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KOMahonyLaw - Law Office of Kevin P. O'Mahony
Healthcare, Business
& Litigation Services

Healthcare & Physician Contracts

Retaining a healthcare or physician contract lawyer is one of the best investments a physician or other healthcare provider can make. The benefit of that investment can be maximized and the cost minimized by retaining an attorney or firm experienced handling healthcare and physician contract reviews and negotiations. Attorneys who work on healthcare contracts regularly understand the language, pay structures and terms that affect an individual provider’s professional and personal life.

Employers (for economic and other reasons) do not always put a physician’s or individual healthcare provider’s interests first when it comes to a contract’s details. Lower-than-average compensation and ambiguous terms are common, and without the assistance of an experienced healthcare contract attorney, the terms can be detrimental to a physician’s or individual provider’s career.

Hiring a healthcare contract attorney requires you to make an investment in your career. But that investment can save you thousands of dollars and countless headaches down the road. Whether it is through increased compensation, better work schedules or termination provisions should you need to end your contract, your healthcare contract attorney can help tailor the agreement to your needs.

At the Law Office of Kevin O’Mahony, we will analyze your contract, interpret and explain complicated clauses, address missing needs or unfair terms, and compare your offer to other physicians in your specialty using both internal data and data from physician compensation surveys. We also can negotiate the contract on your behalf.

During your consultations with us, we will discuss the issues found in your contract, how it compares with others we have seen, revisions we suggest, and concerns you may have. We will advise you on steps to take, and either negotiate on your behalf, or provide coaching on how to handle negotiations yourself.

We have years of experience negotiating with health systems and their legal teams; however, attorney negotiations are not mandatory. If you feel negotiations would be better received coming directly from you rather than an attorney, or you simply wish to avoid the added expense of paying a lawyer to negotiate on your behalf, we can provide tips to coach you through the process and help ensure things go smoothly.

The services we provide include reviewing and negotiating contracts, preparing contracts, helping employers and employees enforce contracts, advice on setting aside or voiding contracts, litigating contracts (in state or federal court), and litigating restrictive covenants (covenants not to compete, solicit patients or employees, etc.).

For interns, residents, fellows and those just entering the practice of medicine, it is particularly important to retain an experienced health and business law attorney to review and advise you on your physician employment agreement. Such an attorney can help you understand your contract, and explain any pitfalls and potentially problematic provisions, including clauses or paragraphs which might cause you unexpected liability in the future.  This will arm you with the information you need to negotiate from a position of strength to obtain a more favorable agreement.

We can meet with you to review your contract face-to-face, or review it with you by phone. We also can arrange to confer with you after normal business hours or on weekends, should your schedule require.

Because contracts and individual provider’s needs vary greatly, we normally work and bill for our time based on competitive hourly rates. And if you need a written analysis, amendment or addendum to your contract, or you want us to seek revisions on your behalf, we can do so at those hourly rates.

Although not an exhaustive list, physicians and individual healthcare providers should keep the following points in mind when evaluating an offer or negotiating a contract:

  • Health systems and institutional providers have experienced health and business law attorneys who advise and assist them with their contracts. You should as well.
  • Health systems, institutional providers and their counsel have presumably seen and been involved in many more contracts than you have.
  • There is no such thing as a “standard” healthcare contract or physician employment agreement.
  • Contracts vary in numerous ways (as do individual providers and their needs), and many (if not all) terms are negotiable.
  • Do not rely on your colleagues, non-healthcare lawyer acquaintances, or (especially) your future employer’s representatives, for “legal” advice.  Misinformation about legal issues (especially in the highly-regulated healthcare arena) is readily available, but can cost you dearly.  And just because a court may have decided a legal issue a certain way in one case does not mean a different court would not reach a different conclusion in another case.  Every set of facts, circumstances, contract and case is different.
  • Be sure the wording of your contract represents exactly the agreement you made.  If something is not specified in the written contract, or an oral agreement differs from the written contract, the language in the written contract will almost certainly govern in any future dispute.
  • A promise to make you a “partner” or “shareholder” in a practice or group after a certain period of time will not be enforceable unless all key terms are specified sufficiently for a court to enforce it.  (Price, timing, percentage of ownership, method of payment of buy-in, etc., are generally required.)  Similar to the purchase of a home or real estate,  unless all terms required for a binding contract are set forth in writing and agreed to by the parties, it will not be enforceable.
  • Obtain and review copies of every document referenced in the contract.  Such documents usually are considered part of the agreement.  They may include the practice or entity’s policies and procedures, the employee handbook, a code of conduct, sexual harassment policy, compliance agreements, etc.  Keep these documents in a file with a copy of your contract.
  • Ensure the contract is clear throughout that you are an employee and not an independent contractor, or be sure you understand all the ramifications of working as an independent contractor.  Employees generally receive more benefits and have more protections under the law than do independent contractors.  If you sign as an independent contractor, you may have more autonomy, but you will be assuming many expenses and liabilities that the employer ordinarily would be required to assume.
  • Carefully consider clauses that allow the employer to terminate the contract without cause on a 30, 60, 90 or even 180-day notice.  With such a clause in your agreement, you cannot assume you have a one or two-year agreement, even if the anticipated “term” of the agreement is stated to be one or two years.  Instead, you potentially have only a 30, 60, 90 or 180-day contract.  So consider whether you can find another job and relocate in 30, 60, 90 or 180 days, and what you might need to protect for that contingency and cushion the financial ramifications.
  • If there is a “for cause” termination provision in the contract, be sure to seek a right to “cure” provision.  This is a provision which requires the employer to provide you written notice of any alleged breach and allows you a certain period of time (usually anywhere from 10 to 30 days) to cure it.
  • Try to avoid assuming an obligation to pay the premium for tail coverage for professional liability or medical malpractice insurance, especially if the employer terminates the employment.  If you are unable to negotiate this away completely, try to: (1) reduce the percentage you agree to pay to 50%, or 25% for each year you are in the practice; and (2) insert a provision that if you maintain the same insurance company or obtain retroactive coverage, this will be substituted for tail coverage.
  • Do your “due diligence” before signing.  Ask to see billing and collections figures and income statements.  Talk to other employees or associates.  If your compensation will be based on productivity, speak with another physician who is similarly compensated about how his or her compensation is calculated.
  • Visit any hospital or other facility where you will have privileges or see patients.  Contact any physicians or other providers you know or have met who live in the area or surrounding areas. Discuss the quality of the equipment and staff with other physicians and providers in the area.  They may be able to provide you information regarding your potential employer, hospital or city that may affect your decision.
  • Be sure every blank in the contract is completed and filled in before you sign.
  • Be sure every exhibit, schedule or addendum referenced in the contract is attached, and you have read and understand them, before you sign.
  • If you sign the agreement, be prepared to honor it.  Do not sign an agreement thinking that there may be certain provisions that won’t be enforceable or that you won’t be required to follow in the event you do not fully comply with them.  Assume that every part of the contract is enforceable.
  • Provided they are drafted correctly, restrictive covenants (covenants not to compete, solicit patients or employees) are generally enforceable in Georgia.  Although there sometimes are exceptions and defenses that may be used to potentially prevent, defeat or minimize enforcement of a restrictive covenant, unless you have sufficient money set aside to finance a lawsuit, expect to honor it if it is in the agreement.  As an employee or independent contractor, your negotiating strategy should be to: (1) try to get the covenant removed completely; or (2) reduce the period of time, geographic area, and scope of services or activities covered to the extent possible.
  • Do not start working until you have a copy of the fully-executed contract.  A draft is not sufficient.  A copy signed by you but not the employer is insufficient.  One of the most common problems we see when there is a dispute over a physician employment agreement is the employee does not have a copy of the contract that is signed and dated by the employer.

Please contact us if you have questions about your next contract. We are a healthcare and business law firm with extensive experience negotiating, drafting and litigating numerous healthcare and physician contracts. We hope to have the opportunity to assist you soon.

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