Contracting 101: Tips for Physicians and Health Professionals - Part 10

Friday, July 5, 2013
By Christopher E. Brown, J.D., The Health Law Firm and George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

This blog is the tenth in a series intended to provide a review of contracting basics for physicians, nurse practitioners and health care professionals, primarily by discussing employment agreements. We will continue to highlight many of the common provisions found in employment contracts, along with many of the mistakes and pitfalls that we see in our day-to-day practice.
 
Our hope is that physicians, nurse practitioners and other health care professionals will understand the common language and terms found in employment contracts for professionals so they can recognize mistakes commonly made when negotiating them. We strive to help make both employers and employees more knowledgeable about employment contracts so they can avoid potential problem areas and legal entanglements.
 
Our comments here are meant to provide general rules we have learned from our experience. However, please remember in contracts every situation is different and there are exceptions to every rule.


Tip 24 - Be Aware of “For Cause” Termination and Include “Cure Periods” to Protect Yourself.

At least one section of the contract will talk about how the contract may be terminated prior to its scheduled end date.

“For cause” means that one of the parties has a reason to terminate the contract. Typically, the contract will contain a list of “for cause” items that allow the employer to terminate the contract with little or no notice. These items include loss or suspension of your medical license, loss of hospital privileges, exclusion from the Medicare Program, or conviction of a crime. Sometimes the list will include a generic item, such as inappropriate conduct. While negotiating, try to limit the “for cause” list to truly extreme acts, such as the loss of a professional license. Usually the right to terminate “for cause” is reserved to the employer. Rarely, will it be offered to the health care professional.

Sometimes “for cause” includes the failure to observe one of the employer’s policies. In this instance, make sure you have the right to “cure.” The right to “cure” means that the employer must notify you that you are violating a “for cause” provision and give you a time period, such as 10 days, to correct the situation. If you “cure” the issue, the contract cannot be terminated, and it will continue in effect. We briefly discussed “cure periods” in part five. Click here to read more.


Tip 25 - Understand Vacation and Paid Time Off Policies.

Your contract should state the amount of vacation you may take with pay. Vacation policies vary by practice.

Does this particular practice lump vacation, sick days and continuing medical education (CME) time together? Are the days off cumulative? Do they carry over from year to year? Does your paid time off include holidays? If so, which ones? These are all important questions to ask and understand.

Most practices do not allow vacation to accrue from one year to the next. Larger practices will also have a staff physician handbook that will include the practice’s policy for sick leave and other absences. Be sure the contract spells out if and which holidays you receive off, and if holidays are included or in addition to vacation time. This could mean an extra 10 days off per year. If maternity leave is a concern, ask the practice for its policy. Leave for military service is covered by federal law, and you should get specific advice on it if you can be called to active duty.

Also note, CME is an important component of your contract. Most contracts allow one week for CME a year, in addition to your vacation. The employer should pay the cost of your CME, such as registration fees, lodging and travel. Most contracts will state an upper limit on these expenses.


Past and Future Blogs on Employment Contracting.

 
To review our previous blogs on physician contracting tips: click here for part one, click here for part two, here for part three, here for part four, click here for part five, click here for part six, click here for part seven, here for part eight, and here for part nine.

In our future blogs, we will continue to provide tips on various issues to watch for in health care employment contracts.


Contact a Health Care Attorney Experienced in Negotiating and Evaluating Physician and Health Professional’s Business Transactions.

At the Health Law Firm we provide legal services for all health care providers and professionals. This includes physicians, nurses, dentists, psychologists, psychiatrists, mental health counselors, durable medical equipment suppliers (DME), medical students and interns, hospitals, ambulatory surgical centers, pain management clinics, nursing homes, and any other health care provider.

The services we provide include reviewing and negotiating contracts, preparing contracts, helping employers and employees enforce contracts, advice on setting aside or voiding contracts, litigation of contracts (in start or federal court), business transactions, professional license defense, opinion letters, representation in investigations, fair hearing defense, representation in peer review and clinical privileges hearings, litigation of restrictive covenant (covenants not to compete), Medicare and Medicaid audits, commercial litigation, and administrative hearings.
 
To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.


Comments?

As a physician, do you have any questions about contracts? Tell us your mistakes or triumphs in negotiating your contract below.


About the Authors: Christopher E. Brown, J.D., is an attorney with The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida, area.  www.TheHealthLawFirm.com  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone:  (407) 331-6620.

Tag Words: physician employment agreement, physician employment contract, health professional contracting, negotiating business transactions, physician contracts, contracting tips, contract attorney, business law attorney, business lawyer, contract lawyer, contract litigation, business litigation, contract terms, physician agreements, business transactions, restrictive covenants, noncompetition agreements, covenants not to compete, business ventures, for cause termination, cure period, continuing medical education (CME), time off, vacation, paid time off


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7/5/2013

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