1 © 2000 american college of radiology physicians employment contracts how to survive your first...

1 © 2000 American College of Radiology

Physicians’ Employment ContractsHow to Survive Your First Contract

Thomas R. HoffmanAssociate General Counsel

American College of RadiologyWednesday, August 3, 2006

Written and compiled by Leonard L. Lucey, J.D.ACR Quality and Safety Department

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doctor

• (doc’ter), n. any of a number of medical professionals who use a variety of therapies to make sick people well enough to sue

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Types of Contracts

• Individual Physician - Group (primary contract)

• Group - Hospital

• Managed Care Contracts

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Terms of the Contract

• Generally one year with automatic renewal• One year provision allows either party to

terminate– if the relationship doesn’t fit– if business expectations change– tax requirements

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Terms of the Contract

• Automatic renewal = continued relationship

• Renegotiation - compensation

(automatic increase)

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Partnership/Shareholder Status

• Specify number of years• Special criteria

– buy-in– terms

• Effect of changing business conditions• Failure to meet expectations -- notice

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Compensation

• Specify amount and basis• Call: included or extra• Hours of employment, i.e., full-time• Automatic increases• Relocation expenses

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Compensation

• Outside compensation– speaking at seminars– honoraria– reserve duty pay– patents or inventions

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Contributions to Hospital

• Donation to Dean’s fund• Administrative/equipment/space rental fees• Percentage of income

– potential anti-kickback concerns• Check for provision in contract between group

and hospital; consult with dep’t chair

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Responsibilities

• Maintenance of professional licensure• Availability for call - rotation• Record keeping - paperwork• Serving on hospital committees• Membership in professional organizations

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Responsibilities

• Compliance with department and hospital written policies

• Work assignment schedule -- more than one location?

• Meeting performance expectations• Training/CME

– accreditation requirements

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Benefits

• Vacation, personal days, sick days• Retirement plan

– vesting– contribution - percentage

• Dues - licensure and professional organization membership

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Employer Control Issues

• CME and attendance at seminars

• Right to assign work schedule

• Additional training

• Right to amend personnel policies or benefits

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Non-Compete - Restrictive Covenant Clauses

• General purpose -- protect employer

• Requires consideration or value to employee

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Non-Compete - Restrictive Covenant Clauses

• Must be reasonable– cover specific geographic area– specific time period → 3 to 5 years

• Restrictive covenants prohibit employee from providing services to named hospitals, HMOs, MCOs or within specific area

• Not valid in all states

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Medical Research - Publications

• Right to any compensation• Ownership rights to patents, copyrights• Royalties• If done through employer, work for hire• Access to patient records

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Termination Provisions

• Just cause - define– loss of licensure or staff privileges,

competency• Employment at will - no cause needed• Changing business environment• Effect on privileges: check for “clean sweep”

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Termination Provisions

• Any notice requirement

• Severance package

• Relocation expenses

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Termination Provisions

• Tail coverage

• Death benefits

• Liquidated damages

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Review All Documents

• Contract may refer to other documents -- part of the contract by reference

• Managed care contracts may affect your compensation

• Group contract with hospital

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Points to Remember

• Contract is legally binding - don’t sign unless sure

• Verbal contracts may be legally binding but difficult to prove

• Ask questions• You can negotiate -- modify provisions• Strongly recommend legal review

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Helpful Hints

• Know the environment - visit the group– talk to others in the hospital– what is the group’s reputation?– stability of the group -- internal disputes?

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Helpful Hints

• Know the environment (cont’d)– any merger or takeover rumors?– are you replacing someone -- how often is

there turnover?– how much of the group’s practice is managed

care contracts, capitated?• Don’t sign contracts with multiple groups --

subject to damages

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Helpful Hints

• Hold off making major purchases until you’re certain the arrangement works– buying a home– investing in property– buying a car

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Helpful Hints

• What is appropriate compensation?– AMA/MGMA surveys– check with other residents

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