Government vs. Commercial Contracts

As Published in LocumLife Magazine, March 2006
- by Aaron Paul, coordinator of the Premier Residency Program

One option for physicians who choose to practice as locum tenens upon exiting residency is to fulfill government contracts. Given the significant differences between government and commercial contracts, however, it is important to understand what you are getting into before you arrive on site.

Licensure

Unlike commercial contracts, the vast majority of government opportunities do not require the physician to hold a license in the state where the facility is located. As long as you have an unrestricted license in a state, territory, or commonwealth of the U.S., you are eligible to provide services at most government locations. "Government contracts are the way to go if you love to travel. Where do you want to go...Maine? Florida? Washington? Great. No problem. You name it, there are government contracts there," says Daniel Matus, government department manager at Norcross, Georgia-based Medical Doctor Associates.

When considering these types of arrangements, keep in mind that the "any license will do" rule is not universal in government opportunities - the notable exception being the U.S. Air Force. Air Force contracts usually have the same licensure requirements as commercial contracts. However, the Air Force is not a high volume purchaser of locum tenens services at this time, and it is possible to work the overwhelming majority of government contracts with a license from any state.

Personal vs. non-personal services

Another important distinction from the commercial world is that U.S. Military, Veterans Administration (VA), and Indian Health Services (IHS) contracts are designated as either "personal services" or "non-personal services" contracts. No such distinction exists in commercial opportunities. Under a non-personal services contract, the physician is free to make any necessary clinical decisions. Usually, with this type of agreement, the government does not provide malpractice insurance - it is the responsibility of either the locum tenens company or the physician.

Often, a military opportunity will be a personal services contract, which means that the physician does not work independently and must clear some clinical decisions through the Chief of Staff. Again, the Air Force is the notable exception and many Air Force opportunities are non-personal services contracts. The government is a self-insurer, and under a personal services contract, it is not necessary for the physician to obtain additional malpractice insurance.

Contract length

Government contracts are not just for those transient souls who were born with an extra helping of spontaneity. They are also an excellent option for physicians whose spouses are still in academia, the military, or some other obligation requiring them to stay in a specific location - from which they will be moving in the near future.

It is not uncommon for two married physicians, for example, to complete their residencies at different times. The interim time can be difficult because the spouse who has completed residency wants to begin working, but cannot commit to anything permanent until the other spouse finishes his or her residency and the couple can decide where they want to build their life together. The same is true for physicians married to military personnel who are awaiting orders. These "limbo" situations can be even more stressful for physicians with children, or physicians who, for some reason or other, need the spouse who is able to work to produce a strong income.

Providing locum tenens services to fill the gap before the couple is ready to make a more permanent move is an obvious solution. However, even this can seem daunting to a young couple who knows that with every new locum tenens opportunity, their income, ability to spend time together, and maybe even physical distance apart will change. Here is where government contracts have the advantage over commercial contracts. In general, commercial contracts tend to range from a few weeks to a few months, while government contracts tend to be at least 3 months in length and may last several years.

"Most government contracts have option years," advises Mr. Matus, "so even if the original bid was for a 6-month stint, it could eventually be extended over a 4-year period." A government locum tenens contract, therefore, represents an opportunity for a young couple to have a stable, predictable income and lifestyle, while at the same time leaving themselves the flexibility to move to a new community upon the spouse's completion of residency, fellowship, or receipt of military orders.

Location

One misconception about government contracts is that they are all located in extremely rural areas. Many government opportunities are located in, or very close to, major urban centers. This is especially true of VA facilities, which by necessity are often located in the hearts of cities. If you are looking to provide locum tenens services in a metropolitan area, it is probably easier for you to find a geographically acceptable government contract than a commercial one.

This is not to say that if you accept a government contract, you will be limiting your options to the urban setting. There are plenty of opportunities for the rugged individualist who wants to be close to nature. Mr. Matus explains, "IHS facilities exist in very rural communities around the U.S., and they are typically top-notch." Many physicians find that practicing on a reservation is an extremely rewarding experience, both for the eco-tourism/extreme sports opportunities, and also for the way that interacting with this unique patient population enriches their lives.

Weighing your options

If you are considering entering locum tenens practice, be sure to examine the possibilities presented by government contracts. Their less strict requirements with regards to licensure make these opportunities an attractive option for those wanting a greater degree of flexibility with travel. At the same time, the longer typical length of government contracts versus commercial contracts offers more stability to physicians who place a higher value on having a predictable income and lifestyle. Whether long or short-term in scope, these alternatives could be some of your most rewarding experiences on the road.