New anesthesia group asking you to pay for locums? Read this first

A new anesthesia group has won your business, or is close to it. Buried in the transition plan is a request: fund locum tenens coverage for physician anesthesiologists, certified registered nurse anesthetists (CRNAs) or certified anesthesiologist assistants (CAAs) for the first six, twelve or eighteen months while the group builds its permanent team.

The request is not unreasonable on its face. Recruiting takes time, and someone has to cover your rooms while it happens. The problem is rarely that a group asks for help with ramp-up coverage. It is how the ask is structured, and what happens when recruiting takes longer than promised.

What the proposal usually says

In our experience working with hospital administration on these transitions, the pattern looks similar from group to group. The pro forma includes a line for locum coverage during ramp-up, described as temporary and modest. The request itself is open-ended: fund locums "until we're fully staffed," with no target date, no dollar cap and no consequence if hiring takes longer than expected. Reporting is thin, often a monthly invoice instead of a hiring update.

None of that makes the group acting in bad faith. Staffing a new contract from zero is genuinely hard, and a group that has just won your business has an obvious incentive to promise it can do more than it may be able to deliver on day one. The terms of the promise are what protect you, not the promise itself.

Why locum coverage costs so much more than employed staff

The premium is real, and it is large enough to matter to your budget. A 2024 simulation study published in the peer-reviewed journal Cureus modeled anesthesiologist staffing costs in the northeastern United States and found fully loaded employed anesthesiologist compensation of about $225 per hour, against locum tenens compensation of about $375 per hour, a gap of roughly two-thirds.¹ The same study found that once coverage runs past about 665 hours, roughly eleven weeks at a 60-hour week, a permanent hire becomes the cheaper option.¹ That threshold is exactly the kind of ramp-up period a new group's proposal usually covers.

CRNA locum rates follow the same shape. One 2026 salary guide put average employed CRNA pay at about $111 per hour, against a locum tenens range of $125 to $325 per hour, with most assignments falling between $190 and $225.² Nationally, roughly 10% of anesthesiologists and 4% of CRNAs now work locum tenens assignments at least part of the time, according to an analysis of the anesthesiologist and CRNA staffing market by the advisory firm Stout.³

Hospital and health system leaders feel the gap directly. In CHG Healthcare's 2025 survey of the locum tenens market, 63% of organizations named higher cost relative to permanent staff as a drawback of using locums, even as 80% planned to hold or increase their locum use through the year.⁴ Locum coverage costs materially more than employed staffing across the board, which is why the terms of who pays for it, and for how long, deserve the same scrutiny you would give any other seven-figure line item.

Why an open-ended arrangement works against you

Covering some ramp-up gap is a normal part of bringing in a new group. The risk is in the structure, not in the fact of it.

An open-ended pass-through, with no cap and no milestones, changes the group's incentives. Every month of locum coverage is a month the hospital absorbs the premium described above, while the group's own financial exposure to slow hiring stays limited. There is little reason to recruit faster than is comfortable. Attorneys who negotiate these agreements for a living see the dynamic directly. Writing about anesthesia stipend negotiations, McDonald Hopkins attorneys note that groups routinely cite the cost of locum tenens coverage, or the risk of service disruption if a role cannot be filled, as justification for a hospital subsidy.⁵ That is a legitimate point for a group to raise. It is also a reason to put a number and a date on it rather than an open commitment.

Anesthesia clinicians are scarce to begin with, which is part of why the leverage runs the group's way if the terms are loose. Our overview of the anesthesia staffing shortage covers how tight that market has become. A group can point to that scarcity as a reason recruiting will take time. It is also a reason the hospital needs a plan with dates in it, and not merely an assurance.

The ending of the ramp period is often as troubling as the middle. When the funded period runs out, some groups come back and ask for a larger ongoing subsidy, justified by the "actual cost" of that first year, the same year inflated by the open-ended locum spending the hospital already funded. A subsidy negotiated to cover a temporary staffing gap can quietly become the floor the group defends at the next renewal, which is the broader pattern we cover in why anesthesia subsidies keep rising. Our explanation of an open-book, reconciled subsidy structure covers why a reset built on an unmanaged year should be treated as a red flag on its own, not a neutral starting point for the next negotiation.

Red flags in the proposal

• No end date. Locum funding that runs "until fully staffed" with no calendar date attached.
• No milestones. No named targets for filling each role, by specialty and site, on a schedule.
• No dollar cap. An obligation to reimburse locum costs with no ceiling on total spend.
• Marked-up locum rates. Reimbursement based on the group's billed rate to you, not the group's actual cost to the staffing agency, with no invoices to check it against.
• No pipeline reporting. No regular update on interviews, offers and start dates for the roles being recruited.
• A subsidy reset built on "actual" costs. Language that lets the group use the ramp-up year's real spending, locums included, as the baseline for the ongoing subsidy that follows it.

What to require instead

Take each of these to healthcare counsel before you sign. None of it is unusual to ask for, and a group with a genuine recruiting plan should already have most of the answers.

• A written recruiting plan with milestones by role. Name each vacant position, by specialty and site, with a target fill date.
• A hard cap and end date on locum funding. A maximum dollar amount and a calendar date after which locum costs revert to the group.
• A declining schedule. Funded locum hours or dollars that step down over the ramp period instead of staying flat until they stop.
• Pass-through at cost, with invoices. Reimbursement tied to the agency's actual bill, not a markup, supported by documentation you can audit.
• Monthly locum reporting. Hours, rates, roles and agencies used, reported on a fixed schedule.
• The right to approve locum agencies. A say in which staffing firms the group uses, and at what rate ceiling.
• Penalties or credits for missed milestones. A financial consequence, not just a conversation, when a target fill date passes.
• A defined path for year two and beyond. Either a fixed subsidy figure or a reconciliation against an agreed, pre-set budget, not the group's realized first-year costs. Our explanation of an open-book subsidy structure walks through how that reconciliation should work.
• A credentialing and enrollment check on the recruiting timeline. Ask the group to build its hiring targets around real approval timelines, not optimistic ones. CMS gives its Medicare contractors up to 50 calendar days to process an online enrollment application that needs no follow-up, and up to 85 days when more information is required.⁶ Under federal rule, a clinician's Medicare billing privileges begin no earlier than the filing date of an approved enrollment application.⁷ A recruiting plan that assumes a new hire can bill from day one is not a realistic plan.

Worked example: an 18-month locum ramp

The figures below are made up to show the arithmetic, not to benchmark or predict an actual cost.

Assume a new group has four open clinician positions to fill while it recruits, and assume, purely for illustration and not as a sourced figure, a locum premium of $10,000 per position per month over what an employed clinician would have cost.

An open-ended arrangement that runs the full 18 months the proposal originally asked for costs 4 positions × 18 months × $10,000, or $720,000 in premium alone, on top of whatever base staffing cost the hospital would have paid anyway.

A capped, declining schedule looks different. Suppose the agreement funds all four positions for months one through three, three positions for months four through six, two positions for months seven through nine, then zero. That is 12 plus 9 plus 6, or 27 position-months, at $10,000 each: $270,000.

Same starting point, same assumed premium. The declining, capped schedule costs $450,000 less and ends the ramp nine months sooner, because it makes slow recruiting expensive for the group instead of only for the hospital.

Checklist before you sign

• Ask for a written recruiting plan with named roles, sites and target fill dates.
• Put a hard dollar cap and a calendar end date on locum funding.
• Require a declining schedule instead of flat funding until a cutoff.
• Require pass-through at the agency's actual cost, with invoices you can audit.
• Require monthly reporting on locum hours, rates, roles and agencies.
• Reserve the right to approve which locum agencies the group uses.
• Build in penalties or credits for missed hiring milestones.
• Decide, before you sign, how year two and beyond will be set, and do not let it default to the group's actual first-year spending.
• Check the group's hiring timeline against real credentialing and payer enrollment timelines with your medical staff office and counsel.
• Route every legal and compliance question, including fair market value, through healthcare counsel before you agree to it.

Sources

1. J. Cross, Y. Lolla, C. Fichman, M. Weingarten and M. Howley, "The Cost of a Locum: A Simulation to Determine When You Are Paying Too Much for Your Anesthesia Locum Tenens Coverage," Cureus, April 2024. https://pmc.ncbi.nlm.nih.gov/articles/PMC11115997/ ↩ ↩²

2. Barton Associates, "CRNA Salary 2026: Nurse Anesthetist Pay, Hourly Rates, and Locum Income," Barton Associates, undated. https://www.bartonassociates.com/crna-salary-guide/ ↩

3. David B. Fink, "The Anesthesiologist and CRNA Staffing Market," Stout Industry Update, February 2026. https://www.stout.com/en/insights/industry-update/anesthesiologist-crna-staffing-market ↩

4. CHG Healthcare, "State of Locum Tenens: 2025 Report," CHG Healthcare, undated. https://chghealthcare.com/chg-state-of-locum-tenens-report ↩

5. Rachel Carey and Elizabeth Sullivan, "Success in Anesthesia Agreements: Key Strategies for Effective Anesthesia Contracting," McDonald Hopkins Insights, August 2025. https://www.mcdonaldhopkins.com/insights/news/success-in-anesthesia-agreements-key-strategies-for-effective-anesthesia-contracting ↩

6. Centers for Medicare & Medicaid Services, "Medicare Program Integrity Manual, Chapter 10 – Medicare Enrollment, Section 10.5: Timeliness and Accuracy Standards," CMS Internet-Only Manual (Rev. 13717), July 2026. https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/pim83c10.pdf ↩

7. U.S. Code of Federal Regulations, "42 CFR § 424.520 – Effective date of Medicare billing privileges," via Legal Information Institute, Cornell Law School, current text. https://www.law.cornell.edu/cfr/text/42/424.520 ↩