Locum Tenens: A Complete Guide for Healthcare Recruiters and Providers

Locum tenens — Latin for "to hold the place of" — is one of the fastest-growing segments of healthcare staffing. Over 50,000 physicians work locum assignments each year, and the market is valued at over $5 billion annually. For recruiters, it represents a high-margin, high-volume opportunity. For providers, it offers flexibility, premium pay, and freedom from the politics of permanent employment.

Locum Tenens Rates by Specialty (2026)

How Locum Tenens Works

The typical locum arrangement follows this flow:

1. Facility identifies a need — physician vacancy, leave coverage, volume surge
2. Staffing agency sources candidates — matches specialty, licensure, availability
3. Credentialing — provider credentials are verified (typically 30-60 days for locum-specific credentialing)
4. Assignment begins — assignments range from a single weekend to 6+ months
5. Agency bills facility — facility pays the agency a bill rate (typically 1.5-2x the provider's hourly rate)
6. Provider gets paid — weekly pay via W-2 or 1099, depending on the arrangement

1099 vs W-2: What Providers Need to Know

Most locum physicians work as 1099 independent contractors, which means:

• Higher gross pay (no employer tax withholding)
• Responsible for own taxes (quarterly estimated payments)
• Can deduct travel, housing, meals, CME, licensing fees
• Must carry own malpractice insurance (or negotiate occurrence-based from agency)
• No employer-provided benefits (health insurance, retirement)

Some agencies offer W-2 arrangements with lower hourly rates but include benefits and handle tax withholding. For providers doing more than 3-4 months of locum work per year, a W-2 arrangement may be simpler.

Malpractice Coverage for Locums

This is one of the most important and most overlooked aspects of locum work:

• Occurrence-based — covers any incident that occurred during the policy period, regardless of when the claim is filed. The gold standard for locums.
• Claims-made — only covers claims filed during the active policy period. Requires "tail coverage" when the policy ends.

Most reputable locum agencies provide occurrence-based malpractice as part of the assignment. If an agency offers claims-made only, the provider needs to understand the tail coverage implications.

For Recruiters: How to Build a Locum Pipeline

• Speed is everything — locum positions fill in days, not weeks. First agency to present a credentialed candidate wins.
• Maintain a "ready bench" — pre-credentialed providers who can start within 1-2 weeks
• Multi-state licensure — providers with compact licenses or licenses in multiple states are far more placeable
• Build relationships, not transactions — providers who had a good experience come back. Recurring placements are the most profitable.
• Use databases — tools like Ava Health let you search providers by specialty and state, building candidate lists quickly

Tax Advantages of Locum Work

For 1099 locum providers, significant deductions are available:

• Travel expenses (airfare, mileage, rental car)
• Housing and per diem (GSA rates)
• Licensing fees for each state
• CME and board certification costs
• Professional society memberships
• Home office (if maintaining a home base)
• Health insurance premiums (self-employed deduction)

Many locum physicians structure their practice as an S-Corp or LLC to optimize tax treatment. A healthcare-specialized CPA is essential.

Browse healthcare providers by specialty at providers.avahealth.co/specialties or view open positions at providers.avahealth.co/jobs.

Related reading: How Much Do Locum Physicians Make? 2026 Compensation by Specialty, Locum Tenens vs. Permanent Positions: Which Is Right for Your Medical Career?, Emergency Medicine providers.