Breaking Down Physician Employment ContractsMarch 15th, 2013 5 Min read Blog
The employment contract between a clinic and a physician defines expectations and determines outcomes. Several topics must be addressed in an employment contract in order to protect the clinic and provide clarity for both the clinic and the physician. A well-written contract prevents misunderstandings and circumvents lawsuits. Below are some components of a physician employment contract. Employee Duties and Responsibilities Itemize each duty that the clinic requires or expects the physician to perform, and address who sets clinic hours and how work schedule changes are made. Include on-call requirements, and list any requirements that the clinic may have for the physician to become a member of hospital staff. Specify patient record, confidentiality and reporting requirements that the physician must meet. Restrictions Determine what physician activities might be harmful to the clinic. Clauses that enforce legal prohibitions and keep the physician in conformance with the laws related to patients receiving Medicare or Medicaid payments could be included here. Non-compete clauses and clauses that restrict the physician's public relations activities might be added. Clinic Obligations All duties of the clinic that have an effect on the physician need to be specified. The American Medical Association, in its 2008 AMA Annotated Model Physician Employment Agreement, provides excellent guidelines for wording of employer obligations. In part, it states: "The Employer shall provide or arrange to have provided an office and examination rooms on its premises at [address] for use by the Physician in treating and examining patients. The Employer, at its expense, shall engage the services of such administrative, nursing, scheduling and billing assistance as necessary for the Physician to fulfill his or her obligations under this Agreement." (Page 8, Item 4, Section 4.1, Paragraph 1) Compensation, Benefits and Reimbursement of Expenses A good contract clearly lists all details of physician compensation. Rate of pay, pay dates, insurance, retirement plans, clinic-paid travel and education, vacation pay and sick leave all need to be addressed. Each segment requires enough detail to be clearly understood by both parties. The types of expenses that are eligible for reimbursement, as well as the requirements that the physician must meet before he is reimbursed, need to be plainly set forth. Contract Renewal Terms Many contracts specify that the contract automatically renews if neither the clinic nor the physician takes action to end the contract before a certain deadline. Such a clause can be beneficial. The drawback is that clinic personnel may miss a deadline on a contract that the clinic did not want to renew, or one for which a change in contract terms had been planned. Termination of Employment The section regarding termination of employment needs to cover all aspects of possible terminations. Some contracts contain a clause that the physician's employment can be terminated at will. Usually there is a clause specifying the length of time that employment must continue after giving notice. Reasons for immediate termination of employment should be listed. It is good to include rules regarding orderly procedures that must be followed in the case of termination. Often a clinic will include a clause stating that client records remain the property of the clinic. There also may be terms regarding what happens in the case of the disability or death of the physician while employed by the clinic. Remedies A good contract specifies what legal remedies either party may pursue should there be a dispute regarding the contract. Often, this section states that mediation must be pursued before a lawsuit can be filed. Statements regarding how and where mediation or legal action can be pursued give the clinic the opportunity to keep such actions local. Severability This clause allows the rest of a contract to remain in effect if one clause is legally declared unworkable. The Infectious Diseases Society of America, in its sample document entitled Physician Employment Contract, provides the following example of wording for this clause: "In the event that any provision or part of any provision of this Agreement shall be determined by a court of competent jurisdiction to be invalid or unenforceable, such determination shall not affect the remaining parts or provisions of this Agreement, which shall continue in full force and effect." Amendments, Modifications and Contract Cancellation Include a statement that allows binding changes to be made to the contract only if such changes are made in writing and signed by both parties. Attorney Review Because an employment contract is a binding legal agreement, a clinic is wise to have an attorney who is familiar with healthcare laws assist with contract wording. Request that the attorney review any potential changes, then ask him or her to review the contract once again before it is signed. Once both parties have signed the contract, the parties are legally bound by the agreement. Contracts that are complete, ones that are clear and can be fully understood by both parties, build rapport. A good contract helps ensure employer-employee relationships that last. Be sure to read our contract negotiation document in the Resident Resource section of the website, or work with your CompHealth consultant to facilitate a positive transition for both parties in the negotiation process. Now that you are more familiar with the elements of your next contract, be sure to take a look at some of our physician job opportunities to find some great openings that match your needs.