Physician contract with a stethoscope. Symbolizes medical professionals role in physician contract review

What Is an Adequate Physician Contract Review?

Are you a physician who is preparing to review a long, complicated compensation contract presented to you by your hospital employer or physicians association?  Daunting, isn’t it?

At Gardner Employment Law, our experience in reviewing physician contracts allows us to confidently address important factors which you could overlook.  If you want assistance with your physician contract review, give us a call today.

Why Is a Thorough Physician Contract Review Important?

Physician contract review directly impacts a physician’s well-being and his or her career. By thoroughly examining the terms and conditions outlined in their employment or partnership agreements, physicians can achieve fairness, protection, and clarity in their professional engagements.

In today’s world employers frequently attempt to include contract provisions containing burdensome obligations to physicians and inadequate pay.  As you may be aware, employers typically base compensation on complex formulas.  We addressed how physicians are paid in “Physicians Compensation Models.”  Physicians must diligently fortify their preparedness to protect their rights and interests with strategic caution.

The compensation structure may constitute the most crucial aspect of the physician contract review. You must understand what is being offered so that you receive fair compensation for your expertise and services, aligning with industry standards. You must analyze factors such as base salary, incentives, additional compensation opportunities, benefits, and the medical review process. By carefully evaluating these elements, you are armed with the necessary information to negotiate fair payment for your services.

Why Take the Time to Closely Review a Physician Contract?

Taking the time to slowly study every word in your compensation contract will help to understand your rights, responsibilities, and obligations.  We know that physicians are exceedingly busy and overworked, trying to stay up with all they must do in one day.  However, signing a contract placed before you without the required study is risky. As the saying goes, “The devil is in the details.”  A close examination of every term empowers you to make informed decisions about you career and protect you from potential exploitation or unfavorable working conditions.

We recently helped a physician client to leave a position in which the hospital was taking advantage of the loosely worded contract that he had signed.  Our client was a specialist, but the hospital assigned him to see patients that were far outside his area of expertise.  He feared not only for his potential exposure to liability but also for the patients’ welfare that he was required to treat.  Fortunately, we found an “out” in his contract permitting him to leave the onerous environment.

By identifying any ambiguous or vague clauses, employment contract review helps prevent misinterpretation or future legal disputes. This proactive approach fosters transparent and harmonious relationships between physicians and employers.

Additionally, physician contract review could reveal an unenforceable non-compete covenant, providing you professional freedom if you ever wish to leave. By addressing concerns related to work-life balance and negotiating necessary modifications, contract review promotes a healthier integration of personal and professional life.

What Are Essential Steps for Conducting Physician Contract Review?

Physician contract review involves a series of necessary steps to ensure a comprehensive evaluation of the terms and conditions outlined in an employment or partnership agreement. Following these steps will help to protect the interests of both you and the healthcare provider and promote a fair and transparent professional relationship. Here is a list of the essential steps that we suggest you consider when conducting a physician contract review:

Document Review: Carefully examine the entire contract to understand its scope, key provisions, and any potential legal or financial implications.

Compensation Analysis: Evaluate the compensation structure, including salary, bonuses, benefits, and incentives, comparing them to industry standards to ensure fairness.

Duties and Obligations: Assess the stated responsibilities, working hours, on-call duties, and any other obligations mentioned in the physician employment contract. Your duties should be stated with specificity.  If the contract terms are vague as to what you will be expected to do, revise the section inserting precisely what duties you will and will not agree to perform.  Be specific.

Non-Compete and Restrictive Covenants: Review any non-compete clauses or restrictions regarding the geographical area, timeframe or duration, and scope of activity that you will be prevented from doing if you leave.

Termination and Renewal: Review your contract’s termination provisions, notice periods, and conditions for renewal or non-renewal to understand the options available.  Make sure that you have an “exit ramp” in the contract, such as termination for “Good Reason,” if your employer does not uphold its end of the bargain.

Benefits and Insurance: Evaluate the healthcare coverage, malpractice insurance, retirement plans, and other benefits offered to ensure they meet your needs.  This article does not address the details, but your malpractice coverage is of grave importance to you.  Be very careful on this point.

Legal Consultation: Seek advice from an experienced healthcare attorney who can provide expertise and guidance throughout the contract review process.

Negotiation and Amendments: Engage in discussions with the employer to address any concerns or to negotiate modifications that align with your interests and priorities.

Final Review and Execution: Carefully review the revised contract and ensure that all agreed-upon changes are accurately reflected before signing the final document.

By following these essential steps, you can navigate the complexities of entering into a new contract, protect your rights, and establish a solid foundation for a successful professional journey.

Importance of Involving a Healthcare Attorney

The involvement of a physician contract lawyer during the contract review process is essential. As stated on American Academy of Family Physicians, an experienced attorney can guide you in evaluating the physician employment agreement and provide counsel as you prepare to negotiate with an employer. A lawyer’s expertise is critical in ensuring that all legal implications and potential pitfalls are thoroughly addressed. With in-depth understanding of healthcare laws and regulations, a healthcare attorney provides invaluable guidance and ensures that the contract aligns with legal requirements and safeguards the interests of the physician. A lawyer’s involvement helps mitigate risks, protect rights, and enhance the overall integrity of the contract, making the attorney’s presence indispensable in the review process.

It is important to approach physician contract review with a discerning eye and consult with an experienced lawyer to review, identify, and address any red flags that may arise in your physician employment agreement.

Red Flags to Watch out for in Physician Contracts

During physician contract review, there may be red flags indicating unfavorable consequences down the road. Here are some key red flags to be aware of:

Restrictive Clauses: Excessive or overly broad non-compete clauses that severely limit the physician’s ability to practice in a particular geographic area or within a specific timeframe can restrict professional opportunities and hinder career growth.

Compensation Discrepancies: Discrepancies between the contract’s compensation provisions and industry standards should raise concerns. If the offered compensation is significantly lower than what is customary for the specialty or region, it may indicate undervaluation or financial risk.

Excessive Call or Duty Obligations: Excessive on-call duties, weekend or holiday requirements, or burdensome work schedules can negatively impact work-life balance, leading to burnout and diminished quality of patient care.

Inadequate Termination Clauses: Look out for termination clauses that heavily favor the employer, allowing them to terminate the contract without cause or with insufficient notice. Unfavorable termination provisions can leave physicians vulnerable to sudden job loss or contract termination. As mentioned above, you need your own “exit ramp” in the event that you want to leave a bad situation such as our physician client that we described.

Hidden Costs or Obligations: Be wary of hidden costs or obligations, such as mandatory purchases from specific vendors or burdensome administrative requirements. These additional expenses or responsibilities can significantly impact financial stability and autonomy.

Limited Malpractice Insurance Coverage: Inadequate malpractice insurance coverage or clauses that place the burden of liability solely on physicians can expose them to significant financial risks in the event of a malpractice claim.  If you are not sure whether you have “tail” coverage or other necessary malpractice protection, definitely consult an attorney.

Non-Negotiable Clauses: Contracts that strictly prohibit any modifications or amendments can limit the physician’s ability to negotiate and protect their interests. Flexibility for reasonable negotiations is crucial for establishing a fair and mutually beneficial agreement.

By evaluating these aspects, physicians can gauge the effectiveness of their contract review, make necessary improvements, and secure agreements that are favorable and protective of their professional and financial well-being.

Navigating the Legal Aspects of Physician Contract Review

To the untrained eye, the complex legal aspects of physician contracts can be a tall task. With multiple clauses, intricate legal jargon, and possible pitfalls, consulting with a specialized physician contract attorney is essential to help with physician contract review. Health law experts possess extensive knowledge of healthcare law and can provide medical professionals with a comprehensive understanding of the terms, responsibilities, and potential risks involved in their contracts. Give us a call today if you want assistance with your physician contract review process.

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