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Employment Contracts: Tips For New Physicians and Health Professionals

Headshot of attorney George IndestBy George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

This is intended to provide an introductory review of the basics of contracting for new physicians and health professionals, primarily by discussing employment agreements. We will highlight
many of the common provisions found in employment contracts, along with many of the mistakes and pitfalls that we see in our day-to-day practice.

After reading this, it is our hope that new physicians and other health professionals will understand the common language and terms found in employment contracts. Therefore, they can recognize mistakes commonly made by physicians and health professionals when negotiating them. We hope to help make both employers and employees more knowledgeable about employment contracts so they can avoid potential problem areas and legal entanglements.

Our comments here are meant to provide general rules we have learned from our experience. However, please remember, every situation is different and there are exceptions to every rule.

Tip 1 – There is No Such Thing as a “Standard” or “Routine” Physician Employment Agreement.”
No two employment agreements are identical. Each must be reviewed on its own terms. It is important to consult with a healthcare lawyer experienced in negotiating employment contracts and evaluating health care business transactions.

Tip 2 – Everything is Negotiable.
Even though an employer may have what appears to be a “standard” employment contract for all physician employees, this can have changes, amendments, schedules, exhibits or terms that are varied from physician to physician or professional to professional. Generally, large employers are less likely to change their form to accommodate the physician than small organizations, but they can and often will. Small employers are often willing to make more changes to their written agreements.

If there are any changes, additions or clarifications you need to make to the contract, then put them in writing, sign them, incorporate them into the contract and attach them to the contract.

Tip 3 – Be sure the Wording of the Contract Represents Exactly the Agreements you Made Orally.
If it is different or not specified, the language in the contract will govern in any future dispute.

Tip 4 – Make sure the parties are identified.
In many contracts we review, the correct names of the parties, especially the employer, are not included. Often, the only identification of the employer is a fictitious business name or part of a fictitious business name. Additionally, many business entities are not incorporated in the state in which the job is located. There is a misconception that a corporation or limited liability company, its owners and directors have far greater legal protections in states such as Delaware. Therefore, a disproportionately greater number are incorporated or organized there.

Often, a large institution such as a hospital system or health maintenance organization (HMO) has a business entity to hire and manage its physician and other health professional employees. Sometimes a potential employee may incorrectly believe that he or she is being employed by the larger organization. More often, the business entity that employs the health professional is actually a wholly owned subsidiary corporation or company. Always be sure that the contract includes the complete name of any corporation or company, the state in which it is incorporated (or organized or registered), its address and its fictitious business name (sometimes called a d/b/a or “doing business as” name). We include the complete identities and addresses of each party to the contract in an addendum if they are not included in the main contract.

Tip 5 – Make sure that the employee or contractor is fully and consistently identified and treated as such throughout the contract.
In the case of physicians and many other health professionals, a medical group or business with which that person contracts may seek to treat him or her as an independent contractor instead of an employee. Independent contractors have far fewer rights and protections against the party with which they are contracting and have to incur a number of expenses that a true employer would have to pay otherwise.

It may be legally incorrect for a group or business to attempt to treat someone as an independent contractor instead of an employee. This may be attempted by someone who has received incorrect advice on how to evade taxes or to avoid paying legally required taxes and fees (such as Social Security deductions and workers compensations insurance payments). If the Internal Revenue Service (IRS), Department of Labor or Department of Finance scrutinizes the employing entity, it may result in an assessment of back taxes and penalties, stop work orders and other sanctions being taken against the employer.

In most cases, doctors, nurses, physical therapists, dentists, psychologists, nurse practitioners, physician assistants, mental health counselors, massage therapists, and other health professionals should be treated as employees. The law requires that an employer pay a portion of the taxes, social security and other government assessments for those employees. Being an employee usually requires the employer to include the employee in any health insurance, retirement plans or other employer benefit plans which the employer has. The employer is also required to incur the costs of withholding taxes, unemployment compensation assessments, social security payments and other government-required deductions and forwarding them to the correct government entity. This saves administrative costs an employee might otherwise have to incur.

If the health professional has his or her own professional service corporation (sometimes called a professional association or “P.A.”) or limited liability company (LLC) then this business entity can be contracted by another group or business as an independent contractor. The individually-owned P.A. or LLC is the employer of the health professional. Employees receive an IRS Form W-2 at the end of the year. This recaps the withholdings, Social Security, Medicare, unemployment compensation and other taxes and assessments deducted from their pay. Independent contractors receive an IRS Form 1099 at the end of the year with the total compensation paid to them reflected on it. Employers are vicariously liable for the negligent acts of their employees while they are within the scope and practice of their jobs. The company or group that retains an independent contractor is not liable for the negligent acts of the independent contractor under the same circumstances.

Regardless, it is important that a contract accurately identifies whether the health professional is an employee or an independent contractor. It must also consistently refer to and treat the individual as either an employee or an independent contractor throughout the contract. If the contract is one that an employer has taken and tried to modify without the help of an attorney, it may use the term, incorrectly or include conditions that violate the law or that negate the treatment desired. It is almost always far more advantageous for the individual being hired to be treated as an employee.

Tip 6 – Be Sure That You Receive a Signed, Dated Copy Back Before You First Start Working.
If you are an employee, be sure that you receive a copy of the contract back that has actually been signed and dated by the employer. One of the most common legal problems we encounter when we consult with an employee whose employer has broken the contract is the absence of a signed or dated copy of the contract. Anyone can type up a blank contract. There may be many preliminary drafts of a contract that are not agreed to or executed by the parties. How can you prove that this is the actual agreement between the parties if you do not have a copy that is signed by the parties?

Tip 7 – Make Sure That all Exhibits, Schedules, Addendums and Referenced Documents are Attached to the Contract.
We often see contracts that refer to attached exhibits for job requirements, bonus calculations, benefits, employer handbooks, employer code of ethics or conduct, etc. However, in many cases, these are not completed or not attached to the contract when it is signed. Make sure that any documents that are referred to by the contract are actually attached to it and are completed. These are part of the contract. Your copy is not complete without them.

Tip 8 – Amend the Contract, By Hand if Necessary, to Make It Consistent with the Agreement of the Parties.
A contract is not a sacred document. You may write on it, if necessary, to amend it. You may attach separate handwritten amendments to it. Just make sure any handwritten changes on the contract itself are initialed by each party. Make sure any amendments attached to it are signed and dated by each party to the contract. Remember, also, that the changes must be understandable. If a judge is later called on to read it and interpret it, it must be clear to the judge.

Under the general rules used to construe contracts, typed changes and amendments to preprinted forms take precedence over the preprinted portions. Handwritten changes and amendments take precedence over typed or preprinted portions, and spelled out numbers and dates supersede numerical ones (if there is a conflict). However, there must be evidence that these were agreed to by both parties (such as initials or signatures prove).

Tip 9 – Restrictive Covenants (Sometimes Referred To As Covenants Not To Compete) Are Enforceable By Law in Florida.
A covenant not to compete is common in most physician contracts. This clause prevents a departing physician from competing with the employer in a specific geographic area for a specific period of time. These restrictive covenants are, as a general rule, enforceable under Florida law. There are exceptions and defenses that can be used to defeat or prevent the enforcement of a restrictive covenant, especially in the case of a physician. However, unless you have money set aside to pay for litigation, expect to honor it if it is in the agreement. As an employee, your negotiation strategy should be to have it removed completely or reduce the period of time and reduce the geographic area as much as possible. Also, it should be worded so as to only apply to the office or location in which you actually work and not to the medical sub-specialty or type of practice in which you will work.

If you decide you are going to leave a group or practice and you may need to work in violation of a restrictive covenant, it is very important to plan ahead for this. Often strategies can be developed that will avoid litigation.

Tip 10 – Avoid Agreeing to Pay the Premium for Tail Coverage For Professional Liability (Medical Malpractice) Insurance, Especially If The Employer Terminates The Employment.
If you are not able to negotiate this away completely: a) reduce the percentage you agree to pay to fifty percent (50 %) or have it reduced to twenty-five percent (25%) for each year you are in the practice, and b) insert a provision that if you maintain the same insurance company or obtain retroactive coverage, this will be substituted for tail coverage. If you maintain your insurance with the same company, in reality, your “tail” is covered and you should need no additional tail coverage policy.

Tip 11 – Carefully Consider Clauses That Allow the Employer to Terminate the Agreement Without Cause on a 30 Day, 60 Day, 90 Day or 180 Day Notice.
Many agreements contain a clause allowing one party or both parties to terminate the agreement “without cause” by giving advance notice of so many days. With such a clause in your contract, you no longer have a one or two-year agreement. Instead, you have a 30 day, 60 days, 90 days or 180-day contract. Termination without cause provisions can work for you or against you. Regardless, the term of employment is shortened if there is one. Think about whether or not you can find another job and relocate in 30 days.

Tip 12 – Include a “Cure” Provision If There Is a “For Cause” Termination Provision in The Contract.
This a provision that requires the employer to provide you written notice of any deficiency or breach and allows you a certain period of time (usually anywhere from 10 to 30 days) to cure it.

Tip 13 – In the Contract Specify All Material Terms in a Promise to Make You a “Partner” or “Shareholder.”
A promise to make you a “partner” or “shareholder” in the practice after a certain period of time will not be enforceable unless all of the terms are specified in order for a court to enforce it (price, timing, percentage of ownership, method of payment of the buy-in, etc.). Think of an option to purchase a house. Unless all of the terms for a binding contract are set forth in writing and agreed to by the parties, it will not be enforceable. Also, remember that a promise to “consider” you as a “partner” or “shareholder” in a contract is just as worded. You may be considered and denied this important opportunity.

Tip 14 – A Good Contract Identifies Typical Schedule, Where the Physician Will Work and Expectations About Call.
A contract that simply states the physician will “perform the usual duties of a physician” does not give either party much information about the expectations of the other party. Attention to this section is particularly important for physicians who wish to work part-time, to work only a specific schedule, to work in a specific clinic; or who have special arrangements concerning call. This section can also be used to answer questions about what level of involvement in administrative duties is anticipated and whether certain community activities are expected.

Tip 15 – A Physician’s Compensation Should Be Set at a “Fair Market Value.”
Physician employment and compensation are subject to anti-kickback laws. Generally, a physician’s compensation must be set at a fair market value demonstrating reasonable compensation. Fair market value is determined by comparing the entire compensation package, including benefits, insurance and signing bonuses to industry standards for the relevant specialty and geographic market. In almost any compensation arrangement, the physician and the employer will be protected from legal scrutiny when the compensation is determined to be fair market value, as long as other requirements are also met (such as a written contract, signed by the parties, at least a year duration, etc.).

Compensation usually has two components: salary and benefits. The typical employment agreement will provide for a guaranteed salary for the first one to two years. After that, the physician is usually compensated based on production. It is important to remember that some medical groups might offer an employed physician an opportunity to buy into the group after a period of time as an employee. This type of agreement in which the physician would be able to purchase shares or options in the group may or may not be part of the initial employment agreement. Such arrangements might be referred to as a “buy-in” clause or “partnership” arrangement. It is very important to understand that if the group is a corporation or professional association (P.A., a type of corporation), then the ownership interest will be “shares” and the physician will become a “shareholder.” If the group is a limited liability company (LLC), then the ownership interest is referred to as a “membership” and the physician will become a “member.” The term “partner” is often incorrectly used to refer to either one.

It is preferable to have these types of arrangements drafted separately from the employment agreement since their duration is likely to be longer than the employment agreement. It is always necessary to have all of the details spelled out, including the buy-in price and how it will be paid. Otherwise, it will not be legally enforceable. Common benefits include: family health insurance, dental insurance, life insurance, an allowance for continuing medical education (CME), paid time off or vacation and sick pay, short-term disability insurance, long-term disability insurance, and retirement plans.

Tip 16 – Determine How Outside Employment and Compensation is Handled.
If outside employment is allowed, it’s imperative you know who is entitled to the income. Some employers prohibit outside employment, while others allow it but require that the income be turned over to the employer. If the physician anticipates “Moonlighting,” the physician should negotiate to minimize the employer’s control over outside employment and income from it. If the physician expects to be involved in significant volunteer activities working as a physician, the contract should say whether the employer has the right to approve or reject such volunteer activities.

Tip 17 – Pay Close Attention to the Termination Clause.
This is the single most important clause of a contract because it can dash the expectations of one or both parties. Close attention should be paid to the terms and the conditions. The termination section usually allows the employer to immediately terminate the physician’s employment if certain events occur, such as the physician losing his or her medical license, being convicted of a felony or dying. Many contracts also permit immediate termination if the employee’s license is restricted, if privileges are significantly restricted, or if the employee becomes disabled. Almost all contracts also permit early termination by either party by simply giving notice. While the notice periods range from 30 to 180 days, most physician employment agreements permit either party to terminate the agreement with 60 to 90 days notice. This type of term essentially leaves the physician with a contract that lasts only for the stated notice period.

Tip 18 – Negotiate Reasonable Access to Patient Records.
Most employment agreements provide that any patient records created by the employee belong to the employer. However, the physician should negotiate for reasonable access to those records even after the physician leaves the employer for the purposes of defending a malpractice action, a credentials committee investigation, or a Florida Department of Health (DOH) inquiry. Access to such records is very helpful, and sometimes necessary, to defend these kinds of actions.

Tip 19 – Intellectual Property Usually Belongs to the Employer.
If an employee performs research or publishes books or papers during work time or even after hours, that intellectual property usually belongs to the employer. That is unless there is a written agreement that gives the physician ownership rights to these materials. An employee may want to negotiate the ownership of that intellectual property before signing the contract.

Tip 20 – Attorney Fees in Contract Disputes.
Ordinarily, disputes are resolved in the courts, and each party will pay their own litigation costs and attorney fees. Sometimes, however, the parties will agree to use arbitration as an alternative way of resolving disputes. While each process has its advantages and disadvantages, arbitration is generally faster and less expensive than litigation. Unless the parties agree otherwise, each party to a lawsuit, mediation or arbitration ordinarily will pay his or her own attorney’s fees and costs. However, most physician employment agreements include a clause obligating the losing party to an enforcement action to pay for all legal fees of both parties. Most places in the U.S. follow the American Rule with regards to attorney fees. Under the American Rule, each party is responsible for its own attorney fees unless a statute or contract provides otherwise. Employment agreements very often include a provision that provides that the prevailing party is entitled to his/her attorney fees in any dispute under the contract.

Tip 21 – Read the “Boilerplate” Provisions.
Most employment agreements have a series of “boilerplate” provisions that usually come at the end of the agreement. These provisions may include important provisions and should be considered carefully. For example, very often there will be a provision that states the written contract in the final agreement of the parties. If something was negotiated that is not included in the contract it will be precluded by the boilerplate provision. Anyone negotiating a contract should be concerned with any promise to work it out later.

Tip 22 – Be Detailed and Specific on What Income Will Go to Employer and Any That May Be Kept by the Employee.
This tip is an expansion on Tip 16 – Determine How Outside Employment and Compensation is
Handled. Typical physician employment agreements will contain statements such as: “The physician agrees to devote his/her complete time and attention to the business of the employer.” Or they may contain a clause stating: “All income derived from professional services delivered by the employee shall belong to the employer,” or something similar.
This can be problematic if the employee:

A. Moonlights, for example by pulling shifts at a hospital’s emergency department on the weekends;
B. Has a separate medical practice or business on the side such as providing diagnostic studies, testing, counseling, etc.;
C. Works part-time somewhere else, such as at a walk-in or urgent care clinic;
D. Consults as a practice management consultant, a risk management consultant, etc.;
E. Serves as a medical expert reviewing patient records for attorneys and providing expert opinions;
F. Serves as medical director of nursing homes, or home health agencies;
G. Invents new medical inventions or technologies on his/her own time;
H. Teaches; or
I. Lectures or writes and receives honoraria.

I have been involved in several court cases where the physician took employment with a large healthcare system and had an oral understanding, never in writing or included in his/her written contract, that the employee could continue a part-time medical practice and keep all of the income from it. This only became a problem (a big problem) years later when the employer found out about it and decided to sue the employee. The employer wanted all of the extra income that the employee had made and had not turned over to the employer.

Make sure that if there are any activities that you will participate in on your own time, including other part-time employment or moonlighting, this is specifically spelled out in the contract and the party who is entitled to receive the income from it is also specified. Furthermore, in the case of government employees such as military or Veterans Administration (VA) physicians, these types of activities may be illegal without advance written permission from the government.

Tip 23 – Make Sure You Receive a Copy of the Contract Back Signed and Dated by the Other Side.
As we have written before, one of the biggest problems we see again and again is when a dispute arises, the party coming to us (usually the employee) does not have a copy of the contract that is signed or dated by the other party (usually the employer).

Can you imagine buying or selling a house without getting a contract signed by each party? Can you imagine buying a car without getting a copy of the contract signed by the other party? Then how can you enter into a contract covering years of time for something as important as a profession without obtaining a signed and dated copy from the other side? Think of employment contracts as prenuptial agreements. As long as everyone does what he or she is supposed to do and things work out okay, the contract is not needed or referred to in most cases. It is only if things start going wrong, for example, if the employee does not work the hours he is supposed to if the employer does not pay the bonuses it agreed to pay, that the contract gets pulled out for possible enforcement.

In litigation in which I have been involved over physician employment agreements, I have had the following defenses raised by employers when sued for breach of contract by an employee:

A. The employer never agreed with the changes the employee wanted in the contract, so the employer never signed it.
B. The employer and employee were involved in negotiations on a possible contract but could never reach an agreement, so the employee has no contract and is merely an “at will” employee;
C. There was never a signed contract so the employment agreement is unenforceable under the applicable statute of fraud.
D. There was never a signed contract so the employment agreement is illegal and unenforceable under the Stark Act and the Anti-Kickback Statute.

If you are the employer, never let the employee start working before you have a copy of the contract back signed and dated by the employee. If you are the employee, never start working, not even a day, before you have a copy of the contract back signed and dated by the employer.

When we review contracts we often add an addendum or amendment to the contract that states: “This agreement shall not be valid or enforceable unless Employee actually receives a copy signed and dated by the employer on or before (date) and employee shall not be expected to begin work until then.”

Adhering to these types of requirements keeps everyone honest.

Contact a Health Care Attorney Experienced in Negotiating and Evaluating Physician and Health Professional’s Business Transactions.

At the Health Law Firm, we provide legal services for all health care providers and professionals. This includes physicians, nurses, dentists, psychologists, psychiatrists, mental health counselors, durable medical equipment suppliers (DME), medical students and interns, hospitals, ambulatory surgical centers, pain management clinics, nursing homes, and any other health care provider.

The services we provide include reviewing and negotiating contracts, preparing contracts, helping employers and employees enforce contracts, advice on setting aside or voiding contracts, litigation of contracts (in start or federal court), business transactions, professional license defense, opinion letters, representation in investigations, fair hearing defense, representation in peer review and clinical privileges hearings, litigation of restrictive covenant (covenants not to compete), Medicare and Medicaid audits, commercial litigation, and administrative hearings.

To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

KeyWords: physician employment agreement, physician employment contract, health professional contracting, representation for physician contracts, physician contract attorney, employment contract lawyer, healthcare contract attorney, business law attorney, contract litigation, business litigation, contract terms, physician agreements, business transactions, restrictive covenants, noncompetition agreements, covenants not to compete, representation for restrictive covenants, representation for noncompetition agreements, The Health Law Firm reviews, representation for health care providers

“The Health Law Firm” is a registered fictitious business name of and a registered service mark of The Health Law Firm, P.A., a Florida professional service corporation, since 1999.
Copyright © 2019 The Health Law Firm. All rights reserved.

Industry Trend: Hospital Systems Merging and Acquiring Private Practices All Over the Country

By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

There’s a structural shift that is sweeping the health care system – hospitals are acquiring private physician practices. It is happening all over the U.S., including right here in Central Florida. On December 31, 2012, Orlando Health – a nonprofit, multi-hospital system that owns Orlando Regional Medical Center and eight other hospitals – will allegedly merge with Physician Associates – Central Florida’s largest medical practice, according to the Orlando Sentinel. The alleged price tag on this sale is $50 million, with each of the group’s 95 physicians receiving about $500,000 a piece.

Critics Believe the Merger will Hurt Patients.

Orlando Health maintains the goal of the merger is to move toward a new payment model and reduce health care costs, but critics interviewed in the Orlando Sentinel article disagree.

The trend around the country is that after a merger patients will see a facility fee tacked onto a doctor’s fee, even if patients go to the same doctor’s office. Critics also believe providers will feel obligated, or will be required, to only refer patients to the hospital that employs them. Another fear is job loss, as hospitals take over office management.

To read the article from the Orlando Sentinel, click here.

An Investigation into Acquisitions.

In August 2012, the Wall Street Journal took a closer look at what happens after an acquisition of a private practice by a hospital system.

The article stated as physicians are absorbed into hospital systems, they can get paid for services at the hospital systems’ rates, which are typically higher than what insurers pay to independent doctors. Some services that physicians previously performed at their facilities may start to be billed as hospital outpatient procedures, this can double or triple the cost.

Medicare pays more for certain services if they are performed at hospital facilities. According to the Wall Street Journal, if a hospital system transforms a private clinic to become an outpatient facility or moves services onto a hospital site, the hospital’s Medicare reimbursement rates will increase.

To read the entire Wall Street Journal article, click here.

Physician Associates Writes Letter to Patients.

On November 15, 2012, the Physician Associates Chairman of the Board of Directors posted a letter to patients on the practice’s website. The letter assures patients nothing about the service they receive will change. The letter says the sale is about patients receiving the best possible care in a new, fast-paced health care environment. In response to the sale price, the chairman said a large component of the purchase price reflects the sale of all of the Physician Associates’ assets to Orlando Health, along with an agreement to provide future employment.

Click here to read the entire letter.

Contact Health Law Attorneys Experienced in Business Transactions and Contracts.
At the Health Law Firm we provide legal services for all health care providers and professionals. This includes physicians, nurses, dentists, psychologists, psychiatrists, mental health counselors, Durable Medical Equipment suppliers, medical students and interns, hospitals, ambulatory surgical centers, pain management clinics, nursing homes, and any other health care provider. We represent facilities, individuals, groups and institutions in contracts, sales, mergers and acquisitions.

The services we provide include reviewing and negotiating contracts, business transactions, professional license defense, representation in investigations, credential defense, representation in peer review and clinical privileges hearings, Medicare and Medicaid audits, commercial litigation, and administrative hearings.

To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

Comments?

What do you think of the merger between Physician Associates and Orlando Health? Who do you think it will benefit more, the patients or the doctors? Please leave any thoughtful comments below.

Sources:

Jameson, Marni. “$50M sale of Physician Associates Signals Major Shift in Orlando Health Care.” Orlando Sentinel. (November 13, 2012). From: http://articles.orlandosentinel.com/2012-11-13/news/os-physician-associates-orlando-health-20121109_1_orlando-health-health-care-physicians

Wilde Matthews, Anna. “Same Doctor Visit, Double the Cost.” Wall Street Journal. (August 27, 2012). From: http://online.wsj.com/article/SB10000872396390443713704577601113671007448.html

Walker, M.D., Erik. “Letter to Our Patients Regarding Potential Orlando Health Merger.” Physician Associates. (November 15, 2012). From: http://www.paof.com/news/2012/11/letter-our-patients-regarding-potential-orlando-health-merger

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

“The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.
Copyright © 1996-2012 The Health Law Firm. All rights reserved.

 

Hospitals Allegedly Enforcing Questionable Practices to Increase Bottom Line

1 Indest-2008-1By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

Doctors and hospitals around the country seem to be butting heads. In the past month, an article in The New York Times and a segment on the television “magazine” show 60 Minutes shed light on some questionable practices being enforced by hospitals on physicians working for them.

I previously wrote a blog on this structural shift in the practice of medicine. Click here to read that blog.

The effects of this trend are examined in these two news stories. Doctors and former employees from a number of hospitals around the country were interviewed and all seem to be dealing with the same issues. The biggest concerns addressed were: pressure to order unnecessary tests, admitting patients to fill hospital quotas and drive hospital profits, and the feeling of being controlled by hospital executives and administrators instead of practicing effective medicine.

Doctors Allegedly Pressured to Fill Emergency Room Beds to Increase Profits.

On December 2, 2012, 60 Minutes aired an investigative segment on one of the largest for-profit hospital chains in the country. Former employees and physicians alleged this hospital system thrived by buying urban-area hospitals and turning them into profit centers by filing empty beds from emergency rooms. A former emergency medicine doctor stated that the hospital in which he worked required an admission rate of twenty percent (20%) for patients seen in the ER and fifty percent (50%) for patients who were 65 years old and older (most of whom are Medicare patients) seen in the ER.

A former hospital system employee interviewed by 60 Minutes claimed he was in charge of auditing the hospital chain in question. He stated that he was convinced that doctors were under an extraordinary amount of pressure to fill hospital beds. He stated that he personally audited hospitals in Texas, Florida and Oklahoma, and concluded there were hundreds of thousands of dollars submitted to Medicare and Medicaid for hospital stays that did not meet standards for reimbursement, including medical necessity.

Doctors interviewed for The New York Times article had similar stories. They stated in interviews that hospital administrators created quotas for how many patients should be admitted, because more admissions allegedly meant more money. Doctors who met or exceeded quotas were rewarded with increased compensation, while doctors who did not felt in danger of losing their jobs.

Click here to read the entire New York times article.

Consequences of Ordering Unnecessary Tests.

The New York Times article looked at a number of lawsuits filed by former employees who allege the hospitals they worked for compensated doctors for ordering more tests than necessary.

The Department of Justice (DOJ) recently settled with a hospital group in Joplin, Missouri. According to the DOJ press release, the hospital system had to pay more than $9.3 million for rewarding doctors partly based on how many tests they ordered. This is in direct violation of the Stark Law and the False Claims Act.

Click here to read the entire press release from the DOJ.

I recently wrote an article for Medical Economics on the legal ramifications of ordering unnecessary tests. To read that article, click here.

If you want to know more on the Stark Law, click here.

Doctors Feel Controlled By Hospital Executives.

Doctors also stated they felt controlled by hospital executives. This was due, in part, to a corporate wide computer software system that was customized to automatically order an extensive battery of tests, some unnecessary, as soon as a patient walked into the hospital. It’s also stated that the software would prompt a physician to reconsider when he or she decided to send an emergency room patient home.

Most doctors interviewed were upset that the program also generated reports that evaluated each doctor’s performance and productivity.

To watch the segment from 60 Minutes, click here.

Hospitals Say They are Embracing the New Model of Health Care.

The hospital system in question by 60 Minutes maintains that these allegations are not correct. The executive vice president said that as a whole admission rates haven’t changed in four years and are near or below industry averages. The hospital systems believe that by consolidating they are embracing the new model of health care and state patient care comes first.

Contact Health Law Attorneys Experienced in Representing Health Care Professionals and Providers.

At the Health Law Firm we provide legal services for all health care providers and professionals. This includes physicians, nurses, dentists, psychologists, psychiatrists, mental health counselors, Durable Medical Equipment suppliers, medical students and interns, hospitals, ambulatory surgical centers, pain management clinics, nursing homes, and any other health care provider. We represent facilities, individuals, groups and institutions in contracts, sales, mergers and acquisitions.

The services we provide include reviewing and negotiating contracts, business transactions, professional license defense, representation in investigations, credential defense, representation in peer review and clinical privileges hearings, Medicare and Medicaid audits, commercial litigation, and administrative hearings.

To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

Comments?

Do you think there are constant battles between doctors and hospitals? As a health professional, have you experienced the pressure to admit patients, order unnecessary tests or refer a patient inside your network? Please leave any thoughtful comments below.

Sources:

Creswell, Julie and Abelson, Reed. “A Hospital War Reflects a Bind of Doctors in the U.S.” The New York Times. (November 30, 2012). From: http://www.nytimes.com/2012/12/01/business/a-hospital-war-reflects-a-tightening-bind-for-doctors-nationwide.html?pagewanted=all

Kroft, Steve. “Hospitals: The Cost of Admission.” 60 Minutes. (December 2, 2012). From: http://www.cbsnews.com/video/watch/?id=50136261n

Department of Justice. “Missouri Hospital System Agrees to Pay $9.3 Million to Resolve False Claims Act and Stark Law Violations.” DOJ. (November 5, 2012). From: http://www.justice.gov/printf/PrintOut3.jsp

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida, area.  www.TheHealthLawFirm.com  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone:  (407) 331-6620.

“The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.

Copyright © 1996-2012 The Health Law Firm. All rights reserved.

20 Tips Plus a Bonus for Physicians Negotiating Their Own Employment Contracts

4 Indest-2009-3By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

At The Health Law Firm, we often receive calls from physicians and health professionals about reviewing and negotiating contracts, preparing contracts, helping employers and employees enforce contracts, voiding contracts, getting out of contracts and litigating various contract provisions. Physicians and other health professionals should understand the common language and terms found in employment contracts for professionals so they can recognize mistakes commonly when negotiating them.

Our comments here are meant to provide general tips we have learned from our experience. However, please remember, every situation is different and there are exceptions to every rule. I have added a “bonus tip” here, because of recent problems our clients have had.

“Bonus Tip;” The Prime Directive.

My primary tip, and I would say it is the most important, is to know the persons and parties with whom you are contracting and be sure the contract contains that information. Make sure you know the complete name and residence address of the principal person with whom you are dealing. Then be sure you know the complete information on any business entity with which you are dealing, including state of incorporation (or organization), shareholders (or “owners” or members), and address of its main headquarters (principal place of business). If other business entities are the shareholders, owners or members of the entity for which you will be working, you need to find out the same information for each of them. Make sure they are all authorized to do business in your state and have the appropriate licenses that your state requires.

In Florida, any medical business that is not actually 100% owned by Florida licensed physicians or health professionals must have a Health Care Clinic license issued by the Florida Agency for Health Care Administration. Dental practices and optometry practices cannot be owned by anyone who is not licensed to practice dentistry in the state of Florida. Some unscrupulous business people attempt to skirt the law by setting up phoney or “straw man” owners that are physicians or dentists. This is illegal, a felony in many cases, so be cautious. My advice would be not to sign up with a business entity that has been created solely for the purpose of contracting with you and which has no assets. This has been a real problem, lately.

20 More Tips.

The following are a few tips for any physician who is involved in negotiating his or her own employment agreement.

1. There is no such thing as a “standard physician employment agreement.”

2. Everything is negotiable.

3. Be sure the wording of the contract represents exactly the agreement you made. If it is different or not specified, the language in the contract will govern in any future dispute.

4. Be sure that every blank in the contract is completed and filled in before you sign.

5. Be sure that every Exhibit, Addendum or Schedule referred to in the contract is completed and attached before you sign.

6. Shun “legal” advice from your peers and, especially, from the accountants and representatives of your future employer. Misinformation about legal issues abounds. Just because one court may have decided a legal issue a certain way in one case in one state does not mean a different court would not reach a different decision, even in the same state or county. Every set of facts and circumstances, every contract and every case are different.

7. Obtain and review copies of every document referred to in the agreement. These are considered part of the agreement. These may include the practice’s policies and procedures, the employee handbook, a code of conduct, sexual harassment policy, compliance agreements, etc. Keep these in a file with a copy of your contract.

8. Carefully consider clauses that allow the employer to terminate the agreement without cause on a 30 day, 60 day, 90 day or 180 day notice. With such a clause in your contract, you no longer have a one year or two year agreement. Instead, you have a 30 day, 60 day, 90 day or 180 day contract. Can you find another job and relocate in 30 days or 60 days?

9. If there is a “for cause” termination provision in the contract, be sure to include a “cure” provision. This is a provision which requires the employer to provide you written notice of any deficiency or breach and allows you a certain period of time (usually anywhere from 10 to 30 days) to cure it.

10. Ensure the contract is clear throughout that you are an employee and not an independent contractor. Employees receive far more benefits and have more protections under the law than do independent contractors. If you sign on as an independent contractor, you will be assuming many expenses and liabilities that the employer would ordinarily be required to assume.

11. A promise to make you a “partner” or “shareholder” in the practice after a certain period of time will not be enforceable unless all of the terms are specified in order for a court to enforce it. (Price, timing, percentage of ownership, method of payment of the buy-in, etc.). Think of an option to purchase a house. Unless all of the terms for a binding contract are set forth in writing and agreed to by the parties, it will not be enforceable.

12. If you sign the agreement, be prepared to honor it. Do not sign an agreement thinking that there may be certain provisions that won’t be enforceable or that you won’t be required to follow in the future. Assume that every part of the contract is enforceable.

13. Restrictive covenants (sometimes referred to as covenants not to compete) are enforceable in Florida. Although there are many exceptions and defenses that can be used to defeat or prevent the enforcement of a restrictive covenant, unless you have the money set aside to finance litigation, expect to honor it if it is in the agreement. As an employee, your negotiation strategy should be to: a) have it removed completely, or b) reduce the period of time and reduce the geographic area as low as possible. Also, it should be worded so as to only apply to the office or location in which you work and to the medical subspecialty or type of practice in which you will work.

14. Avoid assuming any obligation to pay the premium for tail coverage for professional liability (medical malpractice) insurance, especially if the employer terminates the employment. If you are not able to negotiate this away completely: a) reduce the percentage you agree to pay to 50% or have it reduced 25% for each year you are in the practice, and b) insert a provision that if you maintain the same insurance company or obtain retroactive coverage, this will be substituted for tail coverage.

15. Visit the practice, hospital and area at least three (3) times before signing. One of these visits should be without the knowledge of the potential employer when you can tour the geographic area and, perhaps, the hospitals on your own.

16. Contact any physicians you know or have met in the past who live in the area or any surrounding areas. They may be able to provide you information regarding your potential employer, hospital or city that may affect your decision.

17. Do your “due diligence” before agreeing. Ask to see actual billing and collections figures and income statements. Talk to other associates. If your compensation will be based on productivity, speak with another physician who is similarly compensated about how his/her compensation is computed. Visit any hospital, nursing home or other facility where you will have privileges or see patients. Discuss the quality of the equipment and stuff with other physicians and physicians in surrounding communities.

18. Do not buy a permanent residence (house or condominium) during your first two years of employment with a new practice in a new location. Rent or rent with an option to purchase. This will give you much more flexibility if the employment situation does not work out to your expectations.

19. If you receive a signing bonus, put it in the bank in a CD or money market to use as needed in connection with tips 14 and 15 above. This may be your personal “golden parachute” if you need to leave a bad situation.

20. Do not start working until you have a copy of the employment agreement. A draft copy if not sufficient. A copy signed by you but not by the employer is not sufficient. The most common problem we see when there is a physician employment dispute is that the employee does not have a copy of the contract that is signed by the employer.

Contact a Health Care Attorney Experienced in Negotiating and Evaluating Physician and Health Professional’s Business Transactions.

At the Health Law Firm we provide legal services for all health care providers and professionals. This includes physicians, nurses, dentists, psychologists, psychiatrists, mental health counselors, durable medical equipment suppliers (DME), medical students and interns, hospitals, ambulatory surgical centers, pain management clinics, nursing homes, and any other health care provider.

The services we provide include reviewing and negotiating contracts, preparing contracts, helping employers and employees enforce contracts, advice on setting aside or voiding contracts, litigation of contracts (in start or federal court), business transactions, professional license defense, opinion letters, representation in investigations, fair hearing defense, representation in peer review and clinical privileges hearings, litigation of restrictive covenant (covenants not to compete), Medicare and Medicaid audits, commercial litigation, and administrative hearings.

To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

KeyWords: Physician employment agreement, physician employment contract, health professional contracting, negotiating business transactions, physician contracts, contracting tips, legal representation for physician contracts, legal representation for negotiating physician contracts, contracting defense attorney, physician contract attorney, legal representation for contract litigation, legal representation for business litigation, legal counsel for contract terms, legal representation for physician agreements, legal representation for business transactions, legal counsel for restrictive covenants, legal counsel for noncompetition agreements, The Health Law Firm reviews, reviews of The Health Law Firm attorneys, health law defense attorney, health law attorney

“The Health Law Firm” is a registered fictitious business name of The Health Law Firm, P.A., and Florida professional service corporation, since 1999, and is also a registered service mark. Copyright © 2017 The Health Law Firm. All rights reserved.

20 Tips Plus a Bonus for Physicians Negotiating Their Own Employment Contracts

4 Indest-2009-3By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

At The Health Law Firm, we often receive calls from physicians and health professionals about reviewing and negotiating contracts, preparing contracts, helping employers and employees enforce contracts, voiding contracts, getting out of contracts and litigating various contract provisions. Physicians and other health professionals should understand the common language and terms found in employment contracts for professionals so they can recognize mistakes commonly when negotiating them.

Our comments here are meant to provide general tips we have learned from our experience. However, please remember, every situation is different and there are exceptions to every rule. I have added a “bonus tip” here, because of recent problems our clients have had.

“Bonus Tip;” The Prime Directive.

My primary tip, and I would say it is the most important, is to know the persons and parties with whom you are contracting and be sure the contract contains that information. Make sure you know the complete name and residence address of the principal person with whom you are dealing. Then be sure you know the complete information on any business entity with which you are dealing, including state of incorporation (or organization), shareholders (or “owners” or members), and address of its main headquarters (principal place of business). If other business entities are the shareholders, owners or members of the entity for which you will be working, you need to find out the same information for each of them. Make sure they are all authorized to do business in your state and have the appropriate licenses that your state requires.

In Florida, any medical business that is not actually 100% owned by Florida licensed physicians or health professionals must have a Health Care Clinic license issued by the Florida Agency for Health Care Administration. Dental practices and optometry practices cannot be owned by anyone who is not licensed to practice dentistry in the state of Florida. Some unscrupulous business people attempt to skirt the law by setting up phoney or “straw man” owners that are physicians or dentists. This is illegal, a felony in many cases, so be cautious. My advice would be not to sign up with a business entity that has been created solely for the purpose of contracting with you and which has no assets. This has been a real problem, lately.

20 More Tips.

The following are a few tips for any physician who is involved in negotiating his or her own employment agreement.

1. There is no such thing as a “standard physician employment agreement.”

2. Everything is negotiable.

3. Be sure the wording of the contract represents exactly the agreement you made. If it is different or not specified, the language in the contract will govern in any future dispute.

4. Be sure that every blank in the contract is completed and filled in before you sign.

5. Be sure that every Exhibit, Addendum or Schedule referred to in the contract is completed and attached before you sign.

6. Shun “legal” advice from your peers and, especially, from the accountants and representatives of your future employer. Misinformation about legal issues abounds. Just because one court may have decided a legal issue a certain way in one case in one state does not mean a different court would not reach a different decision, even in the same state or county. Every set of facts and circumstances, every contract and every case are different.

7. Obtain and review copies of every document referred to in the agreement. These are considered part of the agreement. These may include the practice’s policies and procedures, the employee handbook, a code of conduct, sexual harassment policy, compliance agreements, etc. Keep these in a file with a copy of your contract.

8. Carefully consider clauses that allow the employer to terminate the agreement without cause on a 30 day, 60 day, 90 day or 180 day notice. With such a clause in your contract, you no longer have a one year or two year agreement. Instead, you have a 30 day, 60 day, 90 day or 180 day contract. Can you find another job and relocate in 30 days or 60 days?

9. If there is a “for cause” termination provision in the contract, be sure to include a “cure” provision. This is a provision which requires the employer to provide you written notice of any deficiency or breach and allows you a certain period of time (usually anywhere from 10 to 30 days) to cure it.

10. Ensure the contract is clear throughout that you are an employee and not an independent contractor. Employees receive far more benefits and have more protections under the law than do independent contractors. If you sign on as an independent contractor, you will be assuming many expenses and liabilities that the employer would ordinarily be required to assume.

11. A promise to make you a “partner” or “shareholder” in the practice after a certain period of time will not be enforceable unless all of the terms are specified in order for a court to enforce it. (Price, timing, percentage of ownership, method of payment of the buy-in, etc.). Think of an option to purchase a house. Unless all of the terms for a binding contract are set forth in writing and agreed to by the parties, it will not be enforceable.

12. If you sign the agreement, be prepared to honor it. Do not sign an agreement thinking that there may be certain provisions that won’t be enforceable or that you won’t be required to follow in the future. Assume that every part of the contract is enforceable.

13. Restrictive covenants (sometimes referred to as covenants not to compete) are enforceable in Florida. Although there are many exceptions and defenses that can be used to defeat or prevent the enforcement of a restrictive covenant, unless you have the money set aside to finance litigation, expect to honor it if it is in the agreement. As an employee, your negotiation strategy should be to: a) have it removed completely, or b) reduce the period of time and reduce the geographic area as low as possible. Also, it should be worded so as to only apply to the office or location in which you work and to the medical subspecialty or type of practice in which you will work.

14. Avoid assuming any obligation to pay the premium for tail coverage for professional liability (medical malpractice) insurance, especially if the employer terminates the employment. If you are not able to negotiate this away completely: a) reduce the percentage you agree to pay to 50% or have it reduced 25% for each year you are in the practice, and b) insert a provision that if you maintain the same insurance company or obtain retroactive coverage, this will be substituted for tail coverage.

15. Visit the practice, hospital and area at least three (3) times before signing. One of these visits should be without the knowledge of the potential employer when you can tour the geographic area and, perhaps, the hospitals on your own.

16. Contact any physicians you know or have met in the past who live in the area or any surrounding areas. They may be able to provide you information regarding your potential employer, hospital or city that may affect your decision.

17. Do your “due diligence” before agreeing. Ask to see actual billing and collections figures and income statements. Talk to other associates. If your compensation will be based on productivity, speak with another physician who is similarly compensated about how his/her compensation is computed. Visit any hospital, nursing home or other facility where you will have privileges or see patients. Discuss the quality of the equipment and stuff with other physicians and physicians in surrounding communities.

18. Do not buy a permanent residence (house or condominium) during your first two years of employment with a new practice in a new location. Rent or rent with an option to purchase. This will give you much more flexibility if the employment situation does not work out to your expectations.

19. If you receive a signing bonus, put it in the bank in a CD or money market to use as needed in connection with tips 14 and 15 above. This may be your personal “golden parachute” if you need to leave a bad situation.

20. Do not start working until you have a copy of the employment agreement. A draft copy if not sufficient. A copy signed by you but not by the employer is not sufficient. The most common problem we see when there is a physician employment dispute is that the employee does not have a copy of the contract that is signed by the employer.

Contact a Health Care Attorney Experienced in Negotiating and Evaluating Physician and Health Professional’s Business Transactions.

At the Health Law Firm we provide legal services for all health care providers and professionals. This includes physicians, nurses, dentists, psychologists, psychiatrists, mental health counselors, durable medical equipment suppliers (DME), medical students and interns, hospitals, ambulatory surgical centers, pain management clinics, nursing homes, and any other health care provider.

The services we provide include reviewing and negotiating contracts, preparing contracts, helping employers and employees enforce contracts, advice on setting aside or voiding contracts, litigation of contracts (in start or federal court), business transactions, professional license defense, opinion letters, representation in investigations, fair hearing defense, representation in peer review and clinical privileges hearings, litigation of restrictive covenant (covenants not to compete), Medicare and Medicaid audits, commercial litigation, and administrative hearings.

To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

KeyWords: Physician employment agreement, physician employment contract, health professional contracting, negotiating business transactions, physician contracts, contracting tips, legal representation for physician contracts, legal representation for negotiating physician contracts, contracting defense attorney, physician contract attorney, legal representation for contract litigation, legal representation for business litigation, legal counsel for contract terms, legal representation for physician agreements, legal representation for business transactions, legal counsel for restrictive covenants, legal counsel for noncompetition agreements, The Health Law Firm reviews, reviews of The Health Law Firm attorneys, health law defense attorney, health law attorney

“The Health Law Firm” is a registered fictitious business name of The Health Law Firm, P.A., and Florida professional service corporation, since 1999, and is also a registered service mark. Copyright © 2017 The Health Law Firm. All rights reserved.

20 Tips Plus a Bonus for Physicians Negotiating Their Own Employment Contracts

4 Indest-2009-3By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

At The Health Law Firm, we often receive calls from physicians and health professionals about reviewing and negotiating contracts, preparing contracts, helping employers and employees enforce contracts, voiding contracts, getting out of contracts and litigating various contract provisions. Physicians and other health professionals should understand the common language and terms found in employment contracts for professionals so they can recognize mistakes commonly when negotiating them.

Our comments here are meant to provide general tips we have learned from our experience. However, please remember, every situation is different and there are exceptions to every rule. I have added a “bonus tip” here, because of recent problems our clients have had.

“Bonus Tip;” The Prime Directive.

My primary tip, and I would say it is the most important, is to know the persons and parties with whom you are contracting and be sure the contract contains that information. Make sure you know the complete name and residence address of the principal person with whom you are dealing. Then be sure you know the complete information on any business entity with which you are dealing, including state of incorporation (or organization), shareholders (or “owners” or members), and address of its main headquarters (principal place of business). If other business entities are the shareholders, owners or members of the entity for which you will be working, you need to find out the same information for each of them. Make sure they are all authorized to do business in your state and have the appropriate licenses that your state requires.

In Florida, any medical business that is not actually 100% owned by Florida licensed physicians or health professionals must have a Health Care Clinic license issued by the Florida Agency for Health Care Administration. Dental practices and optometry practices cannot be owned by anyone who is not licensed to practice dentistry in the state of Florida. Some unscrupulous business people attempt to skirt the law by setting up phoney or “straw man” owners that are physicians or dentists. This is illegal, a felony in many cases, so be cautious. My advice would be not to sign up with a business entity that has been created solely for the purpose of contracting with you and which has no assets. This has been a real problem, lately.

20 More Tips.

The following are a few tips for any physician who is involved in negotiating his or her own employment agreement.

1. There is no such thing as a “standard physician employment agreement.”

2. Everything is negotiable.

3. Be sure the wording of the contract represents exactly the agreement you made. If it is different or not specified, the language in the contract will govern in any future dispute.

4. Be sure that every blank in the contract is completed and filled in before you sign.

5. Be sure that every Exhibit, Addendum or Schedule referred to in the contract is completed and attached before you sign.

6. Shun “legal” advice from your peers and, especially, from the accountants and representatives of your future employer. Misinformation about legal issues abounds. Just because one court may have decided a legal issue a certain way in one case in one state does not mean a different court would not reach a different decision, even in the same state or county. Every set of facts and circumstances, every contract and every case are different.

7. Obtain and review copies of every document referred to in the agreement. These are considered part of the agreement. These may include the practice’s policies and procedures, the employee handbook, a code of conduct, sexual harassment policy, compliance agreements, etc. Keep these in a file with a copy of your contract.

8. Carefully consider clauses that allow the employer to terminate the agreement without cause on a 30 day, 60 day, 90 day or 180 day notice. With such a clause in your contract, you no longer have a one year or two year agreement. Instead, you have a 30 day, 60 day, 90 day or 180 day contract. Can you find another job and relocate in 30 days or 60 days?

9. If there is a “for cause” termination provision in the contract, be sure to include a “cure” provision. This is a provision which requires the employer to provide you written notice of any deficiency or breach and allows you a certain period of time (usually anywhere from 10 to 30 days) to cure it.

10. Ensure the contract is clear throughout that you are an employee and not an independent contractor. Employees receive far more benefits and have more protections under the law than do independent contractors. If you sign on as an independent contractor, you will be assuming many expenses and liabilities that the employer would ordinarily be required to assume.

11. A promise to make you a “partner” or “shareholder” in the practice after a certain period of time will not be enforceable unless all of the terms are specified in order for a court to enforce it. (Price, timing, percentage of ownership, method of payment of the buy-in, etc.). Think of an option to purchase a house. Unless all of the terms for a binding contract are set forth in writing and agreed to by the parties, it will not be enforceable.

12. If you sign the agreement, be prepared to honor it. Do not sign an agreement thinking that there may be certain provisions that won’t be enforceable or that you won’t be required to follow in the future. Assume that every part of the contract is enforceable.

13. Restrictive covenants (sometimes referred to as covenants not to compete) are enforceable in Florida. Although there are many exceptions and defenses that can be used to defeat or prevent the enforcement of a restrictive covenant, unless you have the money set aside to finance litigation, expect to honor it if it is in the agreement. As an employee, your negotiation strategy should be to: a) have it removed completely, or b) reduce the period of time and reduce the geographic area as low as possible. Also, it should be worded so as to only apply to the office or location in which you work and to the medical subspecialty or type of practice in which you will work.

14. Avoid assuming any obligation to pay the premium for tail coverage for professional liability (medical malpractice) insurance, especially if the employer terminates the employment. If you are not able to negotiate this away completely: a) reduce the percentage you agree to pay to 50% or have it reduced 25% for each year you are in the practice, and b) insert a provision that if you maintain the same insurance company or obtain retroactive coverage, this will be substituted for tail coverage.

15. Visit the practice, hospital and area at least three (3) times before signing. One of these visits should be without the knowledge of the potential employer when you can tour the geographic area and, perhaps, the hospitals on your own.

16. Contact any physicians you know or have met in the past who live in the area or any surrounding areas. They may be able to provide you information regarding your potential employer, hospital or city that may affect your decision.

17. Do your “due diligence” before agreeing. Ask to see actual billing and collections figures and income statements. Talk to other associates. If your compensation will be based on productivity, speak with another physician who is similarly compensated about how his/her compensation is computed. Visit any hospital, nursing home or other facility where you will have privileges or see patients. Discuss the quality of the equipment and stuff with other physicians and physicians in surrounding communities.

18. Do not buy a permanent residence (house or condominium) during your first two years of employment with a new practice in a new location. Rent or rent with an option to purchase. This will give you much more flexibility if the employment situation does not work out to your expectations.

19. If you receive a signing bonus, put it in the bank in a CD or money market to use as needed in connection with tips 14 and 15 above. This may be your personal “golden parachute” if you need to leave a bad situation.

20. Do not start working until you have a copy of the employment agreement. A draft copy if not sufficient. A copy signed by you but not by the employer is not sufficient. The most common problem we see when there is a physician employment dispute is that the employee does not have a copy of the contract that is signed by the employer.

Contact a Health Care Attorney Experienced in Negotiating and Evaluating Physician and Health Professional’s Business Transactions.

At the Health Law Firm we provide legal services for all health care providers and professionals. This includes physicians, nurses, dentists, psychologists, psychiatrists, mental health counselors, durable medical equipment suppliers (DME), medical students and interns, hospitals, ambulatory surgical centers, pain management clinics, nursing homes, and any other health care provider.

The services we provide include reviewing and negotiating contracts, preparing contracts, helping employers and employees enforce contracts, advice on setting aside or voiding contracts, litigation of contracts (in start or federal court), business transactions, professional license defense, opinion letters, representation in investigations, fair hearing defense, representation in peer review and clinical privileges hearings, litigation of restrictive covenant (covenants not to compete), Medicare and Medicaid audits, commercial litigation, and administrative hearings.

To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

KeyWords: Physician employment agreement, physician employment contract, health professional contracting, negotiating business transactions, physician contracts, contracting tips, legal representation for physician contracts, legal representation for negotiating physician contracts, contracting defense attorney, physician contract attorney, legal representation for contract litigation, legal representation for business litigation, legal counsel for contract terms, legal representation for physician agreements, legal representation for business transactions, legal counsel for restrictive covenants, legal counsel for noncompetition agreements, The Health Law Firm reviews, reviews of The Health Law Firm attorneys, health law defense attorney, health law attorney

“The Health Law Firm” is a registered fictitious business name of The Health Law Firm, P.A., and Florida professional service corporation, since 1999, and is also a registered service mark. Copyright © 2017 The Health Law Firm. All rights reserved.