Licensing, Credentialing and Hospital Privileges: A Locum Tenens Glossary for Physicians

Physicians often hear the three words used as if they mean the same thing. They do not. Each one is granted by a different body, checks something different and stops at a different boundary.

Knowing which is which makes it easier to see what an agency can help with, what only the hospital can decide and what stays your responsibility.

The terms at a glance

Use this table as a quick reference. Each term is explained in the numbered sections below.

1. Licensing: permission from the state

Every state, the District of Columbia and the U.S. territories have laws that govern the practice of medicine, and a medical board that issues licenses under them. The Federation of State Medical Boards, which represents those boards, notes that state boards license the general practice of medicine. The license does not list your specialty or the procedures you perform. Those questions are answered later, by each hospital.

For locum tenens, the working rule is simple: you need a license in each state where you will practice. Dr. Cooper’s Preparing for Locums and Independent Practice treats multistate licensing as ongoing work rather than a one-time setup, because each license renews on its own state’s schedule, with its own fees and continuing education rules.

The Compact: eligibility is not authorization

The Interstate Medical Licensure Compact offers a voluntary, expedited pathway to licensure for physicians who qualify. It does not create a national license. Licenses are still issued by each participating state, and you must follow the laws of each state where you are licensed.

To use it, you need a full, unrestricted license in a member state that can serve as your State of Principal License. You must also meet the Compact’s other requirements, which include accredited graduate medical education, specialty certification, limits on exam attempts, and no history of license discipline, criminal history or controlled substance actions. That state’s board then issues a Letter of Qualification. The Compact’s FAQ says the letter is valid for 365 days, and the member states you select issue their licenses after they receive it.

The point to hold onto: a Letter of Qualification tells you that you are eligible. It does not let you practice anywhere. You are licensed in a state only when that state issues its license. Physicians who do not qualify, or who need a state outside the Compact, apply through that state’s standard process.

Controlled substances are a separate step

A medical license is not a DEA registration. The DEA’s registration guidance says a practitioner who practices in more than one state needs a separate DEA registration in each state, and that the state’s licensing requirements must be met first. Some states also require their own controlled substance registration.

Dr. Cooper’s advice is to plan the DEA step as part of getting each new state license, not as an afterthought. An assignment without the right registration can limit what you are able to do there.

2. Credentialing: the hospital checks your record

Credentialing is the hospital’s verification that you have the qualifications you say you have. For hospitals that take part in Medicare, the Conditions of Participation (42 CFR 482.22) require the medical staff to examine the credentials of all eligible candidates for medical staff membership and make recommendations to the hospital’s governing body. The medical staff bylaws must describe the qualifications a candidate has to meet.

In practice, the hospital’s medical staff office confirms your medical school, training, board certification, licenses, DEA registration, work history, malpractice history and references. In Dr. Cooper’s description, each item goes through primary source verification: the hospital contacts the school, program, board or employer directly instead of relying on copies you supply.

Hospitals must also query the National Practitioner Data Bank when a practitioner applies for medical staff appointment or clinical privileges, including temporary privileges, and every two years for practitioners on staff. The NPDB says its information is intended to be used in combination with information from other sources, not as the whole picture.

Two points surprise physicians who are new to locums. First, credentialing is done hospital by hospital. Out of the Shadows notes that every hospital, surgical center and practice a locum physician serves will require its own credentialing process. Second, there is no universal timeline. It depends on the hospital, its bylaws, how quickly your past programs and employers respond and how complete your file is.

A complete, current set of documents and prompt replies are the parts you control. An agency can gather your documents and submit a packet, and that help is useful. It does not replace the hospital’s own review.

3. Privileges: what you may do at this hospital

Credentialing establishes that you are qualified. Privileging decides what you may do. The same federal rule requires a hospital’s medical staff bylaws to include criteria for determining the privileges to be granted to individual practitioners, and a procedure for applying those criteria. The Joint Commission’s standards guidance says a practitioner providing a medical level of care must be granted privileges before providing care, treatment or services, and that its focused and ongoing professional practice evaluation requirements apply.

Privileges are specific. A hospital’s privilege list may include core privileges for a specialty and separate privileges for particular procedures that require more training or documented experience. Dr. Cooper notes that a locum’s privilege request usually mirrors what the physician holds at their main practice, but the hospital’s own list and criteria decide the outcome.

Privileges at one hospital do not carry over to another. Many hospitals also have a temporary or locum tenens staff category, and Dr. Cooper notes that privileges granted for one engagement often end when it does. When your privileges at a hospital are new, a focused professional practice evaluation usually applies for a period. Depending on the hospital, that can mean proctored cases, chart review or other monitoring.

Privileges are also where the job description meets the facts on the ground. Dr. Cooper has described the moment in one of his own assignments:

His advice from that experience: ask the people on the ground what cases you will handle, what support is available and what your call responsibilities are. If the request and your skill set do not match, say so clearly.

4. Who is who: the agency, the recruiter and the hospital

Most locum assignments involve more parties than a physician expects. In Preparing for Locums and Independent Practice, Dr. Cooper maps them this way.

• The hospital identifies the coverage need, runs credentialing through its medical staff office and grants privileges. Clinical and department questions belong with its medical staff office or clinical leadership.
• The managed service provider (MSP), used by many hospital systems, runs the temporary staffing program and the agencies that supply it. The vendor management system (VMS) is the software that requests, candidate submissions and credentialing documents move through.
• The staffing agency finds and presents physicians, prepares credentialing paperwork, often arranges malpractice coverage, coordinates travel and lodging, processes payment and holds the contract with you.
• The recruiter is your day-to-day contact at the agency and the right person for logistics, paperwork and scheduling questions.

What the agency does not do matters just as much. As Dr. Cooper writes, agencies do not supervise clinical practice, set hospital privileges or make medical staff decisions. If a question is about your clinical scope, support or call, ask to speak with the hospital’s clinical leadership before you arrive.

Some physicians contract directly with a hospital or group instead of working through an agency. In that case, the work an agency would normally handle, from paperwork to malpractice coverage, needs to be assigned to someone in writing.

5. Assignment, rate and tail coverage

Assignment

An assignment is a defined block of coverage: a facility, dates, clinical duties, call expectations and a rate. In The Locums Heart Surgeon, Dr. Cooper describes two contract layers with an agency. The master services agreement governs the overall relationship, including your contractor status, compensation mechanics, malpractice coverage, restrictive covenants, indemnification and termination. The work order, sometimes called an assignment confirmation, covers one specific job.

His advice is to read the master agreement first and in full, because it is the document that controls disputes, departures and future restrictions.

Rate

Locum pay is usually based on time: hourly, daily or per shift, with separate terms for call. The rate you are paid is not the same as the bill rate the hospital pays the agency. The difference is the agency’s margin.

Dr. Cooper also notes that standard rates are often set above the recruiter, in the hospital’s staffing program. A recruiter may be able to request an exception but cannot always change the number. Read how the rate applies: which hours count, how call is paid and what happens if a shift is cancelled.

Many locum agreements treat the physician as an independent contractor rather than an employee, which changes how taxes and benefits work. Review that with a tax adviser before your first assignment.

Malpractice and tail coverage

Malpractice policies are usually either claims-made or occurrence. As the American Medical Association explains, an occurrence policy applies to an alleged error made while the policy was in force. A claims-made policy covers that period only if the claim is also made while the policy is in effect. Tail coverage extends a claims-made policy so that claims reported after it ends, for care given while it was active, are still covered.

Coverage arrangements differ by agency and by contract, so ask rather than assume. Before you sign, get in writing which type of policy covers you, the limits, and who provides and pays for tail coverage if the policy is claims-made. If you are leaving an employed position, ask the same question about your current policy.

Out of the Shadows puts the risk plainly: “The physician who does not know to ask about tail coverage will not be told.”

6. What varies, and who to ask

Almost every detail in this glossary varies by state, by hospital or by contract. Compact membership, licensing requirements and controlled substance rules are set state by state. Credentialing steps, privilege criteria and staff categories are set by each hospital’s bylaws and its accreditor. Pay, coverage and restrictions are set by your contract.

• Licensing: the state medical board, and the IMLC Commission for Compact eligibility.
• Controlled substances: the DEA and the state agency that handles controlled substance registration.
• Credentialing and privileges: the hospital’s medical staff office.
• Contracts: a healthcare attorney who reviews physician agreements.
• Malpractice coverage: the carrier or a professional liability insurance broker.
• Taxes and business structure: a CPA who works with physicians.

This glossary is education, not legal, tax, insurance, licensing or credentialing advice. Confirm the details that apply to you with your own advisers before you accept an assignment.

For the full treatment, Dr. Cooper covers licensing, credentialing and privileging, contracts and coverage in Preparing for Locums and Independent Practice, part of the Locum Tenens Academy™ library at locumtenensacademy.com/books.

About the source author

William A. Cooper, MD, MBA

Cardiothoracic surgeon, healthcare leader, and founder of Locum Tenens Academy™. The article series translates the perspective in his books into practical questions for physicians considering locums.