Why use locums instead of reducing the schedule?
Closing a provider’s schedule means lost revenue, patients going elsewhere and possibly losing referral relationships. Locum coverage keeps access open and revenue flowing, even at higher cost.
For specialties with long recruiting timelines, a gap can last months. Locums bridge it while recruiting continues. The question is whether the revenue preserved exceeds the premium paid.
What does locum coverage involve?
Agency fees and provider pay, travel and lodging if not local, credentialing with payers and the facility, malpractice coverage, and onboarding time.
Credentialing locums with payers can take time; ask the agency early about which payers the provider is enrolled with and plan scheduling accordingly.
Read the agency agreement for conversion fees as well. If the locum turns out to be a great fit and you want to hire them permanently, many contracts charge a fee for that. Knowing it upfront helps you plan recruiting alongside coverage.
How do I compare cost with revenue?
Estimate daily locum cost including travel, compare with expected daily collections from that provider’s schedule, and include patient retention value.
If collections cover most of the locum cost and you keep patients and referrals, coverage is usually worthwhile. Funding bridges the timing between agency invoices and payer payments.
| Item | Cost source | Note |
|---|---|---|
| Agency and provider pay | Agency contract | Often billed weekly |
| Travel and lodging | Agency or practice | Clarify in contract |
| Payer credentialing | Practice | Plan early |
| Malpractice | Agency or practice | Confirm coverage |
Worked example: a rural clinic covering a leave
A rural primary care clinic averaging $140,000 in monthly deposits covers a physician’s three-month leave with a locum, with agency invoices weekly and payer payments arriving weeks after visits, needing about $42,000 to bridge. Using an illustrative factor rate of 1.20, $42,000 would mean $50,400 repaid over roughly 6 months: 26 weekly payments of about $1,938.
That works out to about $8,400 a month, or 6.0% of the $140,000 this business deposits monthly, and the total cost of the money is $8,400. Keeping the schedule open protects patient relationships and revenue that would otherwise be lost for months.
For comparison, repaying the same $50,400 over 4 months would lift the monthly outlay to about $12,600, or 9.0% of deposits, so ask for both terms in writing; the shorter one frequently prices lower even though each payment is larger.
| Average monthly deposits | $140,000 |
|---|---|
| Amount funded | $42,000 |
| Factor rate (illustrative) | 1.20 |
| Total repaid | $50,400 |
| Cost of the funding | $8,400 |
| Term | about 6 months |
| Weekly payment (26 payments) | $1,938 |
| Payments as a share of deposits | 6.0% |
Who this fits
Usually a fit
- Practices covering a provider leave or departure
- Clinics in hard-to-recruit areas
- Groups protecting referral relationships
When a practice may want to wait
- Practices that can absorb a reduced schedule
- Short gaps covered by existing providers
- Practices without deposit history
What you’ll typically need
- Recent business bank statements
- Locum agency agreement
- Practice details
Frequently asked questions
Can funding pay a locum agency?
Yes; working capital can pay any business expense.
How long do locum assignments last?
Anywhere from days to months, based on need.
Will locum visits be billable right away?
It depends on payer credentialing; ask the agency.
Does a 500 credit score rule me out for locum coverage?
No. Applicants from 500 can be reviewed for locum coverage; the deposit history does most of the work, and better credit typically improves the terms you are offered.
Provider out, patients waiting?
Apply and keep schedules open.
Updated October 6, 2026