Doctor Employment Lawyer Blog

Everyone knows that training to be a physician is expensive. Not only do you pay the outrageous expense of medical school, but you follow graduation with residency and internships earning a pauper's pay. Clearly, negotiating your first year attending salary is pretty critical. At least it seems pretty clear to us.

Despite all of the expense of a medical education very few residents we speak with are prepared to negotiate their first physician employment contract. Instead, many residents accept the pay they are offered and sign whatever is put in front of them.

Your first year's salary is the starting point for all future salary discussions, raises and negotiations. Therefore, if you start out $10,000 below your value, you will be spending the first few years of your career trying to catch up. It's possible that you will never the notice the difference, but not negotiating means you have no idea whether you are missing out on an opportunity.

I am not saying that the first offer is always a bad offer, or even that the first offer is never the bottom line last offer. But I am saying that, if you don't ask, you don't get.

Have you ever had a situation where someone made you a promise and then later tried to change the terms of that promise? Maybe a friend offered to drive you to work every day for nothing in return and, after a month or so got sick of that deal and asked you to start paying for gas.

Contracts (even physician employment contracts) are really just promises where both sides give something up in exchange for some agreed upon terms. And sometimes (even in the case of an employment agreement) conditions change and the deal has to too.

Many practice groups today have complex compensation models that based on revenue estimates that can only be met by maintaining a specific patient load, physician staff and/or medical support staff. A significant change in any of those factors could make a compensation plan unsustainable.

So what happens if you meet all your obligations under your employment agreement and, for reasons completely outside your control, the practice loses 50% or more of your revenue? Can your employer alter the terms of your employment contract?

As usual, it depends on the specific terms of your agreement. However, in most cases, changes to the employment agreement require that both you and your employer agree to the changes. At the same time, if your employer has an employment termination provision, your bargaining power may not be all that powerful.

Before making any decisions about how to respond to a proposed contract amendment, evaluate your value and ask yourself the following:

(1) How necessary am I to this group? Keep in mind that everyone is replaceable. But being replaceable is not the same thing as "easily replaceable." If you come with a renowned reputation or a valuable research grant you likely have more room for push back than a newbie with no experience.

(2) What are my colleagues doing? There is often strength in numbers. A practice group may risk losing one physician, but would it really risk losing all of you?

(3) What is my Plan B? Having other opportunities waiting in the wings makes pushing back a much less risky option.

Keep in mind that there is usually more than one solution in contract negotiations. Taking an all or nothing approach can often leave you with nothing. That doesn't mean you should accept a compensation reduction, but it does mean you should explore all options before walking away.

What do you have to disclose on your physician employment application? The easy answer to this question is: Everything. Well, not EVERYTHING, but everything that is specifically requested. For example, if you are asked to disclose "any arrest history (regardless of conviction)" and you fail to disclose that underage drinking ticket that you received when you were 18 years old, it could come back as a basis for termination with cause in the future.

Not only do you need to read the questions you are asked very carefully, but also make sure you understand what your Physician Employment Agreement requires with respect to to the answers you provide.

This seems pretty straight forward, but often the questions are not quite as clear as the example above. Whenever a question might be subject to interpretation, you have to determine whether to err on the side of caution. It really depends a lot on what is asked and the context within which it is asked.

As we always do in this blog, it comes back to reading everything you submit or sign very carefully. It may take an extra hour that you don't think you have, but it will be worth protecting your job and your reputation down the line.

Nearly every state in the U.S. has adopted a policy of employment "at-will," meaning either the employee or the employer can terminate the relationship at any time, for any reason. For most of us this means we can be fired at will, regardless of whether there is any cause for termination. Employment contracts usually override the "at-will policy" and offer a promise of employment. Sometime that means that your employment is guaranteed for a specific amount of time. However, as with everything in life, there are few true guarantees.

Assuming that your employment agreement does obligate the hospital or practice group to continue your employment for a specific periof of time, there are always exceptions. For example, you typically must maintain privileges at a specific hospital or hospital group. That seems like a straighforward obligation, but what if your employer decides to withhold assistance in maintaining privileges or stops paying your dues in a timely fashion?

More commonly we see doctors signing a one, three or even five year agreement that actually includes a provision that says the doctor may be terminated at any time, without notice, with or without cause. Essentially, the contract is in effect unless otherwise terminated. This means that, so long as the agreement is in place the employer will perform its obligations. This also means that, despite a one, three or even five year term, there is no guarantee of continued employment.

If you are moving your family across the country to take a job that you think will last at least five years, make sure your physician employment agreement says what you think it says.

It sounds a bit ridiculous, but it could be true. It is not uncommon for physician employment agreements to include a clause that gives your employer the right to collect any and all income that you receive from outside activities. This includes speaking fees, expert witness fees and moonlighting activities.

You might think this sounds a bit unfair. I can assure you that your employer thinks your salary pays for all professional activities. The fact is that being a doctor is a unique profession in that your devotion to your employment can be critical to patient lives. It is not always unreasonable for a physician employer to want to ensure that your full working time and attention is devoted to your practice, hospital, and/or division. But, that doesn't mean that you should be denied the ability to earn extra income for work that you actually perform.

The key fact that all physicians should keep in mind is that your employer can only lay claim to your outside income if you sign an agreement that says they can. If you are negotiating a doctor employment contract with an employer that considers such a provision an absolute requirement, you have the choice as to whether you want to work for such an organization.

There are plenty of hospitals and practice groups out there that want you to build a name for yourself by speaking at conferences. And there are plenty of hospitals and practice groups that give you the freedom to make enough money to pay back loans and support your family through expert witness fees and/or moonlighting. It's better that you know and understand which type of employer you will be working for before you sign the employment agreement. And, if you're not sure, asking might be a good idea.

You are ready to move to a new hospital or practice group. You think you have a really great offer, but do you really? It is important to look beyond just compensation when assessing a physician employment agreement. Your current malpractice carrier may not cover you after you leave your current position. In most situations, supplemental insurance or "tail coverage" is needed to cover malpractice claims made after you leave employment.

In the past, malpractice coverage was usually "occurrence-based," which meant that as long as a you maintained coverage at the time of the alleged malpractice incident, you would be covered. However, with the rise of malpractice claims, "claims-made" policies have become more popular. Claims-made policies cover a physician for claims made during the period of time in which the insurance is maintained, and therefore must be continually maintained. However, when you change jobs, it can be extremely costly to obtain claims-made coverage with the new employer that would cover prior acts with the past employer. Thus, tail coverage would need to be purchased to protect you.

But, whose responsibility is it to foot the bill for tail coverage? Often times, this is negotiable. Occasionally, a hospital or practice group will pay for tail coverage complete. More commonly, you and your employer either share in the cost, or the employer may place certain conditions and terms under which it will pay for tail coverage. There are a number of unique and creative agreement possibilities.

It is important to assess your personal needs when agreeing to a doctor employment contract with regard to tail coverage. Properly negotiating your employment agreement will provide you with the financial certainty and flexibility necessary for you to be able to take advantage of attractive professional opportunities that may come your way.

written by Poonam Khatri

Before there is even a physician employment contract to review, doctors should investigate whether a hospital or practice group is truly going to be a good fit. Too many times we have seen physicians get into bad employment situations just because the pay was good. It does not take long for them to realize that no amount of compensation can justify staying in an uncomfortable working situation for the long term.

The following tips will help you conduct a little due diligence before accepting an offer of employment:

1. Culture. Speak with as many team members as possible. Don't just contact the physicians. Try to speak with the nurses, PTs, assistants and support staff. They will likely have a different perspective to share.

2. Reputation. Use the internet to find out what people are saying about the practice/group. Search each individual physician as well as the practice itself.

3. Volume. Ask the following questions: How many patients does the practice have? What is the breakdown of private pay versus public pay patients? How many patients does each doctor see per clinic? What were the previous year's total collections for the practice/group?

4. Vision. Ask about the practice/group's future plans. Are there plans for growth? What opportunities exist for you and what opportunities have your potential colleagues been able to conquer?

5. Attrition. How many employees have left the practice/group over the last 3 years? If a high number of people in any position have left, that might be an indication of how your potential colleagues interact with others.

Most doctors we meet are so focused on patient care and medicine that they fail to protect their interests when signing their physician employment contracts. They proceed under the impression that, as long as they do well for their patients and build a successful practice, things will be fine with their employment. In most cases, that is an accurate assessment. However, sometimes doctors get into horrible employment situations and have almost no protections in their agreements. They get overloaded with administrative work; they are under paid because of a lack of adequate billing procedures; or they lack enough patients to build a practice because there is no marketing investment by the employer. Whatever the issue, sometimes good doctors get into bad employment situations.

You might think that a simple solution would be to resign and move on. And, sometimes that is the best and simplest solution. But, what about when you have signed a broad non-compete agreement or have committed to a community supported position that requires a substantial payout to terminate the contract? The costs of getting out of those contracts can be higher than the costs of suffering through the terms. But, no one should have to stay in a bad employment situation.

If you want out of a bad employment contract that seems to have no way out, you need to be a bit more creative about your departure. You need to analyze why the situation is so bad. Determine whether promises were made, but not kept. Identify who or what is making your employment dissatisfying. And, review your physician employment agreement. Does your employer have any obligations under the contract? Is your employer performing all of its obligations?

Find your leverage and create a plan of action. With contracts, there is almost always a way out. The key is finding the least expensive way out.

If you are in the last year of your residency, you have every reason to celebrate. After years of studying, learning and making a modest income, it is finally time to improve your career significantly in terms of pay, benefits and specialization. You have worked hard to get here, and it is important to not lose sight of your career path and your goals. Stay the course and avoid common mistakes made by residents during and after their final year.

Even if you unsure as to whether you want to pursue a fellowship, apply early and ask questions. If you wait until the last year of your residency to apply for a fellowship, it may be too late. Try to apply as early as two years before your residency will come to a close and no later than 1.5 years before it ends. When you do apply in a timely fashion and are accepted for your fellowship, you may receive little information as to your expectations. Most residents are only fully informed about their pay. However, this is not enough information for you to know how many research projects you should complete or when and how much you will be on call. Have a list of questions prepared and use a bit of finesse to get them answered early on. If you have done your homework and have established expectations with the leaders of your program and then there is a change in leadership, be sure to have the conversation all over again to discover any new rules or expectations and reassess your options.

After your fellowship, don't jump into the first job offer right off the bat. Although it is tempting to get started immediately because you are excited to be finished with your residency and the money looks good, think carefully instead and ask probative questions. Make sure this is what you want. Also, take time to talk to your recruiter, if you have one. It won't cost you anything, and they may be able to help you compare options. If you already have contracts in hand to consider, you may want to take the next step and engage an attorney to help you negotiate and/or understand what you are about to sign. Apart from legal and professional considerations, think long and hard about how you want to shape your personal life. What is important to you? Likely, you will be signing a contract with a length of a year or more. One, two or three years is a long time to be stuck in an environment you don't like while missing out on precious time with your family and friends. Pay extra attention to what the local community is saying about your potential employer and closely scrutinize the schedule expectations and additional commitments that may be hidden in your contract. If you are going to be a partner, spend time with your future partners. Make sure you can trust them and that they are forthright and honest with you. Have people you trust meet them. Have frank conversations and make sure your goals, integrity and ethics are aligned.

Finally, after you have a stake in a practice that you've formed or entered into after much evaluation, you should be ready to run it and run it well. It is up to you to develop long-term strategies that will benefit you, your partners, your employees and the patients. It is important to run an efficient practice from a business standpoint while still allowing those who work there to maintain a certain quality of life. New physicians will be evaluating you as you interview them. Be ready to go beyond a simple salary explanation. Residents will likely evaluate practice opportunities with questions regarding incorporation, ownership shares, buy-in, benefits, malpractice insurance, daily census, technology, billing, marketing and profitability. Have these issues worked out ahead of time so that you make the cut and attract the best physician employees.

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.

This past weekend the New York Times ran a story called "The Changing Politics of Doctors" by Tara Parker-Pope. The story was focused on how many doctors have been moving away from independent practices and opting more for salaried hospital positions, which in turn has affected their politics. There was an implication that doctors with salaried positions care more about access patients' access to health care and less about insurance reimbursement because they don't have to worry about running the business. This seems to be an over simplified explanation (and perhaps it's also an over simplified interpretation).

What was missing from the article is the fact that many hospitals are now creating compensation structures that marry pay with collections. Productivity pay, as this is often called, allows hospitals to offer physician employees the opportunity to earn market compensation, but only if their productivity reaps specific revenue benchmarks. So, even though doctors may be moving away from independent practice ownership, at least some of the burden of insurance reimbursement is still being passed along to them.

I believe that patients' care and their ability to access care has always been a priority for doctors, at the very least most doctors. Maybe what Parker-Pope overlooked was the fact that the old model has failed to provide either equal access to care or an adequate ability for physicians to earn enough to justify the enormous costs of medical education.

Physician employment contracts are constantly evolving. The trend for compensation has moved towards productivity based pay and practice groups are adding greater and greater restrictions to their doctor employment agreements. Physicians need to be more critical of what promises are being made to support their professional development.

One issue confronting doctors' employment is the issue of where they work. Hospitals and practice groups continue to expand and increase their locations. This can affect a number of issues that a doctor may not consider when negotiating the terms of their employment, such as: (1) where is his/her office (does he/she even have an office?); (2) does the non-compete apply to thereafter added locations; and (3) what is the maximum distance the physician will have to travel to get to work?

On more than one occasion I have seen physicians accept employment with an employer that does not provide administrative office space or adds additional locations that are exceptionally far from the physicians' homes. Make sure you consider these issues before accepting an offer of employment.

No matter how thoroughly you investigate a practice group, hospital or other employer, as a doctor you may someday be faced with an ethical dilemma regarding patient care, resident hours, billing, referral arrangements or other practices. Knowing how to make a report and to whom can affect the legal protections available to you as well as the ramifications on your future career.

A physician's first step should be to investigate and determine whether the issue is a legal issue, a safety issue or a personal ethics issue. All three are extremely important, but there are whistleblower laws in place to protect you when the issue affects public funds and public safety. Personal ethics issues may or may not have such protections, depending on the specifics of the concern.

Next, you should think about the ramifications that a report will have. Will it promote the change you believe is necessary or will it cause further damage to yourself or others?

Most importantly, you need to determine where to turn. Some issues are best addressed directly with your employer. But, there are issues that need to be reported to authorities. Regardless, you should approach an attorney or other professional whom you trust and fully explore all available avenues.

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.