Question

identify the parts

• Explain-the-key-elements of the physician's contract.

Answer 1

Key elements of the physician's contract are the following:

1. Compensation

The compensation varies widely depending on several factors like specialty, location, and experience. The physician should be able to convince an employer that he/she will be adequately productive and cost-effective to justify the compensation desired. It is really important that the physician should fully understand the salary and incentives calculation formula used by the group. The variables and methodology of incentive payments calculation determine the appeal of the offer.

Usually, the incentives tied to productivity are defined in terms of charges, RVUs, and collections. Sometimes they add a different set of performance variables that reflects patient satisfaction, quality improvement measures, utilization etc. Often the physician gets frustrated and confused with a higher number of incentive criteria. The physician should analyze the incentive variables carefully to find out which of these variables are beyond his or her control. The physician should make a comparison of compensation offered to industry norms for better negotiation.

2. Work schedule

The contract should clearly state if a physician is hired as a full-time or part-time employee, if the physician will have to perform administrative duties, and share in call schedules of after-hours. The physician should be informed of all the performance evaluation processes that will be followed and the effects of such evaluations on the physician. It should be stated in the contract if any additional payment is offered for on-call duties. A physician’s work schedule should include the length of the workweek in hours and the number of patients to be seen per hour and per day. Working relationships, such as whom the physician reports to and who reports to the physician etc., are usually clearly stated in the contract.

3. Benefits

Benefits offered have an important role in determining the value of the position. Usually the benefits include health, vision, dental, and malpractice insurance; vacation and sick leave; CME reimbursement; continuing education reimbursement; relocation; retirement and disability plans etc. It is really important to understand the scope of the benefits offered with an effective date. An essential benefit is professional liability coverage. This will protect the physician in the event of any patient harm caused while under the physician’s care.

Usually, there are two types of professional liability coverage, occurrence-based coverage and claims-made coverage. Occurrence based policies cover the physician for incidents during the coverage year without considering the time of filing of the claim. Any claims-made policy covers the physician only for claims filed during the coverage year, which needs malpractice tail coverage for when the employment term ends.

4. Termination provisions

The termination clause specifies the length of the contract. It is really important that the practice states clearly in the contract probable reasons or grounds that could lead to termination, such as poor performance, lack of cooperation etc. This agreement could include a provision that allows the employed physician to self-terminate. Termination clauses in the contract include termination without cause and termination for cause. The termination without cause of the contract is a provision that allows the physician or the practice to terminate the employment without any particular cause. There is a typical notice provision that mostly requires a written notice 30 to 90 days before termination. The termination for cause of the contract allows the hospital to terminate the physician for a cause. The physician should make sure that the agreement requires the hospital to give written notice of the cause for termination and a chance to fix any alleged breaches within a reasonable period.

5. Restrictive covenants

Restrictive covenants, often called the non-competition agreement clause, are one of the most significant and the most contentious aspect of an employment contract. According to this clause, following termination, the physician is prohibited from practicing for a particular period of time in a particular geographical area. The aim of this clause is to prevent physicians from causing harm to the practice by taking the hospital’s patients with him or her. Restrictive covenants are enforced by many states to protect the employer’s interest. These states usually require that restrictive covenants must be limited in duration and geographic radius. Restrictive covenants usually last for one to two years after termination of employment. A reasonable geographic radius depends on the location of the practice of the physician. A 25 miles’ restriction is appropriate for a rural area, but a one-mile radius is enforced in an urban setting. Some states do not allow restrictive covenants; however, non-solicitation provisions are allowed by these states. These provisions prevent the physician from soliciting former patients etc, after employment termination.