As an organization, it’s important to be knowledgeable about who you’re hiring. Locum tenens physicians are different from full-time providers, in the sense that you do not deliver payroll costs and benefits or insurance for the provider. In this blog, we are going to cover what your locum tenens provider goes through to be able to service your organization.

Independent Contractors

According to the White Coat Investor, “The vast majority of locum tenens physicians are paid as independent contractors.” This means that you are not your locum tenens providers employer. While they are serving your community and filling in physician gaps in your organization, they work for themselves. They must handle their own taxes and manage their own insurance.

Types of businesses structures

We are going to deep dive into what kind of business structures your locum tenens providers may have to choose from and their pros and cons:

The Sole Proprietor

A sole proprietorship is a type of enterprise that is owned and run by one person and in which there is no legal distinction between the owner and the business entity. The White Coat Investor states, “The simplest and easiest business structure is a sole proprietorship, and in fact, this is the structure that the majority of locums doctors will choose.” Most of the locum tenens providers you have in your organization will utilize this type of business structure for the ease of operating and filing taxes every year.

Incorporating their spouse

Many locum tenens providers will have spouses in the medical field as well, meaning they will evaluate what kind of business structure they want to be recognized as legally with their spouse. Even if their spouse is not employed in the medical field, they could work on tasks such as bookkeeping, travel arrangements, etc. for their husband/wife. Typically it’s just easier for both spouses to form a sole proprietorship or to employ their spouse under a sole proprietorship.

Limited Liability Corporation

A limited liability corporation is a form of a private limited company. It is a business structure that can combine the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation. There is no protection for the provider from malpractice, and The White Coat Investor mentions, “An LLC can be a great entity for a non-clinical side gig or to house your real estate investments, but there is little reason to form one just to do some locum tenens work.”

In the end

Regardless of how locum tenens providers choose to structure their business identity, it’s important for your organization to understand how your locum providers are structuring themselves. Understanding how your providers structure themselves improves your overall knowledge of locum tenens providers and can strengthen your relationship in the end. 

If your organization needs assistance finding locum tenens providers for your open needs, reach out to us on our website or give us a call at (866) 995-6077.