Physician Contracts: Pay Attention to These 4 Things

The steady rise in physician employment brought about by regulatory changes and consolidation has led to more doctors than ever before seeking jobs as employed physicians rather than private practice owners. We see this across the entire healthcare spectrum, including locum tenens staffing. Thus, doctors have to be very careful about signing contracts that may or may not protect their best interests.

Whether a doctor takes a position as a salaried employer or goes to work for a locum staffing agency like Tiva Healthcare, there will be contract details to work out. The first thing doctors should understand is that they are not attorneys. A doctor who expects to be able to thoroughly understand contract language is no different than the attorney who expects to read and fully understand a medical textbook. Both should leave matters of expertise to the other.

In simple terms, doctors should have attorneys look over employment contracts prior to signing. A good attorney who knows his or her stuff will look carefully at four things:

1. Employment Terms

The term of employment refers to the amount of time covered under the contract. For example, a permanent placement physician may sign a contract with a term of two years. A locum tenens physician may be offered a contract good for six months. Employment terms are important if, for no other reason, than what happens after said terms expire.

It is not uncommon for healthcare facilities to offer multi-year contracts to physicians with the expectation that employment will be terminated at the end unless the doctor agrees to a pay cut. Facilities do this so that they can offer higher wages to attract doctors now without having to worry about raising their pay later.

2. All Combined Compensation

The second thing a good attorney looks at is all the combined compensation provided for in the contract. This includes straight salary, proposed overtime pay, bonus pay, and additional benefits like health and life insurance. Benefits are what separates the best employers from the rest, so it is in the doctor’s best interest to negotiate the most attractive benefits package possible.

3. Non-Compete Agreements

Another big issue is the non-compete agreement. Such agreements are difficult to enforce in some states but rather easy in others. Regardless of the state in which a contract is offered, a competent attorney will insist on clear language spelling out, in detail, the restrictions imposed by the non-compete. That attorney would also advise against signing a contract in which the non-compete was so restrictive as to prevent the doctor from making any sort of short- or long-term plans.

4. Grounds for Termination

Lastly is the issue of termination. As you may know, employment contracts can base termination on ‘with cause’ or ‘without cause’ language. A contract based on ‘without cause’ termination opens the doctor to loss of his or her job for any reason under the sun. A good attorney will insist on at least some period of notice to give the doctor time to look for another job.

In cases of ‘with cause’ termination, a contract should spell out exactly what causes are sufficient. The more details, the better. Terminology should be clear, specific, and not open to multiple interpretations.

Employment contracts are part of being an employed physician. Unfortunately, the current state of medicine in America is such that both employers and employees have to look out for their own best interests. That means doctors have to pay special attention to the contracts they are offered. If there is ever a question, an attorney should be consulted.