Physician Employment Contracts

Robert Robinson, MD, MS, FACP

Assistant Professor of Clinical Medicine

SIU School of Medicine

The presenter has no disclosures and no conflict of interest relevant to the content of this presentation

The presenter is not a lawyer

This presentation does not represent legal advice

Disclosures and Disclaimer

Little published data

Considerable variability

Confounded by nondisclosure clauses

Physician Employment Contracts

Patient Protection and Affordable Care Act "The economic forces put in motion by the [Affordable Care]

Act are likely to lead to vertical organization of providers and accelerate physician employment by hospitals and aggregation into larger physician groups.“

Ann Intern Med. 2010;153(8):536-539.

75% of all physicians predicted to be employed by hospitals in 2014 Merritt Hawkins 2012 Review of Physician Recruiting Incentives http://www.merritthawkins.com/uploadedFiles/MerrittHawkins/Pdf/mha2012survpreview.pdf

Healthcare industry trends

The results…

2013 Medscape Physician Compensation Reporthttp://www.medscape.com/features/slideshow/compensation/2013/public

Parties involved

Duration

Duties

Compensation

Transferability

Termination

Basic Contract Components

Parties involved

Duration

Duties

Compensation

Transferability

Termination

Basic Contract Components

Read and understand before signing

No “Standard Contract”

Every item is negotiable, but organization may not be willing to negotiate

Professional help may be needed with complex contracts.

Parties involved

Duration

Duties

Compensation

Transferability

Termination

Basic Contract Components

Who are you actually working for?

Parties involved

Duration

Duties

Compensation

Transferability

Termination

Basic Contract Components

Typically 2-3 Years

Is contract renewable?

Parties involved

Duration

Duties

Compensation

Transferability

Termination

Basic Contract Components

Defines your job responsibilities

Caution with vague language

Parties involved

Duration

Duties

Compensation

Transferability

Termination

Basic Contract Components

www.MGMA.org

$365 for members

Medscape Physician Compensation Report http://www.medscape.com/features/slideshow/compensation/2013/public Free

Merrit Hawkins Salary and Compensation Survey http://www.merritthawkins.com/compensation-surveys.aspx Call for price

Modern Healthcare Compensation Survey http://www.modernhealthcare.com/article/20130713/DATA/130709976 $249

SHM State of Hospital Medicine Survey (Hospitalists) http://www.hospitalmedicine.org/AM/Template.cfm?Section=Surveys2&Template=/CM/HTMLDisplay.cfm&ContentID=29857 $259 (member price)

Other Sources of Compensation Data

Parties involved

Duration

Duties

Compensation

Transferability

Termination

Basic Contract Components

Protects your job if practice is purchased.

Can your contract be sold to another practice?

Parties involved

Duration

Duties

Compensation

Transferability

Termination

Basic Contract Components

How contract ends…Expiration (term over)With cause (“Fired”)

Without cause (any reason)

Mutual agreement, usually with notice

Parties involved

Duration

Duties

Compensation Signing Bonuses

Malpractice Insurance

Transferability

Termination Noncompete clauses

Areas for Scrutiny

How much?

When?

Repayment may be required if you do not complete the term of the contract

It is essential you understand repayment terms

May be prorated by percentage of contract completed

Signing Bonuses

Limits – usually per claim and aggregate ($1m/$2m)

Type of Malpractice Policy

Occurrence (becoming rare)

Claims made

Tail insurance required when changing jobs

Who pays for tail insurance?

Malpractice Insurance

Cost of Malpractice Insurance

Tail insurance typically costs 1.5 - 2x the annual premium

http://www.acponline.org/residents_fellows/career_counseling/malpractice_insurance.htm

Legal in most states

Should have a clearly defined Duration (1-2 years)

Location City, County

Radius

Zip or Area Code(s)

Scope of practice

Buy out option

Noncompete Clauses

States That Prohibit Noncompete

VirginiaProhibited if employer is a general corporation

TennesseeProhibited unless employeris hospital or medical school practice plan

CA

MT ND

SD

American Health Lawyers Association. Restrictive Covenants in Physician Employment Relationshipshttp://www.bassberry.com/files/upload/AHLANonCompeteJuly2010.pdf

Identify and prioritize problem areas

Ask potential employer if contract is negotiable

Start by negotiating your highest priority area(s)

Have a plan if negotiations fail

Negotiating

When to get professional help

Lawyer

Questions about

Definitions

Enforceability

Help with Negotiation

Accountant

Questions about

Compensation

RVU based Productivity

Share of collections

Bonuses

It is essential to hire professionals with healthcare employment contracting experience.

Questions?