Should a Lawyer Review My Physician Employment Contract?November 4, 2020
While some contracts in the workplace may be straightforward, physician employment contracts are more complex. Health care is highly regulated, and these contracts can be complicated, especially for those with no legal experience. Once signed, physician employment contracts are legally binding. Signing them without guidance from a lawyer can lead to serious consequences later on.
Tips for the Interviewing Process
Medicine is a demanding field, and physicians seeking their first or subsequent professional positions may be finishing residencies, taking boards, working demanding schedules, and looking for new places to live and practice. As a result, they may not be able to give 100 percent of their attention to the interviewing process or the contract. They may end up focusing only on the salary and what the interviewer is promising them.
It is essential to ask many questions about the job when being interviewed and to write everything down. Writing down the questions ahead of time is also helpful, and if there is a formal job description, this should be saved in an easy-to-retrieve location. Inquiring about how the salary and duties are determined, patient assignment protocols, and how often the physician needs to be on call are good places to start. If the position was held by a physician who left the practice, it is a good idea to find out why.
What Should the Salary and Benefits Include?
The first element that should be looked into is compensation. Physician employment contracts can be based on fixed compensation or set salaries that do not depend on doctor performance. New physicians are more likely to be offered these fixed compensation packages. Variable compensation offers formulas and are more common with experienced doctors. These models are based on doctor performance. If the physician is an independent contractor, this needs to be noted in the contract since it affects pension benefits and taxes.
There may be performance benchmarks in the contract. These can include billings, productivity, and number of patient visits. Before signing, the physician should understand the compensation structure completely. It is also a good idea to research the average salary range for the type of practice in that particular region. Salaries may be higher in metropolitan areas and lower in other parts of the country.
Examining the Health Care Package
The potential health care package should also be closely examined, including choices for coverage, premiums, deductibles, and copays. Many employers also offer life insurance as well. Other benefits may include bonuses, severance pay, and the following:
- Funding to complete continuing medical education
- Payment of student loans
- Payment of licensing fees
- Payment of dues to professional societies
- Liability and disability insurance
- Malpractice insurance
Additional fringe benefits include retirement plans and compensation for the following:
- Travel expenses
- Education leave
- Hospital staff fees
- Drug Enforcement Administration registration fees
- Books and professional journals
These benefits can be highly desirable, but some can come with a cost. A physician who accepts these may be required to remain working with the employer for a specified amount of time. It is also important to understand how much paid time off (PTO) is offered.
What are the Job Requirements and Terms?
Physician agreements need to specify the kind of medicine that will be practiced and how many hours the physician is expected to work. There should also be details about on-call hours, availability, outpatient care responsibilities, and administrative duties. Physicians will also want to know how often they will be receiving job performance reviews and salary increases.
Another important part is the length or term of the contract; this should have a starting date and duration. It should also state if the contract can be terminated early if appropriate notice is provided, describing the amount of time for notice and reasons for early termination. Some contracts specify termination without cause, meaning that either party can end the contract without reason and usually with a 90-day notice.
Contracts may also have termination with cause provisions. These protect employers from liability in cases where staff members engage in illicit or illegal behaviors. The causes should all be clear and easy to understand. All contracts should have an option to renew; if not, there should be a provision to negotiate the contract following a performance evaluation.
What About Non-Compete Clauses and Disputes?
Restrictive covenants may be written into the contract to prevent physicians from practicing in the stated medical specialty or geographical region for a set amount of time after the contract ends. Some non-competes may seem reasonable enough, but others are more restrictive and could negatively impact the physician’s career.
The possibility of a physician and employer dispute is very real, so this should also be addressed in the employment contract. Many employers will require that these disputes be settled by mandatory arbitration, meaning that the physician must agree to settle any legal disputes with the employer instead of going to court. The contract may also specify that the prevailing party will be compensated for any lawyer fees and court costs.
Prospective physician employees should also see if the contract has a clause indicating that they will be permitted to access patient medical records in case a lawsuit is brought against the physician after they have left the practice. If not, subpoenaing medical records can take a long time and can be expensive.
Can I Buy Into the Practice?
Some medical practices will allow their physician employees to eventually buy into their practices. There will be certain conditions of course, such as how the buy-in would work and the terms of the purchase. This is often done with a separate Letter of Intent, which may describe where the practice is located, how it will be valued, and the amount and terms of purchase. This letter should also specify how long it will take for the physician to become a full partner and how they will be able to participate in business decisions.
Should I Hire a Physician Lawyer After I Receive an Offer?
Receiving an offer from a prospective employer is exciting, but signing it without sound legal advice may not be the best choice. Physician employment contracts are different from other ones because of specific legal requirements. There are lawyers who specialize in physician employment agreements, and those who practice in certain areas may also be familiar with the medical organization that has made the offer.
It is common to negotiate employment contracts, but physician contracts have many points of discussion. An experienced lawyer will know what constitutes as a fair contract. It may not be possible to negotiate the salary if it is standardized, but there could be other ways to make up for that.
The contract may not have certain provisions that a physician could be unaware of; one of these is an inflation rider. This is a clause that takes into account the fact that the cost of living will rise as time passes. There could be other important items that were expressed verbally by the employer or in the Letter of Intent but are missing in the contract. This is why it is important for a prospective physician applicant to record everything that was discussed during the interview process and consult a lawyer.
Philadelphia Physician Lawyers at Sidney L. Gold & Associates, P.C. Negotiate Employment Contracts for Physicians
Our experienced Philadelphia physician lawyers at Sidney L. Gold & Associates, P.C. know how to evaluate physician contracts and thoroughly explain the details to our clients. Our team is ready to answer all of your questions. Call us at 215-569-1999 or complete our online form for a free consultation today. Located in Philadelphia, we serve clients throughout Wilkes-Barre, Scranton, northeast Philadelphia, Bucks County, Chester County, Delaware County, and Montgomery County.