Health Insurance Requirements Create Barriers in the Locum Industry

One of the most attractive benefits of taking on locum tenens assignments is the malpractice insurance that is provided by the staffing agency. Almost all locum firms will make arrangements to cover a stay with a new employer, allowing physicians to enjoy an assignment with a minimum of administrative responsibilities.

For most physicians, locum jobs are a refreshing break from the grind of permanent employment. But for the many understaffed healthcare organizations across the nation, locum physicians are a precious resource. More than 90% of medical facilities in the US have utilized locum providers for either gaps in coverage, supplemental needs, or as a prelude to a permanent position  a “try before you buy” concept. Unfortunately, a number of jurisdictions have enacted malpractice insurance laws that make staffing in those areas prohibitively expensive. This has led some staffing agencies to exclude or limit work in those states that have high malpractice costs.

States with Highest Malpractice Insurance Premiums

Some states make it extremely difficult to hire permanent or temporary doctors because of an economic or judicial environment that favors litigation and patients over medical practitioners. This has led to unreasonably high malpractice insurance premiums that are passed on to employers or staffing agencies, which inevitably stymies placements in those regions.

Among the worst states with high premiums are Illinois, New York, New Jersey, Pennsylvania, and Delaware. The oversized risk of litigation has raised premiums up to $100,000 or more for some specialists practicing in those states. Although some of these states have introduced tort reform legislation in recent years in an effort to reign in skyrocketing premiums, it may take some time for insurers to align premium costs with actual malpractice realities.

Patient Compensation Funds

Originally implemented in the 1970’s, when many practitioners were having difficulty obtaining malpractice insurance due to excessively high premiums, many states created patient compensation funds (PCFs). These PCFs were intended to lower physician liability without reducing patient protections. Today, almost 15 states now administer patient compensation funds that serve as secondary liability insurance for practicing medical professionals.

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Some states allow practitioners to join a PCF voluntarily while others, like New Mexico, require participation. Enrollment in a PCF is predicated on enrollment in a malpractice plan, usually of the occurrence policy variety and payment of an additional surcharge to the state PCF administrator. This additional fee may significantly add to the amount paid by provider employers in these states, which can stifle demand for temporary medical practitioners.

High Risk Placements

While a medical professional will probably be working in a hospital or clinic in most of his or her locum assignments — after all, they usually have the greatest need and deepest pockets — they may find that they want to experience a different setting for thier next position.  For example, a medical professional may decide to take a job at a correctional institute, mental health facilityor a nursing home; these kinds of assignments may expose physicians to physical harm or greater legal liability.  The malpractice premiums for these types of locum tenens assignments are therefore likely to be significantly higher than most other types of placements.

The costs and benefits of any locum tenens assignment are something that should discussed between the professional and the staffing manager. Although compensation in a certain region or position may not be quite as high, it may be that a little added risk may pale in comparison to the joy of working in a wholly unique environment.

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Robert Moghim

Robert Moghim
Dr. Robert Moghim is a board certified physician specialist and founder of Onyx Healthcare (D.B.A Onyx M.D.). Dr. Moghim is also an executive director and co-founder of Colorado Pain Care and the founder of Moghim Medical Consulting Inc.. He also sits on the Colorado Medical Board.

Robert Moghim

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