholder,” refers to a doctor who serves as a substitute provider on a short-term basis. This arrangement helps healthcare facilities fill staffing voids with licensed physicians.
For the locum tenens doctor, life holds a series of adventures in diverse places. A doctor may spend a month in a rural health center, getting to know the patients and staff, then move on to a large urban hospital to cover a department during staff shortages.
While the constant relocation demands energy, for those doctors who want to escape permanence and crave new experiences, the transient existence of a locum tenens beats being fixed in one setting.
💡 Do you Know? The requirement of locum tenens physicians in the US is expected to increase, because AAMC predicted a shortage of 100,000 physicians by 2030.
CMS Guidelines for Locum Tenens Physicians
The CMS allows payment for services provided by locum tenens physicians, but you must follow the guidelines closely.
This passage explains the rules for locum tenens physicians, specifically within the Medicare program. It’s important because it clarifies who can be a locum tenens physician, what limitations there are on using them, and how billing is handled.
Here’s a breakdown of the key points for locum tenens:
Qualifications for Locum Tenens Doctors
- They need a valid National Provider Identifier (NPI) which is a unique identifier for healthcare providers.
- They must have a full, unrestricted medical license to practice in the state where they’ll be working.
- Interestingly, they don’t have to be enrolled in Medicare themselves and their specialty can be different from the regular physician they’re replacing.
Limitations on Using Locum Tenens
- They can’t be used to permanently expand a practice or fill gaps for more than 60 days, with an exception for military service.
- The rules outlined here specifically apply to Medicare. Other insurance providers (like Medicaid or private insurance) might have different policies regarding locum tenens. It’s important to check with them.
Billing for Locum Tenens Services
- The locum tenens physician themselves can’t directly bill Medicare for their services.
- The healthcare practice that hires them bills under the original physician’s name and billing number, but with a special code (modifier Q6) to indicate it was a locum tenens doctor providing the care.
- The practice needs to keep records of all services provided by the locum tenens physician.
Important Reminders
- Non-physician providers like nurse practitioners (NP) or physician assistants (PA) can’t be used as locum tenens under Medicare.
- The responsibility falls on the healthcare practice to make sure they follow these guidelines. There can be risks if they don’t.
Per Diem
A per diem physician is one who works on a day-to-day basis, taking shifts as needed by the healthcare facility. The term comes from Latin, meaning “per day.”
This arrangement provides flexibility for both the doctor and the facility, as the physician can choose when to work while the facility brings in extra help during busy times.
For example, Dr. Smith may work a few shifts per week at the local hospital to fill in when the regular doctors are unavailable. The per diem role allows Dr. Smith to balance his professional and personal life. He gets to help patients when it’s convenient for him, without the commitment of a full-time position. Meanwhile, the hospital benefits from having an experienced doctor to provide care when patient loads are high.
Overview of Per Diem Guidelines
Think of a per diem rate as a daily flat fee that covers a patient’s stay in a healthcare facility. This is particularly useful for settings where patient needs can vary significantly day-to-day, like skilled nursing facilities (SNFs).
CMS, the Centers for Medicare & Medicaid Services, primarily uses per diems for SNF stays under the Medicare Prospective Payment System (PPS). This system establishes a base national rate per day, adjusted for various factors to reflect the patient’s specific needs. These adjustments can include:
Resource Utilization Groups (RUGs)
Categorize patients based on their level of physical and cognitive impairment, impacting nursing staff needs.
Functional Impairment Classification (FIC)
Considers the patient’s ability with daily activities (bathing, dressing, etc.), affecting therapy needs.
Comorbidities
Presence of additional medical conditions can influence the complexity of care.
Wage index
Takes into account geographic variations in labor costs for SNF staff.
Other then SNFs
Per diems are less common for hospital stays under Medicare. Here, a system based on Diagnosis Related Groups (DRGs) is used, which considers the patient’s diagnosis and typical treatment course to determine payment.
Locum Tenens Hiring Process
Here’s complete process for Locum Tenens hiring:
Identify Staffing Needs
The healthcare facility identifies the need for a temporary physician and defines the required qualifications, schedule, and duration.
Locum Tenens Agency Involvement
Many healthcare facilities partner with locum tenens agencies to source qualified and specialty specific physicians. These agencies manage credentialing, malpractice insurance, and contract negotiations.
Physician Selection Process
The healthcare facility reviews candidate profiles and conducts interviews to select the most suitable locum tenens physician for their practice needs.
Contract Negotiation and Credentialing
A formal contract outlining responsibilities, compensation, and malpractice coverage is established. The healthcare practice facility verifies the physician’s credentials and licensure.
Onboarding and Orientation
The facility provides the locum tenens physician with necessary training and orientation specific to their role and the healthcare practices needs.
Billing and Payment
The healthcare practices bills for the locum tenens physician’s services using the physician’s NPI number and the appropriate place-of-service code.
Per Diem Hiring Process
The per diem hiring process can be complex, but with the right strategy, it can be streamlined. We have outlined the essential steps to successfully hire and onboard per diem employees, ensuring you find the right fit for your healthcare practice needs.
Identify Staffing Needs
Similar to locum tenens, the facility identifies a short-term staffing need.
Per Diem Physician Pool
Facilities may maintain a pool of per diem physicians or utilize staffing agencies specializing in per diem placements.
Scheduling Shifts
The facility assigns shifts to per diem physicians based on their availability and the healthcare practices needs.
Credentialing and Verification
The healthcare practice verifies the per diem physician’s credentials and malpractice insurance before assigning shifts.
Shift Work and Documentation
Per diem physicians perform their assigned duties and document their services according to healthcare facility protocols.
Billing and Payment
The healthcare practice bills for the per diem physician’s services using the physician’s NPI number and the appropriate place-of-service code. The per diem physician is typically paid directly by the healthcare facility.
💡 Do you Know? Both locum tenens and per diem processes require adherence to federal and state regulations regarding physician licensure, billing, and coding.
Locum Tenens Vs Per Diem
By carefully weighing differentiating factors, you can confidently choose the medical staffing option that boosts you towards your career goals. Both locum tenens and per diem offer exciting opportunities for healthcare providers. So, take a deep breath to assess your needs, and make a fine line between both options.
Here are some differentiating points:
| Feature | Per-Diem | Locum Tenens |
| Work Schedule | Individual shifts picked up as per requirement | Pre defined contract length (weeks to months) |
| Flexibility | Highest level of flexibility | Moderate flexibility( restricted by contract) |
| Location | Mostly local but traveling opportunities also exist | Involve travel to different locations |
| Commitment | No long term commitment | Commitment to complete contract time period |
| Compensation | Mostly compensated on hourly basis | Can be hourly or salary, potentially higher than per diem |
| Benefits | Mostly no obvious benefit | Include many benefits like health insurance, malpractice coverage depends on agency/placement |
| Ideal for | Physicians who value ultimate flexibility, control over schedule and potentially working locally | Physicians who are seeking full time experience, higher income and also opportunity to explore new locations |
Difference in Schedule and Commitment
➜ Duration
Locum tenens involve predefined contracts , generally lasting from weeks to months. They fill up for physicians who are on the leave, vacation or during high demand periods. On the other hand per diem offers day to day flexibility, allowing healthcare providers to pick up shifts that align with your schedule.
➜ Predictability
Locum tenens provide a predictable schedule with settled hours offering stability and structure. Per diem work requires more adaptability and flexibility as shifts vary.
➜ Integration
Locum tenens placement allows you to become more integrated into the healthcare team, promoting continuity of care for patients. But per diem involves less integration.
Difference in Compensation and Benefits
➜ Compensation Structure
Locum tenens positions typically offer competitive salaries or hourly wages. Per diem roles usually pay an attractive hourly rate, but benefits are rarely included. .
➜ Benefits
Locum tenens may be eligible for benefits like health insurance, malpractice coverage, and even housing or travel stipends (depending on the placement and agency). Per diem roles usually pay an attractive hourly rate, but benefits are rarely included. You’ll likely be responsible for securing your own health insurance and malpractice coverage.
➜ Earning Potential
Locum tenens positions often offer higher potential earnings due to fixed salaries or longer contracts compared to per diem’s variable income based on picked-up shifts.
Difference in Work Environment and Experience
➜ Location
Locum tenens placements can involve travel and working in diverse locations, broadening your experience and potentially exposing you to new healthcare practices. Per diem work often allows you to stay local, focusing on familiar settings.
➜ Specialization
Locum tenens roles might require experience (2+ years) than per diem, which can be a good entry point for new graduates or those re-entering the workforce.
➜ Teamwork
Locum tenens offer an opportunity to build stronger relationships with colleagues and staff due to extended placements. Per diem work creates less time for team dynamics to develop.
Difference in Control and Autonomy
➜ Shift Selection
Locum tenens contracts usually outline specific working hours, offering less flexibility in shift selection compared to per diem’s pick-up-as-needed model.
➜ Autonomy
Locum tenens placements generally allow for a higher degree of autonomy in patient care within the context of the existing system. Per diem roles may involve more supervision due to the shorter duration of interactions.
➜ Personal Commitments
Locum tenens contracts require a time commitment that might make managing personal appointments or vacations more challenging. Per diem work offers greater flexibility to accommodate personal needs.
Difference in Career Development
➜ Skill Development
Locum tenens placements allow you to refine your clinical skills across different settings and potentially expand your professional network. Per diem work can be beneficial for maintaining current skills and gaining exposure to various practice environments.
➜ Career Exploration
Locum tenens can be a great way to explore different areas of medicine and practice locations before committing to a permanent position. Per diem work also allows you to experience diverse specialties but in a less structured way.
Difference in Logistics and Support
➜ Credentialing
Locum tenens agencies often assist with credentialing and licensure verifications for the placement facility. Per diem work might require you to handle credentialing independently.
➜ Logistics
Locum tenens placements may offer logistical support like housing or travel assistance, depending on the agency and location. Per diem work requires independent management of these aspects.
➜ Contract Negotiation
Locum tenens agencies typically handle contract negotiation, ensuring competitive compensation and benefits. Per diem work involves less negotiation due to the short-term nature of the role.
Difference in Professional Development and Growth
➜ Continuing Education (CE)
Locum tenens placements might offer limited opportunities for institution-sponsored CE credits. Per diem work allows you to manage your CE independently.
➜ Leadership Opportunities
Locum tenens positions rarely involve leadership roles due to the temporary nature. Per diem work may present leadership opportunities if you fill in for a supervisory role.
Pros of Locum Tenens as Compared to Per Diem
Locum tenens positions offer several advantages for healthcare professionals seeking stability and a more structured work environment:
✅ Locum tenens jobs provide fixed-term contracts (weeks to years) outlining work expectations, compensation, and benefits (if applicable).This allows for predictable income and workload planning.
✅ Locum tenens agencies often handle credentialing verification for contracted facilities, reducing the burden on the provider.
✅ Many locum tenens agencies offer comprehensive malpractice insurance coverage, mitigating the risk and cost for the provider.
✅ Certain locum tenens positions may offer benefits packages, including health insurance, retirement plan matching, and paid time off. This enhances long-term financial security and well-being.
✅ Locum tenens agencies handle many administrative tasks like payroll, tax filing (W-2), and credentialing maintenance, freeing up the provider’s time.
✅ Locum tenens providers can potentially offer continuity of care for established patients in a practice, especially for longer-term contracts.
✅ Some locum tenens agencies offer practice management support services like billing and coding assistance, further streamlining the provider’s workload.
✅ Locum tenens placements can expose providers to diverse healthcare settings, potentially leading to new career opportunities or skill development.
✅ Building connections with colleagues and staff at different facilities can expand a provider’s professional network and future job prospects.
✅ Some states may have streamlined licensing requirements for locum tenens providers, particularly for short-term placements.
Cons of Locum Tenens as Compared to Per Diem
While offering stability, locum tenens positions come with certain drawbacks compared to the flexibility of per diem work:
❌ Locum tenens contracts lock providers into specific schedules for the duration of the agreement, offering less control over work hours compared to per diem.
❌ Hourly pay for locum tenens positions can be lower than what some per diem shifts might offer, especially for in-demand specialties.
❌ Negotiating pay rates or contract terms can be more challenging with locum tenens compared to per diem where providers have more leverage due to the fill-in nature of the work.
❌ Travel, meals, and continuing education expenses may not be fully tax-deductible with locum tenens compared to per diem, impacting overall income. Consult with a tax advisor for specifics.
❌ Not all locum tenens positions offer benefits packages. Verify details with the agency and contract before accepting a placement.
❌ Integrating into a new practice environment with established protocols and staff dynamics can require more effort for locum tenens providers compared to per diem shifts.
❌ Locum tenens providers may have less autonomy in healthcare practice compared to per diem where they can choose specific tasks or procedures to perform.
❌ Contractual obligations might dictate the workload for locum tenens providers, leaving less room for adjustments based on personal needs.
❌ Locum tenens positions might offer fewer opportunities for continuing medical education (CME) support compared to some per diem roles where specific institutions may have CME programs for contracted providers.
Locum Tenens vs. Per Diem: Which one is a Better Option For You?
Ultimately, the “better” option depends on your needs.
Choose Locum Tenens if: You want a defined contract with benefits, stability for a set period, and potentially enjoy travel opportunities.
Choose Per Diem if: You prefer maximum schedule flexibility, want to stay local, and don’t mind the lack of benefits or fixed hours.
The projected growth rate paints a promising picture for locum tenens compared to per diem work. A study shows 6.3 % annual growth for locum tenens staffing in the US healthcare market by 2028, while per diem positions are expected to maintain a steady 5% growth.
This suggests a potentially stronger job market and potentially higher pay increases for locum tenens physicians in the coming years.
A study shows per diem nursing jobs alone account for a substantial $3 billion annually, whereas total locum staffing reaches $2.7 billion. This suggests per diem opportunities are more prevalent, potentially due to their flexible nature.
Consider your priorities – per diem for ultimate schedule control, or locum tenens for a more structured, potentially travel-filled experience with benefits.
So go for the option that meets your requirements. Both are better in their own way.
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FAQs
Do locum tenens physicians need specific qualifications?
Yes, they must be fully licensed and meet state-specific requirements to practice medicine. Generally Locum tenens physicians require:
- Staying up-to-date with the latest medical advancements is crucial. Evidence of recent Continuing medical education (CME) completion is often a requirement.
- A legal and unrestricted license to practice medicine in the state where the locum tenens position is located.
- While minimum experience requirements can vary, mostly positions seek physicians with at least two years of experience in their specific field.
What are the typical responsibilities of a locum tenens physician?
Locum tenens physicians have all the responsibilities that are associated with a permanent physician in that role. This includes diagnosing and treating illnesses, managing medications, performing examinations, ordering and interpreting diagnostic tests, and providing comprehensive patient care. They may also be involved in other tasks like counseling patients, conducting health screenings, and collaborating with other healthcare providers.
What types of healthcare settings use per diem physicians?
Hospitals, clinics, nursing homes, and urgent care centers often utilize per diem physicians. Per diem physicians ensure these centers can maintain efficient patient flow and provide timely care.
How do healthcare providers pick up per diem shifts?
Many facilities have online scheduling systems or work with staffing agencies that connect physicians with available shifts. Specialized healthcare staffing agencies link qualified physicians with per diem opportunities across various healthcare practices.
Prominent agencies for locum tenens include LocumTenens.com, AMN Healthcare, American Medical Association (AMA) Career Center, Indeed Healthcare, and many more. These agencies often handle credentialing, malpractice insurance verification, and contract negotiation, streamlining the process for physicians.
What are the potential challenges of billing for per diem physicians?
- Coding inconsistencies due to frequent changes in healthcare providers with different coding systems.
- Ensuring complete documentation for each per diem shift to avoid coding errors and claim denials.
How can medical billing companies optimize billing for both types of roles?
- Develop clear protocols for documentation review, coding, and claim submission for both locum tenens and per diem.
For example, Locum Tenens billing team reviews the physician’s notes, verifying the presence of the supervising physician’s National Provider Identifier (NPI) with the Q6 modifier on all claims. This ensures proper reimbursement for services provided under the absent physician’s license.
On the other hand for per diem the billing team focuses on accurate coding based on the specific service provided by the per diem physician.
- Maintain open communication with temporary physicians and healthcare facilities. Educate them on billing processes.
- Implement a robust concurrent auditing program. This proactive approach involves reviewing a sample of claims (both locum tenens and per diem) before they are submitted. For example, the audit identifies a claim for a locum tenens physician where the documentation lacks the specific modifier indicating the locum tenens status. The auditor would flag this inconsistency, ensuring the right modifier is added.
What are the standard qualifications for a locum tenens physician?
Locum tenens physicians must be licensed in the state where they will be practicing and possess a board certification in their specialty. Additional requirements may vary depending on the healthcare practice and the specific assignment.
