How to Evaluate a Locum Tenens Agency: The Physician’s Guide to Choosing Right

Choosing a locum tenens agency is one of the most consequential decisions in your locum career — and most physicians make it with almost no framework for evaluation. Agencies are not interchangeable. They differ in margin structure, specialty focus, contract terms, credentialing speed, and how they treat physicians when an assignment goes wrong. This guide gives you a structured way to evaluate any agency before you commit, and explains what separates agencies that work for physicians from those that work primarily for themselves.

The Agency Landscape in 2026

The locum tenens staffing market is dominated by a small number of large national agencies and a larger number of regional boutique firms. Understanding where an agency sits in that landscape is the starting point for any evaluation.

The major national players as of 2026 include CHG Healthcare — the parent company of CompHealth, Weatherby Healthcare, and Global Medical Staffing — along with AMN Healthcare, Jackson + Coker, LocumTenens.com, and Barton Associates. These agencies have the largest assignment inventories, the broadest geographic reach, and the deepest facility relationships. They also tend to operate at higher margin structures than boutique firms.

The boutique and regional agency tier is harder to map because it is fragmented and constantly shifting. These firms typically specialize by specialty, geography, or facility type — a boutique focused exclusively on rural critical access hospitals, for example, or one focused on academic medical centers in a specific region. Their assignment inventory is narrower, but their margin structures are often more favorable and their recruiter attention more consistent.

The distinction matters because the right agency type depends on your specialty, geography, and what you are optimizing for. A physician who wants maximum assignment choice and geographic flexibility may find a large national agency more useful. A physician who wants the best possible rate in a specific market may find a boutique with lower margins more financially rewarding.

How VMS and MSP Structures Affect You

Before evaluating individual agencies, it is worth understanding a structural feature of the market that most physicians never encounter directly but that significantly affects their rate and their agency options.

Many large health systems use Vendor Management Systems and Managed Service Providers to manage their locum staffing. A VMS is a software platform that routes staffing requests, tracks credentialing, manages submissions, and monitors costs in real time across multiple agencies. An MSP is a company that provides turnkey management of the entire contingent staffing function — vendor contracting, sourcing, rate negotiation, and performance oversight — on behalf of the health system.

When a facility uses a VMS or MSP, they typically have a preferred vendor list — a set of agencies that have been vetted, contracted, and approved to submit candidates. Agencies not on that list cannot place physicians at that facility regardless of how good the match is. And the rate structure flowing through a VMS or MSP relationship is often locked by contract — meaning your recruiter at an approved agency may genuinely be unable to offer you a higher rate for that facility even if they wanted to.

The practical implication: for assignments at large health systems operating under MSP or VMS arrangements, the most important question is which agencies are on the approved vendor list — not which agency has the best general margin structure. Being with an agency that is not on a facility’s approved list means you cannot work there through that agency, regardless of your qualifications or the rate you are willing to accept.

The Eight Questions to Ask Every Agency

No agency evaluation should happen without direct answers to these questions. A recruiter’s willingness to answer them honestly — and the quality of those answers — tells you as much as the answers themselves.

1. What is your margin structure on this assignment?

Most recruiters will not answer this directly. Some will deflect. A small number — typically boutique agencies with transparent margin models — will tell you. The question is worth asking regardless of the expected answer, because it signals that you understand the bill rate structure and are not negotiating blind. An agency that refuses to engage with the question at all is telling you something about how they operate.

For a full explanation of how bill rates and agency margins work, see our Bill Rate Breakdown guide.

2. Are you on the approved vendor list for the facilities I’m targeting?

If you have specific facilities or health systems in mind, ask this directly. An agency that is not on the approved vendor list cannot place you there — and you would be better off identifying an agency that is, or exploring direct contracting if that is an option.

3. How do you handle credentialing and what is your typical timeline?

Credentialing delays are one of the most common sources of assignment problems. Ask the agency what their typical credentialing timeline is from contract signing to cleared-to-work status, who manages the credentialing process, and what happens if a facility’s credentialing committee creates delays. An agency with a dedicated credentialing team and clear accountability is materially different from one that treats credentialing as an afterthought.

4. What malpractice coverage do you provide and what are the limits?

This is non-negotiable information. Ask for the coverage type (occurrence vs. claims-made), the per-occurrence and aggregate limits, and whether tail coverage is included if the policy is claims-made. An agency that cannot answer this question specifically has not thought carefully about physician protection. For a full breakdown of malpractice coverage in locum arrangements, see our Malpractice Insurance guide.

5. What does the contract say about assignment termination?

Ask specifically about the cancellation policy — both what happens if the facility cancels the assignment and what happens if you need to leave early. Some contracts include kill fees or clawback provisions that can create significant financial exposure if an assignment ends unexpectedly. Understanding the termination terms before signing is essential. For a broader look at contract provisions to scrutinize, see our Contract Review guide.

6. How is the housing stipend structured and what determines the amount?

Ask whether the stipend is a flat amount or based on actual costs, how the amount is determined, and whether it reflects current market rates in the assignment location. In high-cost markets, a stipend set to a generic national average will not cover actual housing costs and the effective value of the package is lower than it appears. For a detailed breakdown of how stipends work and their tax implications, see our Housing Stipends and Taxes guide.

7. Who is my point of contact when something goes wrong on assignment?

Ask specifically about after-hours support. If a credentialing issue, a contract dispute, or a clinical emergency arises at 11pm on a Friday, who can you call and what can they actually do? The answer to this question reveals the agency’s operational infrastructure more clearly than any marketing material.

8. Can you provide references from physicians in my specialty who have worked with you?

A credible agency should be able to connect you with physicians who have worked with them in your specialty. References are worth following up on — ask specifically about how the agency handled problems, not just whether the assignments were good.

Red Flags to Watch For

Certain patterns in agency behavior are reliable warning signs regardless of the agency’s size or reputation.

Pressure to commit before you have reviewed the contract is a red flag. A legitimate agency understands that contract review takes time and does not manufacture urgency to prevent it. If a recruiter tells you a position will disappear if you don’t sign today, that pressure is worth being skeptical of.

Vague or evasive answers on malpractice coverage terms are a red flag. This is a fundamental physician protection issue and any agency that cannot answer precisely does not have its documentation in order.

Stipend amounts that seem disproportionately high relative to the clinical rate deserve scrutiny. Packages structured to maximize the tax-free stipend component and minimize the taxable rate can create IRS exposure for the physician. The agency benefits because lower W-2 wages reduce their payroll tax burden — the risk is transferred to you. Understand the structure before you accept it.

Non-compete or non-solicitation clauses in agency contracts vary significantly by state in their enforceability following recent legislative changes. Several states have significantly restricted or eliminated non-competes for physicians — Montana effective January 1, 2026 and Pennsylvania effective January 1, 2025 are recent examples. Know your state’s current law before signing any contract with restrictive post-assignment clauses.

Lack of clarity on who covers what costs — travel, licensing fees, credentialing costs — is a red flag. These items should be explicitly addressed in the contract, not left to verbal assurances from a recruiter.

The Double Submission Problem

When working with multiple agencies, be explicit with each recruiter about which facilities you have already been submitted to and require their confirmation before they submit you anywhere new. Keep a simple running log — a spreadsheet tracking the date, agency name, recruiter name, and facility name for every submission permission you grant. This takes two minutes per submission and prevents an error that can cost you an assignment.

Large National vs. Boutique Agency: How to Choose

Working Multiple Agencies

Most experienced locum physicians work with multiple agencies simultaneously rather than committing exclusively to one. This is the correct strategy for most situations and here is why.

Different agencies have different facility relationships. An agency with a strong presence in rural critical access hospitals may have no relationships with the academic medical centers you are also targeting. Working with multiple agencies gives you access to a broader assignment inventory than any single agency can provide.

Multiple agencies also create negotiating leverage. When you have competing offers from two agencies for comparable assignments, both agencies negotiate differently than when they believe they are your only option. The competing offer is the single most effective negotiating tool available to a locum physician.

The tradeoff is administrative complexity — managing relationships with multiple recruiters, keeping track of which facilities are active with which agency to avoid double submissions, and maintaining consistent availability information across multiple contacts. These are manageable problems for a physician who is organized about it.

The Regulatory Environment in 2026

Several regulatory developments in 2025-2026 are relevant to how physicians evaluate and contract with agencies.

Non-compete enforceability has shifted significantly at the state level. The FTC’s broad federal non-compete rule was struck down in federal court in 2024, and the rule was formally removed from the Code of Federal Regulations in February 2026. Federal enforcement of a blanket ban is no longer the operative landscape — state law governs. Several states have since enacted or strengthened their own physician non-compete restrictions, with Montana and Pennsylvania as recent examples. The FTC continues to scrutinize egregiously broad agreements as potential unfair competition on a case-by-case basis, but the primary protection for physicians now runs through state statute. Know your state’s current law before signing any contract containing post-assignment restrictive covenants.

Independent contractor classification remains an area of regulatory attention. The DOL proposed a rule in February 2026 to rescind the Biden-era 2024 multi-factor test, moving toward a standard that would make it easier for agencies to classify physicians as 1099 independent contractors based on actual practice rather than economic dependence theory. This proposal was pending as of April 2026 — it has not been finalized — but the direction favors the 1099 locum model if it takes effect. Monitor this for developments through 2026.

In California specifically, AB 1415 and related legislation effective January 1, 2026 expanded oversight of healthcare transactions involving physician groups and management service organizations, with provisions aimed at protecting clinical autonomy from non-physician control. California-based physicians evaluating agency relationships — particularly those involving MSO structures — should be aware of this framework. If an agency arrangement in California appears to involve oversight of clinical decision-making beyond administrative functions, that warrants review by a California healthcare attorney familiar with the current regulatory environment.

The Bottom Line

The right agency for you is the one that has the assignments you want, treats the margin question with reasonable transparency, has the facility relationships you need, and has a track record of supporting physicians when problems arise. No single agency is right for every physician in every situation — which is why most experienced locums work with two or three simultaneously.

Evaluate agencies the way you would evaluate any professional relationship: ask specific questions, pay attention to how they handle the uncomfortable ones, verify what they tell you, and read the contract before you sign it. The time you spend evaluating an agency before your first assignment with them is time well spent.

Disclaimer: This guide is intended for general informational purposes only and does not constitute legal or financial advice. Agency relationships, contract terms, and regulatory requirements vary significantly. Consult a qualified healthcare attorney before signing any agency contract. Locum Pay Guide has no financial relationship with any staffing agency referenced in this article.