Quick answer: Locum tenens is short-term contract work for physicians, NPs, PAs, and CRNAs, arranged through a staffing agency and paid at the highest rates of the three. PRN work ties a clinician to one facility’s internal on-call pool. Per diem work spans multiple facilities with less notice and pays more than PRN but comes with no benefits.
Healthcare hiring has changed. Fewer clinicians want a rigid nine-to-five contract for life. More want control over their calendar, their pay, and their patients. That shift has pushed three work styles into the spotlight: locum tenens, PRN, and per diem.
These words get mixed up constantly, even inside hospital HR departments. Job postings use them interchangeably, and recruiters at a healthcare staffing agency use them loosely too. But the terms are not the same, and mixing them up can cost a clinician real money or lead them into an assignment that does not match their license.
This guide breaks down each work style in plain language. It also answers the one question almost every physician, nurse practitioner (NP), physician assistant (PA), and RN eventually asks: Is per diem the same as PRN? (Short answer: not quite. More on that below.)
What Is Locum Tenens?
Locum tenens is Latin for “to hold the place of.” A locum tenens clinician steps into a temporary role at a hospital, clinic, or health system, usually through a locum tenens staffing agency, while a permanent provider is on leave, a position sits vacant, or patient volume spikes.
Demand for this model keeps climbing as facilities across the country struggle to fill open roles; for the bigger picture, see Is There a Shortage of Doctors in the US?
Who Can Actually Work Locum Tenens?
This is the part most articles skip, and it matters. The term “locum tenens” is an industry-specific label. According to staffing agencies and organizations like the National Association of Locum Tenens Organizations (NALTO), it applies to:
- Physicians (MDs and DOs)
- Nurse practitioners (NPs)
- Physician assistants (PAs)
- Certified registered nurse anesthetists (CRNAs)
Registered nurses (RNs), LPNs, and CNAs do not fill “locum tenens” roles. Temporary nursing work for RNs is called travel nursing, not locum tenens. This distinction is not just semantics; it reflects how the two staffing models are built. Locum tenens providers are almost always 1099 independent contractors hired for their independent clinical judgment, while travel nurses typically work as W-2 employees of a staffing agency under a facility’s direct supervision.
If a job posting calls a standard RN, LPN, or CNA role “locum tenens,” treat that as a recruiter’s terminology mix-up rather than a legal designation. You will almost certainly be hired as a travel nurse under W-2 supervision, not a 1099 independent contractor.
How Locum Tenens Assignments Work
- Length: Anywhere from a single day to 12 months, though most run a few weeks to a few months
- Setting: Hospitals, outpatient clinics, rural health centers, state hospitals, community health centers, and increasingly, correctional facilities and behavioral health centers
- Credentialing: Requires full credentialing and, in most cases, hospital privileging through the facility’s Medical Staff Office (MSO) before the first shift
- Licensing: Physicians can often speed up multistate licensing through the Interstate Medical Licensure Compact (IMLC), an agreement that includes 46 member jurisdictions (44 states, the District of Columbia, and Guam), with 42 currently active and issuing licenses. The remaining jurisdictions are in the process of rolling out implementation.
- Pay structure: Usually a day rate or hourly rate, often with travel, lodging, and malpractice insurance (often “occurrence-based” coverage) included by the agency
A Billing Detail Almost No One Mentions
Medicare has a specific compliance rule for locum tenens billing that most career blogs completely overlook. When a permanent physician is temporarily absent, the practice can bill Medicare for the substitute’s services under the absent physician’s National Provider Identifier (NPI) using a Q6 modifier for up to 60 continuous days. This is officially called a Fee-for-Time Compensation Arrangement.
However, there is a massive trap here: CMS guidelines do not allow the Q6 modifier to be used for non-physician practitioners, including NPs, PAs, and CRNAs. If an NP covers a locum assignment, they cannot bill under Q6; they must be independently enrolled with payers and bill under their own NPI, even for short-term coverage. Failing to make this distinction is one of the most common triggers for billing audits.
Locum Tenens Pros and Cons
Pros:
- Highest earning potential of the three models, especially in high-demand specialties like emergency medicine, psychiatry, anesthesiology, and hospital medicine
- Full control over which assignments to accept
- Exposure to different care settings, patient populations, and electronic health record (EHR) systems
- Agency-covered malpractice insurance and often travel/housing stipends
Cons:
- Independent contractor (1099) status means self-funded taxes, health insurance, and retirement savings
- No guaranteed hours between assignments
- Credentialing paperwork for each new facility takes time
- Frequent travel can wear down clinicians who value routine
What Is PRN Work?
PRN stands for the Latin phrase pro re nata, meaning “as the situation demands.” A PRN provider works on an as-needed basis for one specific facility, unit, or employer.
How PRN Scheduling Works
Here’s the part that answers one of the most searched questions on this topic: how does PRN scheduling work?
- A PRN clinician stays on a facility’s internal staffing pool
- The unit calls or messages the clinician when a shift opens, often for a specific department like the ICU, ER, or med-surg floor
- Many employers set a minimum shift requirement, such as one or two shifts per month, to keep the clinician’s status active
- Shifts are typically picked up with more advance notice than a same-day per diem call-out
PRN clinicians are usually classified as part-time W-2 employees, not independent contractors. That single detail explains a lot of the confusion between PRN and per diem, since both feel flexible on the surface but sit in different tax and benefits categories underneath.
PRN Pros and Cons
Pros:
- Flexible schedule without a full-time commitment
- Familiarity with one facility, one EHR system, and one care team
- Some employers extend limited benefits, like a retirement match or shift differentials, even without guaranteed hours
- Lower onboarding friction since credentialing happens once
Cons:
- Pay is often close to, or only slightly above, staff-nurse or staff-physician rates
- Shifts are not guaranteed, and slow seasons mean fewer calls
- Career growth and leadership opportunities are limited compared to full-time staff roles
What Is Per Diem Work?
Per diem is Latin for “per day.” A per diem clinician also works on an as-needed basis, but the arrangement tends to be broader than PRN. Per diem professionals often work across multiple facilities, sometimes through a staffing registry or agency, rather than staying tied to one employer’s internal pool.
How Per Diem Differs From PRN in Practice
- Employer relationship: PRN usually means one employer; per diem clinicians often float between several facilities or a facility network
- Notice window: Per diem shifts are frequently confirmed with less advance notice, sometimes just hours before the shift starts
- Onboarding: Because per diem clinicians move between locations, orientation is minimal; they are expected to adapt fast with little hand-holding
- Pay: Per diem rates commonly run higher per hour than PRN, since the tradeoff is less job security and no benefits
The 1099 Per Diem Shift: While traditional hospital per diem pools classify you as a W-2 employee, the rise of modern digital nurse-matching apps has shifted many per diem roles to 1099 independent contractor status. If you pick up per diem shifts through an app, you are likely responsible for withholding your own taxes, a major legal distinction that is currently the subject of intense IRS and labor law scrutiny.
Some hospital systems use “per diem” and “PRN” as interchangeable internal job titles. That is exactly why so many clinicians end up searching PRN vs per diem and getting three different answers from three different sources. The terms overlap in practice, but where a facility does draw a hard line, per diem usually points to broader, multi-site, lower-notice work, and PRN points to a single-facility internal pool.
PRN vs Per Diem: Are They the Same Thing?
Short answer: mostly similar, technically distinct.
| Factor | PRN | Per Diem |
| Employer relationship | Single facility or health system | Often, multiple facilities or a staffing registry |
| Employment classification | Usually part-time W-2 | Traditionally W-2, but increasingly 1099 via digital staffing apps |
| Notice for shifts | Days to weeks | Hours to a few days |
| Benefits | Sometimes limited benefits | Rarely any benefits |
| Orientation | One-time, facility-specific | Minimal; expected to adapt quickly |
| Best for | Clinicians who want flexibility but one home base | Clinicians who want maximum schedule freedom |
What does “PRN per diem” mean when a job posting uses both terms together? In most cases, the employer is simply signaling “as-needed, no guaranteed hours,” and using the labels loosely. Always confirm directly with HR or the recruiter whether the role ties the clinician to one unit (PRN-style) or allows multi-site work (per diem-style), since pay and scheduling expectations hinge on that answer.
Locum Tenens vs PRN vs Per Diem: Full Comparison |
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|---|---|---|---|
| Factor | Locum Tenens | PRN | Per Diem |
| Who qualifies | Physicians, NPs, PAs, CRNAs | RNs, NPs, PAs, physicians, allied health staff | RNs, NPs, PAs, physicians, allied health staff |
| Employment type | 1099 independent contractor | Part-time W-2 employee | W-2 or 1099, depending on the agency |
| Assignment length | Days to 12 months | Ongoing, shift-by-shift | Ongoing, shift-by-shift |
| Number of employers | One agency-arranged facility at a time | One facility | One or several facilities |
| Credentialing scope | Full facility credentialing and privileging each assignment | One-time, facility-specific | One-time per facility joined |
| Malpractice coverage | Usually agency-provided | Usually employer-provided | Varies by agency or facility |
| Travel required | Often, though local locum roles exist | Rarely | Rarely |
| Pay structure | Day rate or hourly, generally highest | Hourly, close to staff rates | Hourly, moderate premium over staff rates |
| Benefits | None (self-funded) | Sometimes limited benefits | Rarely any benefits |
Which Option Pays More?
Pay depends heavily on specialty, state, and demand, but a general pattern holds across the industry:
- Locum tenens pays the most on average. Physicians working locum tenens full time often out-earn permanently employed peers by a wide hourly margin, and high-demand specialties like anesthesiology and emergency medicine see especially strong rates. Locum NPs and PAs typically earn well above standard staff pay, with premiums for rural or hard-to-fill locations.
- Per diem typically sits in the middle, offering a real pay bump over staff rates in exchange for zero benefits and no guaranteed hours.
- PRN usually pays closest to standard staff-nurse or staff-physician rates, sometimes with a modest differential, but can include limited benefits that offset the lower hourly number.
The tradeoff is consistent across all three: higher hourly pay generally comes with less job security and fewer built-in benefits.
Locum Tenens Demand and Compensation Trends in the U.S.
Industry pay data (compiled from staffing-industry compensation surveys):
- 14% of all active U.S. physicians currently work locum tenens jobs, a figure that has nearly tripled over the last decade.
- Anesthesiology and Emergency Medicine are two of the highest-demand specialties; anesthesiology alone has seen a 55% surge in projected locum demand.
- Locum physicians earn a significant premium, with average daily rates across specialties sitting at approximately $2,800 per day.
- Locum anesthesiology pay climbed from $275–$325/hr in 2024 to $300–$400+/hr in 2025/2026.
- Locum NP and PA pay typically runs $70–$110+/hr, well above standard staff pay.
Government workforce data:
- The U.S. faces a projected shortage of up to 86,000 physicians by 2036
- HRSA’s Bureau of Health Workforce projects a shortage of 141,160 full-time-equivalent physicians by 2038, affecting 30 of 35 specialties tracked
- Nonmetro areas are projected to face a 58% physician shortage by 2038, compared to just 5% in metro areas
These workforce gaps are the single biggest reason demand for locum tenens, PRN, and per diem coverage keeps growing, especially in rural and underserved areas.
For a full specialty-by-specialty breakdown, read What Are Locum Tenens Salaries by Specialty?
Which Option Is Best For…
New graduates: PRN work is usually the safer starting point. It builds clinical confidence in one setting before taking on the independence that locum tenens or per diem work demands.
Career changers exploring new specialties or settings: Per diem work offers a low-commitment way to sample different facilities, from outpatient clinics to state hospitals, without a long-term contract.
Clinicians chasing true work-life balance: Locum tenens gives the most control over the calendar, including the ability to take entire months off between assignments, something that is much harder to do as a W-2 PRN or per diem employee.
High earners focused on maximizing income: Locum tenens wins here, particularly for physicians and NPs in high-demand specialties like psychiatry, hospital medicine, and anesthesiology, and for clinicians willing to work in rural or underserved areas, including community mental health and correctional healthcare settings.
Locum Tenens NP Contracts vs Permanent NP Jobs
This comparison deserves its own breakdown, since NPs increasingly weigh both paths.
| Factor | Locum Tenens NP Contract | Permanent NP Job |
| Employment status | 1099 independent contractor | W-2 employee |
| Schedule control | Full control; NP chooses assignments | Fixed schedule set by employer |
| Pay | Higher hourly rate, no benefits included | Lower hourly rate, includes benefits |
| Credentialing | Repeated for each new facility | One-time, ongoing at same site |
| Scope of practice | Governed by the state where the assignment is located | Governed by home-state licensure |
| Career growth | Limited leadership track, strong clinical variety | Clear promotion path, less variety |
| Job security | Assignment-based, no guaranteed renewal | Ongoing, ideally stable |
One detail NPs cannot skip: scope of practice laws vary by state. Some states, including Washington and Maine, allow NPs to practice independently. Others, including Georgia and North Carolina, require a supervising or collaborating physician relationship. Before accepting any locum tenens NP contract, confirm the assignment state’s scope-of-practice category and whether a formal collaboration agreement needs to be in place before day one. The state board of nursing in the assignment location is the authoritative source, not the staffing agency.
Choosing What Fits Your Career Goals
There is no universally “best” option among locum tenens, PRN, and per diem work. Each one solves a different problem:
- Choose PRN for steady flexibility inside one familiar facility.
- Choose per diem for maximum shift-picking freedom across multiple sites.
- Choose locum tenens for the highest pay, the most schedule control, and exposure to varied care settings, provided the license (MD, DO, NP, PA, or CRNA) qualifies for it.
The right fit comes down to income goals, tolerance for schedule unpredictability, and whether benefits or hourly pay matter more right now. Reviewing open roles by category is a practical next step for narrowing down which arrangement lines up with a specific specialty and location.
Still weighing locum tenens, PRN, or per diem? If you’re looking for healthcare jobs and exploring your options, connect with our team, we’ll help you figure out what fits best.
A Few More Answers to Common Questions
If I work 1099 locum tenens or per diem, do I need to set up an LLC?
You do not have to legally, but it protects your personal assets and saves taxes. By default, the IRS treats 1099 income as a Sole Proprietorship. Establishing a Single-Member LLC (specifically one taxed as an S-Corp) provides liability protection and can significantly lower your self-employment tax burden by allowing you to take a portion of your income as distributions rather than salary.
What is the difference between locum tenens NP contracts and permanent NP jobs?
Locum tenens NP work is short-term, 1099-based, and pays more per hour with no benefits. Permanent NP jobs are W-2, offer benefits and stability, and come with a clearer path to leadership.
What is “low census” cancellation, and how does it affect PRN and per diem workers?
“Low census” is when a hospital cuts shift staff because patient volume is low. Because full-time W-2 staff and contract travel nurses have guaranteed hours, PRN and per diem clinicians are always canceled first. Relying strictly on per diem work exposes you to sudden income drops.
