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I have seen quite a few physician contracts over the last 6 months for FT jobs and for locums. To be clear, I haven't practiced law in 6 years, this is outside of my scope of expertise, and there are some medico/legal things that truly are just out-of-my depth. (e.g. what an adequate RVU is for specific services). Quite frankly, at least three other attorneys on this site have practiced in areas that better sync up with issue AND they have better credentialing than me. Nonetheless, in the interest of physician families helping other physician families out, I'd like for us to create a thread about physician employment contract issues.
It might be useful to list some of the potential considerations when reviewing a contract for employment. Please add your own examples. NONE OF THIS IS MEANT TO BE CONSTRUED AS LEGAL ADVICE!! Also, try as you might, you can not contract away all risk. It is impossible to draft agreements for every possible outcome. With that being said, let's create a list of potential employment contract pitfalls.
--Malpractice and Tail insurance. The need for occurrence tail insurance coverage can not be understated. Several members on this board have had to pay out tens of thousands of dollars personally in order to change jobs.
--Mutual indemnity clauses. I saw this in a potential locums contract last night. For an explanation why this should be a nonstarter, read http://www.medscape.com/viewarticle/770873
--Geographic Noncompetes. They are illegal in some states (CA and COcome to mind). To compensate for the hospital's "loss", I saw a contract which sought liquidated damages of $550k if the physician attempted to work within an hour radius of the contracting hospital. Good luck trying to find a practice to buy that out! On the other hand, a KS court recently upheld a fairly restrictive geographic noncompete covenant even though multiple courts elsewhere deemed them to be contrary to public policy and patient well being. Many states are middle ground. Think about whether you would like to personally pay for counsel to determine what your state's take on the issue of the enforceability of geographic noncompete restrictions.
--Getting paid by collections rather than RVUS. Truly, this is like gambling. Further, it creates animosity in a practice when the more tenured physicians claim the clinics in the more affluent suburbs while younger staff gets to man the clinics with low reimbursement rates.
--Having a carefully crafted "escape" plan in case the physician leaves before the contract expires. What obligations are due to whom?
Believe me, the hospital has a team of attorneys crafting these things. This is one instance where it really is in your best interest to retain counsel.
Keep the examples coming!
It might be useful to list some of the potential considerations when reviewing a contract for employment. Please add your own examples. NONE OF THIS IS MEANT TO BE CONSTRUED AS LEGAL ADVICE!! Also, try as you might, you can not contract away all risk. It is impossible to draft agreements for every possible outcome. With that being said, let's create a list of potential employment contract pitfalls.
--Malpractice and Tail insurance. The need for occurrence tail insurance coverage can not be understated. Several members on this board have had to pay out tens of thousands of dollars personally in order to change jobs.
--Mutual indemnity clauses. I saw this in a potential locums contract last night. For an explanation why this should be a nonstarter, read http://www.medscape.com/viewarticle/770873
--Geographic Noncompetes. They are illegal in some states (CA and COcome to mind). To compensate for the hospital's "loss", I saw a contract which sought liquidated damages of $550k if the physician attempted to work within an hour radius of the contracting hospital. Good luck trying to find a practice to buy that out! On the other hand, a KS court recently upheld a fairly restrictive geographic noncompete covenant even though multiple courts elsewhere deemed them to be contrary to public policy and patient well being. Many states are middle ground. Think about whether you would like to personally pay for counsel to determine what your state's take on the issue of the enforceability of geographic noncompete restrictions.
--Getting paid by collections rather than RVUS. Truly, this is like gambling. Further, it creates animosity in a practice when the more tenured physicians claim the clinics in the more affluent suburbs while younger staff gets to man the clinics with low reimbursement rates.
--Having a carefully crafted "escape" plan in case the physician leaves before the contract expires. What obligations are due to whom?
Believe me, the hospital has a team of attorneys crafting these things. This is one instance where it really is in your best interest to retain counsel.
Keep the examples coming!
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