Understand the concepts of an “Entire Agreement” contract provision. Physicians weighing an employment agreement with a hospital or with a physicians practice group especially benefit from fully comprehending this type of provision in an offered employment contract.
Typically, upon your leaving, a Non-Compete provision will come into play. A hospital or physician group will want to try to restrict and limit it as much as possible. Make sure you understand both the Termination and the Non-Compete provisions, and you will be much happier both in your current contract, and in the event that you need to move on and look for another job.
We look at Buy-In and Professional Liability Insurance provisions in this fourth part in the Physician Contracting 101 series. A Physician Employee Contract often includes a provision for a “Buy-In” of the practice, and sometimes of a building, plus a Professional Liability Insurance provision. Physicians considering employment with a hospital or a physicians’ group will benefit from comprehending these provisions, before entering into an employment contract.
Compensation and Bonus provisions in physician employment contracts are incredibly important. In my practice in dealing with physicians, many times if they are unhappy with the contracts they are currently in, it has to do with compensation and how it is being determined. It is incumbent upon you, and me as your counsel, or whoever your counsel is, that you make sure you understand how the compensation provisions actually work. In this short video, Physician Contracting: Compensation and Bonus Provisions, we look closely at compensation and what contract language about compensation means. There is a lot to remember as you look at your Compensation package, and it is vitally important.
Much of my practice focuses on physicians’ and physician groups’ business and contracting needs, including employment contracts specifying physician duties and responsibilities. We are going to look at some key provisions within your employment contract, specifically those on physician duties and responsibilities.
Physician duties and responsibilities are identified within your employment contract in provisions that may seem innocuous and unimportant. In reality they are vital. The provisions set forth in great detail the physician duties and responsibilities to the employer, whether that employer is a physician group, hospital or other entity.
Read carefully to determine expectations: Do you have an hourly expectation? Do you have a certain number of days provision? How often are you expected to participate in Call coverage? Is Call equally divided among the number of physicians, or do you as a newer physician carry a heavier burden? You should know this information before entering the contract. Make sure that you are comfortable with your defined duties and responsibilities as a physician.
You also need to examine what, if anything, you can do outside of your employment arrangement. Many contracts have provisions that set forth physician duties and responsibilities in this regard. Often they specify that you are not to provide any medically inclusive services. For instance, if you are thinking about teaching, or providing locum tenens coverage, you need to make sure that you are able to do so under your contract.
A contract may provide that if you serve as an expert witness, or assume teaching responsibilities, or provide locum tenens coverage, any compensation for those services will go to your employer rather than to you. If you want to make sure that this does not occur, be sure that the contract language provides that the stipend or compensation will actually be coming to you.
Physicians increasingly consider employment as a viable option for conducting a healthcare practice, indicative of the current national trend toward hospitals employing physicians. In my practice, I work extensively with physicians and physician groups. I am introducing a series of brief videos to provide a preview of essential elements of employment contracts offered by a hospital, a hospital provider, or a physician group.
This first Session provides an overview of some fundamental provisions within such employment agreements. Session 2 identifies major negotiable terms, including the duties and responsibilities of the physician. Session 3 discusses Compensation and Benefits provision, while Session 4 looks at Buy-Ins and professional liability insurance. Session 5 reviews Non-Compete and Termination provisions, which impact contract maneuverability. Finally, the sixth session of the series provides perspective on other major provisions within a physician’s employment contract which are often overlooked as boilerplate, but are important for the future of the employed physician relationship, and warrant consideration.
Based on the current playing field and environment, the trend is clear that hospitals and physicians are entering into employment relationships. According to the 2012 edition of AHA Hospital Statistics, hospitals’ employment of physicians jumped 32% from 2000 to 2010. It is difficult to know whether this trend will continue. History has shown that it may switch back as it did the last time such a trend started. I recently attended a very good conference, “Hospital- Physician Contracts: Survival Strategies,” which was put on by Horty Springer, a Pittsburgh law firm, and three of its attorneys, Dan Mulholland, Henry Casale, and Phil Zarone. Similar to information identified in their presentation, the issues that physicians and hospitals must deal with are enormous. At the top of my list, I feel the key issues include: * the economics (salary, benefits, nonmonetary compensation, vacation, call coverage) of the arrangement, * the medical staffing/control issues, and * the numerous regulatory restrictions, such as Stark, etc., that impact such relationship. Physicians thinking of becoming employed by hospitals or selling their medical practice to a hospital need to carefully consider these issues and their impacts.