Discussion of physician employment contracts targeted at resident physicians looking for a first job after completing residency training.

1. Physician
Employment
Contracts
Robert Robinson, MD, MS, FACP
Assistant Professor of Clinical Medicine
SIU School of Medicine

2.  The presenter has no disclosures and no conflict of
interest relevant to the content of this presentation
 The presenter is not a lawyer
 This presentation does not represent legal advice
Disclosures and Disclaimer

3.  Little published data
 Considerable variability
 Confounded by nondisclosure clauses
Physician Employment Contracts

4.  Patient Protection and Affordable Care Act
 "The economic forces put in motion by the [Affordable Care]
Act are likely to lead to vertical organization of providers and
accelerate physician employment by hospitals and
aggregation into larger physician groups.“
 Ann Intern Med. 2010;153(8):536-539.
 75% of all physicians predicted to be employed by hospitals
in 2014
 Merritt Hawkins 2012 Review of Physician Recruiting Incentives
 http://www.merritthawkins.com/uploadedFiles/MerrittHawkins/Pdf/mha2012survpreview.pdf
Healthcare industry trends

5. The results…
2013 Medscape Physician Compensation Report
http://www.medscape.com/features/slideshow/compensation/2013/public

6.  Parties involved
 Duration
 Duties
 Compensation
 Transferability
 Termination
Basic Contract Components

7.  Parties involved
 Duration
 Duties
 Compensation
 Transferability
 Termination
Basic Contract Components
Read and understand before signing
No “Standard Contract”
Every item is negotiable, but organization
may not be willing to negotiate
Professional help may be needed with
complex contracts.

8.  Parties involved
 Duration
 Duties
 Compensation
 Transferability
 Termination
Basic Contract Components
Who are you actually
working for?

9.  Parties involved
 Duration
 Duties
 Compensation
 Transferability
 Termination
Basic Contract Components
Typically 2-3 Years
Is contract renewable?

10.  Parties involved
 Duration
 Duties
 Compensation
 Transferability
 Termination
Basic Contract Components
Defines your job responsibilities
Caution with vague language

11.  Parties involved
 Duration
 Duties
 Compensation
 Transferability
 Termination
Basic Contract Components
www.MGMA.org
$365 for members

12.  Medscape Physician Compensation Report
 http://www.medscape.com/features/slideshow/compensation/2013/public
 Free
 Merrit Hawkins Salary and Compensation Survey
 http://www.merritthawkins.com/compensation-surveys.aspx
 Call for price
 Modern Healthcare Compensation Survey
 http://www.modernhealthcare.com/article/20130713/DATA/130709976
 $249
 SHM State of Hospital Medicine Survey (Hospitalists)
 http://www.hospitalmedicine.org/AM/Template.cfm?Section=Surveys2&Template=/CM/HTMLDisplay.cfm&ContentID=29857
 $259 (member price)
Other Sources of Compensation Data

13.  Parties involved
 Duration
 Duties
 Compensation
 Transferability
 Termination
Basic Contract Components
Protects your job if
practice is purchased.
Can your contract be sold
to another practice?

14.  Parties involved
 Duration
 Duties
 Compensation
 Transferability
 Termination
Basic Contract Components
How contract ends…
Expiration (term over)
With cause (“Fired”)
Without cause (any reason)
Mutual agreement, usually with
notice

15.  Parties involved
 Duration
 Duties
 Compensation
 Signing Bonuses
 Malpractice Insurance
 Transferability
 Termination
 Noncompete clauses
Areas for Scrutiny

16.  How much?
 When?
 Repayment may be required if you do not complete
the term of the contract
 It is essential you understand repayment terms
 May be prorated by percentage of contract completed
Signing Bonuses

17.  Limits – usually per claim and aggregate ($1m/$2m)
 Type of Malpractice Policy
 Occurrence (becoming rare)
 Claims made
 Tail insurance required when changing jobs
 Who pays for tail insurance?
Malpractice Insurance

18. Cost of Malpractice Insurance
Tail insurance typically costs 1.5 - 2x the annual premium
http://www.acponline.org/residents_fellows/career_counseling/malpractice_insurance.htm

19.  Legal in most states
 Should have a clearly defined
 Duration (1-2 years)
 Location
 City, County
 Radius
 Zip or Area Code(s)
 Scope of practice
 Buy out option
Noncompete Clauses

20. States That Prohibit Noncompete
Virginia
Prohibited if employer is
a general corporation
Tennessee
Prohibited unless employer
is hospital or medical
school practice plan
CA
MT ND
SD
American Health Lawyers Association. Restrictive Covenants in Physician Employment Relationships
http://www.bassberry.com/files/upload/AHLANonCompeteJuly2010.pdf

21.  Identify and prioritize problem areas
 Ask potential employer if contract is negotiable
 Start by negotiating your highest priority area(s)
 Have a plan if negotiations fail
Negotiating

22. When to get professional help
Lawyer
 Questions about
 Definitions
 Enforceability
 Help with Negotiation
Accountant
 Questions about
 Compensation
 RVU based Productivity
 Share of collections
 Bonuses
It is essential to hire professionals with healthcare
employment contracting experience.

23. Questions?