Contracting 101: Tips for Physicians and Health Professionals - Part 11

Wednesday, July 17, 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

We continue with our blog series on contracting tips for physicians and health professionals. Collectively these blogs are intended to provide a review of the basics of contracting for physicians and health professionals, primarily by discussing employment agreements. We will 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.
 
By the end of the series it is our hope that physicians, nurse practitioners and other health professionals will understand the common language and terms found in employment contracts, so they can successfully negotiate them. The more knowledge employers and employees have on employment agreements, the more chance they each have for avoiding potential problem areas and legal entanglements.
 
Our comments here are meant to provide general rules we have learned from our experience. However, please remember, every situation is different and there are exceptions to every rule.


Tip 26 - Work Out and Specify The Call Schedule.

Your contract will likely say that you will be assigned call as the practice decides. You may want to request that the contract be clarified to say that you will take call on an equal basis with the other physicians and on a mutually agreed upon rotation. A tip would be to discuss call schedules in your interview, as they can vary widely between practices and specialties. Make sure that your contract consistently notes your call schedule with what was discussed in your interview.


Tip 27 - Shared Overhead vs. Physician Specific Overhead.

In many employment agreements a doctor’s income is based on what he or she takes in (payments) minus expenses or overhead. Overhead is a term that refers to all shared costs of a practice, and examples include rent, utilities and malpractice insurance. Allocating overhead is one of the stickiest issues facing a group practice.

Shared overhead refers to all the physicians in a practice splitting the overhead from the profit center equally. Models that divide costs equally reinforce the sense that all physicians in the group should work as a team. Everyone pays the same toward whatever the practice spends.

On the other end of the spectrum is the physician specific overhead plan. Each physician (or each practice site or specialty subgroup) becomes an individual cost center, each one paying only for what it spent. This can include continuing medical educations (CME), cell phone, auto reimbursement and travel. This may seem like the fairest approach, but it can also be an administrative nightmare. You will need an administrative structure to track every cost.

Discussions about overhead are now part of every contract negotiation. So you should be ready to discuss.


Past and Future Blogs on Employment Contracting.

 
To review our previous blogs on physician contracting tips:

    -  Part 1        -  Part 6
    -  Part 2        -  Part 7
    -  Part 3        -  Part 8
    -  Part 4        -  Part 9
    -  Part 5        -  Part 10

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, shared overhead, physician specific overhead, covenants not to compete, business ventures, Florida health lawyer, Florida health law attorney, health attorney, health lawyer, The Health Law Firm
"The Health Law Firm" is a registered fictitious business name of George F. Indest III, P.A. - The Health Law Firm, a Florida professional service corporation, since 1999.
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7/17/2013

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