Physician contracting can be an arduous process. Most physicians do not possess the expertise to understand much of what goes into an employment contract and how it could affect them positively or negatively. While physicians should retain legal counsel with specific expertise in this area, the following is a list of some of the major physician contracting issues and what to be aware of.
Onerous Non-Compete Clauses
- The two main restrictions in overly-restrictive non-compete clauses are distance and time.
- Be sure to demand reasonable boundaries and periods of time.
- Distance restrictions should be from a single location, where you spend most of your time, and not from the farthest facility in the employer’s system.
Other Restrictive Covenant Clauses
- Be aware of any other language that restricts your activities during and after employment.
- Non-Solicit clauses are standard pertaining to soliciting patients and staff; patients have the right to go to whichever physician they choose, but you cannot reach out to them specifically.
- Negotiate language where restrictive covenants do not apply if the employer fails to pay you or breaches another part of the agreement.
Call Coverage
- Duties, hours, and responsibilities should be clearly spelled out.
- If the coverage is not specified, it should at least state that duties will be equally divided among physicians.
- You may be fine with more coverage duties if you receive greater compensation, but ensure this is in the agreement.
Bonuses and Productivity-Based Compensation
- Fully understand the exact language and expectations.
- Avoid language that states bonuses and incentives are only paid through the end of an employment period or at the end of the year; you could miss out on significant money.
- Negotiate language that states bonuses and other incentives will be prorated.
- The same is true for accounts receivable payments; demand payments for services continued past termination, with accurate reporting, and expectations of what payments are due at 60, 90, 120 days, etc.
- Understand exactly what minimum performance standards are and if they are reasonable and achievable; speak with currently employed physicians to get the truth and find out how much personal effort is needed to track the performance metrics.
Vague or Employer-Favored Language
- Beware of language that states things will be determined at the employer’s “discretion;” have these points specifically spelled out in the agreement.
- Be sure the terms are fair and reasonable to you as well as the employer.
Unreasonable Benefit Start Dates
- Be clear exactly when benefits start and be prepared to potentially pay COBRA or other fees out of pocket.
Malpractice Insurance Coverage
- Be aware of what employer-paid malpractice covers and negotiate to ensure that you will not be responsible for any potential damages above and beyond what is covered.
- Be sure you have proper tail coverage paid by the employer.
- Negotiate language that the employer pays for tail coverage if you are fired without cause, or in the event of your death or disability.
Standard Agreements
- If you try to negotiate terms, you will most often get the response: “Sorry, this is our standard agreement.” However, this often means the recruiter has no authority to change terms.
- Always ask to negotiate (or have the recruiter ask) the person who can alter the standard agreement; most of the time there is wiggle room.
Start Dates
- Be aware that start dates can get pushed back depending on delays, such as getting credentialed, getting all your required documents to the employer, and unforeseen circumstances.
- Be sure the agreement does not include termination for failure to get credentialed; at most, it should allow for denial of credentialling, not failure for other reasons.
Termination Issues
- Termination should never be one sided; have at least equal right to terminate for the same reasons as the employer.
- Beware of allowing the employer to terminate without cause; this gives the employer too much arbitrary power and leaves you far too vulnerable.
- Push back provisions that force resignation of hospital privileges upon termination when not necessary.
Before you consult an attorney, always read your contract to see what it says. What the parties to a contract have mutually agreed to will almost always be the primary factor, not specific state law. State law only supersedes a written agreement when some term or provision of a contract violates a specific law, or when some terms are written so vaguely that a court needs to determine what they mean. But if the parties have competent lawyers, the agreement should not have been written in violation of the law or with such ambiguity.