What Should I Look for in a Physician Contract
What Should I Look for in a Physician Contract

What Should I Look for in a Physician Contract?

There are a number of key elements to look for in a physician contract. A physician contract covers a large variety of areas, many of which reflect compensation. But there are other concepts a contract needs to cover. Needless to say, the contract needs to specify what the employer wishes, but it also needs to reflect your rights and your interests.

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Vital Elements in a Physician Contract

We can’t cover every single element in a physician contract here, but we do want to cover the most important points if possible. Here are some vital elements that you should look for in a physician contract.

  • Guarantee of Income – an income guarantee is something that ensures a physician will earn a certain amount each month after expenses. The period that this is done usually extends for one or two years. If a physician makes less than the guaranteed income from the hospital, the hospital will make up the difference. If the physician makes more, he keeps it at the end of the guarantee period. If at the end of the period, he makes less, he would owe the hospital the difference. However, many of the income guarantees come with a forgiveness clause. Details should be reviewed in any contract.
  • Benefits – benefits should be written out clearly in any contract. They usually include malpractice and health insurance. There can be other benefits offered when the salary is less than competitive.
  • Hours Worked – the employer’s requirement may be quite different than the physician’s idea of how many hours he wants to work or is expected to work. This has to be looked over in any contract, and negotiated as needed.
  • Vacation Time – this should be specified in any physician’s contract and is often a negotiated point.
  • Forgiveness of Educational Loans – at times the contract may specify that the employer will pay the medical education loans of the physician. This is an important point to look at in the contract.
  • Partnership – especially for high in-demand specialties, a contract should contain a point about the path to partnership. This needs to be reviewed to ensure it is clearly spelled out.
  • Termination – the contract should contain a clause about termination – the two types of provision being covered (with cause, without cause).

Agreeing to Unfair Termination Rules

Agreeing to Unfair Termination Rules is necessary to avoid when signing an employment contract, it is very important that you understand the laws of termination so you do not agree to things that can harm you later. If you end up being terminated from a job unfairly, it can be quite a fight to get justice.  Thus, Agreeing to Unfair Termination Rules in a contract are vital to avoiding conflict in the future.

What is Wrongful Termination?

Wrongful termination laws are something that refers to getting fired from a job for an illegal reason. It could be an employer who fires the employee because that person was complaining about safety concerns or discrimination, or it could be an employer who fires an employee because the employee was exercising a legal right. If an employer is discriminating against an employee and firing him or her because of disability, race, color, religion or the like, this is wrongful termination.

Wrongful Termination Law for Medical Providers

If someone is wrongfully terminated, they can file a lawsuit. Wrongful termination laws allow for damages in some cases. But first they would need to win the suit. If there is a contract which delineates the law about unfair dismissal, this can only help the case.

Breach of Contract Law and Pandemic (Covid) Considerations

It depends on the contact as to whether damages would be available. The contract can also outline the specific time in which a person can pursue damages in a case. Again, having a contract that outlines all the laws of wrongful dismissal will benefit you if you ever run into this situation with a job. You want a contract to be specific so that you are well-protected against anything occurring that ends in your dismissal.

Do doctors sign contracts? This question can be answered right away with an unequivocal yes. After their residency, a doctor will very likely go to join a practice group. In this case he will be asked to sign a contract.

Employment Agreement Checklist

Every physician contract is unique.  However, nearly all contracts for health care providers should contain several essential terms.  If these essential terms in the contract are not spelled out in contracts, disputes can arise when there is a disagreement between the parties as to the details of the specific term.  For instance, if the doctor is expecting to work  Monday through Thursday and the employer is expecting the provider to work Monday through Friday, but the specific workdays are absent from the Agreement; who prevails?

Spelling out the details of your job is crucial to avoid contract conflicts during the term of your employment.  Below is a checklist of essential terms that contracts should contain (and a brief explanation of each term):

  1. Practice Services Offered: What are the clinical patient care duties? Are you given time for review of administrative tasks? How many patients are you expected to see (like in pediatrics)?
  2. Patient Care Schedule: What days and hours per week are you expected to provide patient care?  What is the surgery schedule? Are you involved in the planning of your schedule?
  3. Locations: Which facilities will you be scheduled to provide care at (outpatient clinic, surgical sites, in-patient services, etc.)?
  4. Outside Activities: Are you permitted to pursue moonlighting or locum tenens opportunities? Do you need permission from the employer before you accept those practice of medicine related positions?
  5. Disability Insurance: Is disability insurance provided (short-term and long-term)?
  6. Medical License:  Will the practice offer reimbursement for your license? Will an advisor be provided?
  7. Practice Call Schedule: How often are you on call (after hours office call, hospital call (if applicable))?
  8. Electronic Medical Records (EMR): What EMR system is used in the practice of medicine? Will you receive training or time to review the system prior to providing care?
  9. Base Compensation: What is the annual base salary? What is the pay period frequency?  Does the base compensation increase over the term of the Agreement? Is there an annual review or quarterly review of compensation?
  10. Productivity Compensation: If there is productivity compensation; how is it calculated (wRVU, net collections, patient encounters, etc.)? Is there an annual review?
  11. Practice Benefits Summary: Are standard benefits offered: health, vision, dental, life, retirement, etc.?  Who is the advisor of human resource benefits?
  12. Paid Time Off: How much time off does the job offer? What is the split between vacation, sick days, CME attendance and holidays?  Is there a HR guide?
  13. Continuing Medical Education (CME): What is the annual allowance for CME expenses and how much time off is offered?
  14. Dues and Fees: Which business financial expenses are covered (board licensing, DEA registration, privileging, AMA membership, Board review)?
  15. Relocation Assistance: Is relocation assistance offered? What are the repayment obligations if the Agreement is terminated prior to the expiration of the initial term?
  16. Signing Bonus: Is an employee signing bonus offered? When is it paid?  Do you have to pay it back if you leave before the initial term is completed? Are student loans paid back?  Is there a forgiveness period for student loans?
  17. Professional Liability Insurance: What type of liability insurance (malpractice) is offered: claims made, occurrence, self-insurance?
  18. Tail Insurance: If tail insurance is necessary, who is responsible to pay for it when the Agreement is terminated?
  19. Term: What is the length of the initial term? Does the Agreement automatically renew after the initial term?
  20. For Cause Termination: What are the grounds for immediate termination for cause?  Is a review provided to dispute the termination?
  21. Without Cause Termination: How much notice is required for either party to terminate the Agreement without case?
  22. Practice Post Termination Payment Obligations: Will you receive production bonuses after the Agreement is terminated?
  23. Non-Compete: How long does the non-compete last and what is the prohibited geographic scope?
  24. Financial Retirement:  Is a financial retirement plan offered?
  25. Non-Solicitation: How long does it last and does it cover employees, patients, and business associates?
  26. Notice: How is notice given? Via hand delivery, email, US mail, etc.?  Does it have to be provided to the employer’s attorney?
  27. Practice Assignment: Can the Agreement be assigned by the employer?
  28. Alternative Dispute Resolution: If there is a conflict regarding the contract, will mediation or arbitration process be utilized?  What is the standard attorney review process for conflict?  Who decides which attorney oversees the process?

Physicians and Signing Employment Contracts

Do doctors sign contracts? Physicians go to school to prepare them to work with patients and to work in medical settings. Many physicians are not adept or comfortable in working with contracts and with negotiating contracts. However, it is something that must be confronted head-on as it can make a huge difference in your future. Before signing the contract, you should use that time to negotiate what is needed to make sure the contract covers all points effectively. Some things won’t be negotiable but that doesn’t prevent you from asking.

How Should Contracts be Negotiated?

Contract negotiations are like any negotiation. It is both conversation and numbers. You are establishing a relationship with an employer and he or she is establishing a relationship with you. You both are determining how you will fit in with the company, the operations and the business strategy. You are searching out a good fit, and making sure everything is covered in the contract with the proper terminology.

Some Tips for Contract Negotiation

  • When negotiating a contact, before you sign, you should read over it and take your time to understand everything. Clarify anything that isn’t clear to you.
  • Ensure you get anything in writing that was promised prior to receiving the contract.
  • Ask about money and long term plans. This is important for your future.
  • Know what kind of patients the practice sees and what sort of payment contracts they have.
  • Study and find out the total compensation package, not just the salary.

Will You Get Help With  a Contract Review?

Hiring a contract attorney is a very wise decision as you want to be sure everything is in order before you sign. A contract attorney will know and understand the rules of the region where you practice and will see that everything in the contract is worded and formatted correctly so you are protected in the future.

Physician Contract Lawyer

Since a physician contract is such an important document, it is vital that it is reviewed by competent eyes. A contract attorney has the expertise and experience to do a thorough review.