Healthcare Contractor Bill Sparks Debate Over Access and Worker Rights

As healthcare workforce shortages continue to strain hospitals and clinics across the country, lawmakers are weighing whether a longstanding staffing model deserves special protection under federal labor law.

At the center of the debate is H.R. 8347, the RURAL Healthcare Act, legislation that would clarify that qualified locum tenens physicians and advanced practice providers are independent contractors under the Fair Labor Standards Act and National Labor Relations Act.

Supporters argue the bill would preserve access to care in underserved communities, while critics contend it could weaken worker protections and encourage misclassification.

The bill is currently pending review in the House Committee on Education and the Workforce.

The legislation arrives as rural healthcare providers face persistent staffing shortages and mounting recruitment challenges.

“Locum tenens has grown into a vital and substantial sector of the healthcare workforce,” said Jonathan Wolfson, visiting fellow at the Institute for the American Worker, where he studies independent contracting and self-employment.

“Locum tenens physicians, advanced practice registered nurses, physician assistants, and pharmacists fill both short- and longer-term gaps at hospitals, clinics, and practices across the country, allowing facilities to remain open and patients to receive care that might otherwise be unavailable,” he said. “These temporary providers deliver care where the alternative might be no coverage at all.”

Specialty Credential: Talent Acquisition

Rep. Ryan Mackenzie, R-Pa., supports the legislation, and said that many rural communities depend on temporary clinicians to ensure continuity of care.

“Imagine a situation in which there is only one specialty provider within a hundred miles of your home,” Mackenzie said. “If that provider changes careers, takes leave to care for a family member, or simply goes on vacation, patients can find themselves without care.”

The staffing challenges are significant. Mackenzie noted that “it takes an average of 189 days to recruit a primary care position and 226 days for a specialist,” making temporary coverage critical for many facilities.

Supporters argue that these clinicians operate differently from traditional employees. Locum tenens providers generally choose their assignments, determine their availability, and frequently work across multiple facilities. Assignments range from a few days to several months.

“Like independent contractors in many other occupations, these providers value the flexibility and freedom this model offers,” Mackenzie said.

Industry representatives maintain that locum tenens clinicians are not simply another category of gig worker but highly trained professionals who voluntarily choose flexible work arrangements.

Autumn Begay, senior corporate counsel at CHG Healthcare, a healthcare staffing company based in Midvale, Utah, emphasized that the legislation is narrowly focused.

“This bill is not a rewrite of labor law,” she said. “It is not a statement about every worker-classification debate in the country. It is a focused response to a specific healthcare problem — communities that need clinicians should not lose access to them because broad employment regulation fails to account for the unique nature of locum tenens medical practice.”

Approximately 14% of U.S. physicians reported working locum tenens in 2025, according to Begay, while an estimated 165,000 physicians have participated in locum tenens work at some point during their careers.

Perhaps more importantly, she noted that 71% of all jobs worked by locum tenens physicians are at worksites located in federally designated Health Professional Shortage Areas.

“In many communities, they make the difference between an open clinic and shuttered doors; between a hospital maintaining a service or being forced to close it, between a patient receiving care close to home or going without care altogether,” Begay said.

Worker Flexibility Versus Worker Protections

Rep. Ilhan Omar, D-Minn., warned that worker classification should not be viewed solely through the lens of operational flexibility. She said that healthcare employers increasingly rely on subcontractors, staffing agencies, and independent contractors to reduce labor costs and employer obligations.

“H.R. 8347 would create a special carveout that allows employers to avoid responsibilities that apply in virtually every other workplace,” she said. “And it would replace long-standing legal standards with a blanket rule that makes it easier to classify healthcare professionals as independent contractors, regardless of the realities of their working relationship. The result is often the same. Employers reduce their responsibilities and their bottom line, while workers lose critical rights and protections,” she said.

Among the concerns Omar cited are the potential loss of overtime protections, unemployment insurance, workers’ compensation coverage, and collective bargaining rights.

“My colleagues may argue that automatically classifying some physicians and advanced practice providers as independent contractors will increase flexibility and help address workforce shortages,” Omar said. “But flexibility should not come at the expense of fundamental workplace safety and security.”

Rather than altering classification standards, Omar called for alternative approaches, including workforce development programs, provider training initiatives, loan repayment assistance, and targeted investments designed to recruit and retain healthcare professionals in underserved communities.

Resource: Talent Management

Lessons from California

Economic research on worker-classification laws is increasingly influencing the debate.

Liya Palagashvili, senior research fellow at the Mercatus Center at George Mason University in Arlington, Va., said that locum tenens clinicians represent a distinct labor-market segment that complements rather than replaces traditional employment.

“The data do not support claims that independent clinical work is overtaking traditional healthcare employment,” she said. “Independent work and traditional employment are often not in conflict. They can operate side by side, meeting different needs for workers and businesses.”

Palagashvili also noted that the clinicians covered by the legislation “are not the typical workers at the center of misclassification debates. These are highly educated, licensed professionals who provide medical care in a highly regulated environment. These are also high-paying occupations.”

And according to Census Bureau data, 96% of self-employed clinicians report having health insurance, she said.

Her broader concern centers on the unintended consequences of restrictive classification rules. Research she conducted on California’s AB 5 law found that stricter independent-contractor standards reduced both self-employment and overall employment.

“We found that after AB 5 went into effect, self-employment in California fell by 10.5% in nonexempt occupations, and overall employment fell by 4.4%,” Palagashvili said. “We found no robust evidence that traditional employment increased enough to offset these losses.”

For healthcare organizations facing chronic staffing shortages, that finding is particularly relevant.

“The central point is that locum tenens helps address a labor-supply problem,” Palagashvili said. “When healthcare markets face vacancies, call-coverage needs, recruiting gaps, or shortages in rural areas, the relevant question is often not whether a facility will hire a permanent W-2 employee instead. The relevant question may be whether patients receive care at all.”