Doctor Employment Lawyer Blog

Private practice can be extremely rewarding for doctors, but the practice of medicine is not a one-size-fits all profession and physicians have many choices today. Between hospital employment, flex positions, and locums tenens, new doctors can craft a medical career unlike those of the past.

For doctors who want to avoid the "business of medicine," hospital staff positions or temporary locum tenens positions may be a better option. You have the ability to negotiate a long term or short term physician employment contract, depending on your career and personal goals. Knowing your options is the first step to determining where you want to go with your career.

Regardless of which option works best for you, they each bring with them unique issues. In private practice you may be expected to build your own patient base and focu on practice development. In a hospital setting, you may be dealing with more bureaucracy. And most locum tenens positions require that you do a little of everything.

Earlier this month, the Illinois legislature passed a workers' compensation reform bill that slashed reimbursements to doctors who treat injured workers by 30%. Clearly, insurance companies will save big from the new law, but doctors are once again asked to do the same amount of work for less pay. In turn, practice revenues will be affected and, of course, so will doctor employment agreements.

I have repeatedly mentioned the trend towards tying physician employment compensation to receivables in this blog. A medical practice with

As a physician negotiating an employment contract, you need to be aware of the make-up of your potential employer's patients. Even if your compensation is not directly tied to receivables, collections determine the viability of a practice and the security of your employment. Due diligence is not just a practice for business owners. To establish a long term, successful career as a physician, you have to examine your employer's practice to the same degree you would examine your own.

Doctor employment agreements can range in duration from one year to five or more. Locking yourself in to a long term contract has its perks and drawbacks.

On the plus side, assuming you have properly negotiated the terms, your compensation and duties are locked in. You don't need to worry about renegotiating every year. You will know what is expected of you and what you can expect from your employer (to some extent at least). And, you can feel a bit more secure in your employment status.

Of course, locking yourself in for a lengthy term has some drawbacks as well. To begin, if you have not done your due diligence and are unfamiliar with the employer's culture, you may end up working in an uncomfortable, or even intolerable, environment. Moreover, you will be locked into your compensation terms even though a lot can change in five years. Not to mention the fact that a five year term does not guarantee that your employer will actually employ you for five years (typically either side can terminate without cause so long as the required notice is provided).

The fact that there are a lot of potential downsides doesn't mean a long term agreement is a bad agreement. The most important thing is that the terms of the agreement are consistent with your professional goals. Make sure you identify those goals before negotiating an offered employment agreement.

You are finishing your residency (or fellowship), and you've just landed the job of your dreams. Congratulations! Now you're faced with a great challenge: Resisting the temptation to immediately sign your physician employment agreement.

Joining a practice group is an exciting time for both you and the practice group or hospital you are joining, but signing a physician employment contract without understanding your obligations and rights can cause you long term pain.

A well drafted employment agreement creates reasonable expectations between the employer and employee. When expectations are clear and understood on both sides, everyone wins, and future legal battles are avoided. A careful review of your employment agreement will provide you with a complete understanding of your prospective employer's proposed expectations in connection your new position within the group. It can also give you insight to the culture of the employer.

In reviewing our client's doctor employment contracts, we often see vagueness in employment duties. Many times, the employer expects the physician to perform administrative duties "as requested" by the employer. This means that your employer could potentially ask you to handle administrative matters about which you are unfamiliar. Such an expectation can easily interfere with the time you spend on your primary duties as a physician. When working full-time as a new doctor, time management can be a challenge. If your employer is expecting you to spend your time on items other than treating patients, you should be aware, and plan accordingly.

Lately we have been seeing private practice employment contracts that are dependent on hospital support. These are typically physician employment contracts in areas where there is a shortage of doctors practicing in that particular specialty. These can be great arrangements, but they can also be strait jackets for doctors that end up in a bad employment situation.

Physicians considering these types of employment situations should do their due diligence before accepting a position. Be sure that the practice's culture and processes meet your expectations. Research the reputation of the practice and speak with the physicians and support staff about how the practice operates.

Of course, this sort of due diligence should be performed regardless of the type of physician employment you are considering. But, the reason it is especially key in these situations is because you could up having to pay huge sums if you decide it's not working out. These employment agreements typically have a repayment schedule that is based on how much of the contract term is fulfilled. The sooner you want to terminate, the more it could cost you.

In these cases, it literally pays to know what you are getting into before you sign the employment contract.

No one likes to think of the end of a relationship when you are just getting started. But, in employment, an end is inevitable. Hopefully, it is after a long and prosperous career. Regardless, physicians need to understand how their employment contract can terminate.

Most physician employment agreements set forth events that trigger termination "with cause" and "without cause." "Cause" typically means a serious breach such as suspension or loss of license, conviction of a felony, drug or alcohol abuse, loss of malpractice insurance, loss of privileges, or other material breach. These are serious events that would obviously affect a doctor's professional reputation.

Because the term "cause" is typically understood to be in connection with a seriously bad act, a doctor negotiating his/her employment contract should be careful that the definition of cause in the contract is sufficiently clear.

Our office has seen at least one situation where a practice group tried to use a doctor's tardiness as a basis for "cause." Although we were able to stop the employer from going forward with the termination and keep the physician employed through the term of her physician employment agreement, she may have avoided the situation entirely had she had her contract properly reviewed from the start.

Being terminated "for cause" can follow you throughout your career. And if you don't understand what "cause" means, how can you avoid it?

So many doctors that come to our office tell us that their prospective employer told them that the Employment Agreement is standard and the terms are not negotiable. And, maybe that is true. However, there are a number of terms in doctor employment agreements that both parties would benefit from revising such as defining practice development and administrative responsibilities.

Furthermore, if the agreements are all the same and non-negotiable, can you see everyone else's agreement? Finally, the start of your employment is the best time to clarify details. I always remind our clients: "if you don't ask, the answer is already "No." So where is the risk in asking?"

The contract to contract is like the meeting before the meeting. It's the initial offer whereby the big terms are agreed upon before the nitty gritty details are discussed.

Many practice groups use an initial offer letter to lock down key terms before sending a physician a proposed Employment Agreement. This allows the practice to lock in salary and certain benefits before going down the road of negotiations. However, when reviewing an offer letter, doctors should be cautious not to bind themselves to terms about which they have not really agreed.

While compensation is not always the most important item in an Employment Agreement, it is the most important item in the offer letter. This is because, by signing the offer letter, the practice typically will take the position that compensation has been determined.

Of course, your signature on an offer letter does not prohibit you from revisiting issues. Just because you signed the agreement to agree, does not mean you really have to agree. However, signing the offer letter should be the first step in a long term employment relationship. And, it's never good to start by reneging on an initial agreement.

Congratulations to all of you who have just completed your residency. Most of you have already signed your employment contract and are preparing to take on your new role as an attending. I hope that you asked for everything you want in your employment arrangement and that your employer gave you what you want in a clear manner.

Just make sure you read your agreement and enjoy what you do.

Most physician employment contracts allow either party to terminate the agreement at any time by giving a certain amount of written notice. The notice period is typically 90 or 180 days. However, many physicians do not understand that the notice period is not a guarantee that he or she can work through that period.

I recently spoke with a physician who was shocked when her employer exercised the 90 day notice period by providing written notice and asking her to immediately leave the practice. The physician was paid during the notice period, but no notice of her departure was provided to patients or referring doctors. She was understandably upset because her patients were left with the impression that she did not even give them the courtesy of letting them know she was leaving.

This physician had believed that the notice period was a promise that she could continue to work for her employer during the 90 day period and use that time to inform patients and referring doctors of her departure. Instead, she was discovered that, as long as she was paid through the notice period, the employer was not under any obligation to allow her to treat patients during that period. Nor was her employer required to work with her to notify patients or referring doctors of her departure.

Leaving a practice without any notice to your patients or referral relationships is likely to damage relationships that may have taken years to cultivate. Patients don't usually understand that the employer owns patient information and a doctor likely will not have access to such information after leaving a practice.

The lack of notice can be damaging to the employer as well. Patients often impute the conduct of a treating physician to the practice as a whole. Leaving a patient wondering what happened to his or her physician is not likely to create a trusting doctor-patient relationship.

Working out an agreement about how to notify patients and referring physicians regarding a physician's departure at the start of the employment relationship is beneficial to all parties. It allows the doctor and the employer to protect their reputations and minimize patient confusion. It ensures patients are informed about whom they can contact about their treatment issues. And, it ensures that referring doctors know who will be taking over the departing physician's practice.

Of course, trying to work out those details at the end of an employment relationship is usually an exercise in futility.

I recently heard a story about a surgeon who accepted her first attending position without having a full understanding of her contract and the employer's expectations. It turned out that the employer expected her to take on all of the grunt work for the senior attendings. She was miserable and didn't have a lot of options given that she agreed to a non-compete and was not interested in moving.

In the excitement of finding your first job or a new job for that matter, there is often a rosy view of the future that prevents people from asking all of the questions that will affect whether the employment relationship is successful. And, while asking questions does not guarantee you will get honest answers or a realistic perspective, the answers usually provide some insight into the employer's culture.

Many hospitals start the hiring process by providing a physician with a Memorandum of Understanding. This documents usually lays out all of the terms that will be formalized in the final employment agreement. Since the Memorandum of Understanding is not an employment agreement, many physicians mistakenly believe that they can sign without obligating themselves to anything that would affect the employment agreement.

Memorandum of Understandings are the first step in the process of negotiation. It is the document that defines the basic provisions of the agreement. Often times, it will set forth key items such as the term of the agreement, compensation, duties, malpractice insurance, and even restrictive covenants. While it's true that the memorandum is not binding, signing it signals to the hospital or practice that you accept the details of employment as written and they can proceed to use those provisions in the final agreement.

Attempting to negotiate terms of the employment contract after you agreed to such terms in the memorandum puts a physician at a serious disadvantage. You're not barred from negotiating provisions, but you likely lose some credibility if you agree to terms in one document, but reject them in the actual contract.

Even doctors make bad decisions when it comes to employment. Whether it's signing an employment agreement without understanding the terms, taking on a position with a hospital or clinic that doesn't operate the way you thought, or joining a team that doesn't share your values; sometimes you just end up in a place at which you don't want to be.

If that time comes and you are a party to a non-compete agreement, you need to know whether the agreement is enforceable and, if so, where you can or cannot work. In Illinois, there is often a mistaken perception that non-compete agreements are not enforceable. However, the case of Mohanty v. St. John Heart Clinic, S.C., 225 Ill. 2d 52, 866 N.E.2d 85 (Ill. 2006), the Illinois Supreme Court affirmed the enforceability of restrictive covenants for physicians. In that case, the court concluded that reasonable restrictive covenants amongst physicians do not limit patient access to physicians and encourage established physicians and practices to hire and train less experienced physicians. The court further determined that a decision to ban such agreements amongst physicians should be left to the legislature.

At the same time, not all non-compete agreements are written in a way that is reasonable and enforceable. Knowing what you an and cannot do before you move on and accept another position ensures that you avoid unnecessary legal expenses associated with defending a claim that you breached your agreement. At the very least, you should read your agreement carefully before accepting a new position.

Physician Employment Contracts have unique issues, but most doctors look at the compensation provision and sign. It's understandable that a physician might think that his/her pay is the most important aspect of the employment agreement, but in fact there are issues that might make it difficult to ever move on to a new employer or start your own practice. While there are a number of concerns a doctor should address before signing an employment contract, below are the top five issues:

1. Malpractice insurance: Occurrence based or claims based? If the coverage is claims based, you will likely be responsible for purchasing tail coverage to continue coverage after termination of your employment. This can be extremely costly.

2. Duties: You may think that your duties are obvious or self explanatory, but every practice has its own way of divvying up responsibilities. You may have administrative duties for which you are responsible that require a large investment of time. If you don't address this before signing, you are agreeing to those responsibilities without question.

3. Non-Compete Agreements: Many doctors don't understand how far their non-compete agreement really covers. By signing your employment agreement, you may be restricting yourself from working in the same metropolitan area for some time after your employment ends. At the very least you should be cognizant of where you can and can't work in the future.

4. Non-Solicitation Agreements: You may have already spent years building your reputation and patient base, but most physician employment agreements explicitly state that all patients that visit the practice belong to the employer. If you are bringing a significant number of patients to your new employer, you should at least protect your future relationship with those patients.

5. Marketing: Many physicians have the mindset that patients will just show up. In today's environment, doctors have to market just like everyone else. If your compensation is dependent at all on productivity, you need to be certain that your practice is going to be marketed to the public. This isn't an exhaustive list, but being aware of these issues can help a physician negotiate a contract that he/she is happy with throughout the employment relationship and beyond.

I recently heard a story about a General Surgeon who signed her private practice employment contract without reading anything other than the compensation section. It turns out that the agreement she signed states that she was hired as a Primary Care Physician.

While this may not affect her employment at first, it could be an issue is things between her and her employer ever turn sour. Just like any other career, when a doctor starts a new job everything is exciting and positive. However, after the honeymoon phase ends and both sides reveals their flaws, things may not be so rosy. Errors like this one in your Physician Employment Contract could give your employer an opportunity to terminate your employment without any of the benefits for which you may have contracted.

Furthermore, if the employment contract is so inapplicable that even your specialty is incorrect, what else may be wrong? Are call duties clearly spelled out? Is the non-compete limited in scope? These are all important issues that can affect your employment and your future career. Make sure you know what you are getting into before you sign.