Can a Resident Physician be Fired? | Terminated Residency

Can a resident physician be fired? The short answer is yes. They can. When a physician in residency enters a program, that program will have a code of conduct, policies, and procedures. They may make the residents sign an offer letter or letter of intent. Sometimes they’ll offer a very short employment contract. Not as complicated as what the physician will receive after they’re done with training and start their new job. 

Reasons For Letting Go Resident Physicians 

Once the physician enters the residency program, problems can arise. And in any walk of life, just because you are professional doesn’t mean you’re not going to have problems. Suppose a problem arises to the level that the program thinks they cannot fix, they can let the residents go. Remove them from the program, fire them, whatever you want to call it.

Substance abuse issues are the main reasons for someone’s removal from the program. If they’re allegedly impaired at work, that could easily be a reason to remove them from the program. Now, most programs will allow some period for rehabilitation. Maybe they can make them take a gap year or some time off to get their problems under control. Then extend the residency by that amount. However, if someone can’t get their problems under control, it’s a patient safety issue. The program can let them go. The same can be said for mental health issues, the same scenario. There may be time to allow them to get psychiatric care, medication, counseling, whatever. However, if it continues and becomes a problem, they can be let go of that.

Medical Residents Malpractice 

Clinical issue. Just because someone has gotten into med school, graduated, gone through their internship, and entered residency. It doesn’t mean they don’t have or at least potentially have some clinical skill problems. And so, if during training these same problems continue to arise, that can be grounds to let go of a physician who’s in residency. 

Two more things, boundary violations, meaning profess boundaries. I once had a client who had begun a romantic relationship with his patient while in residency. He was in mental health, and some issues popped up. He was reported to the medical board and booted from the residency program. So, the physician in residency needs to be aware of the boundaries. Then the last thing would be dishonesty. Dishonesty is tough for someone who represents physicians before the licensing board here in Arizona. Because it’s very difficult to show rehabilitation from dishonesty if that makes sense. 

If you have a drug or drinking problem, go to rehab, or AA, do the steps, and go to counseling. Clearly, they’re getting better. Mental health, same thing, psychiatric care, medication, counseling, you’re better. Clinical issues, maybe you’ve done some continuing education, some pace programs, whatever. They can improve their skill that way. But if somebody lies, just straight out lies, it’s hard to show anyway for them to improve by that. Maybe some continuing education and ethics. But beyond that, I find most medical boards are as if they drop the hammer without any ability to improve. That is if the physician in residency is proved to be a liar or continues to be dishonest about something.

Program Committee Remediation

Those are the main reasons someone would be let go, removed from residency, or fired. Two things usually happen. First, if the program believes the physician can be coached up, so to speak, or improved. They put them on a performance improvement plan, corrective action plan, something like that. And if the physician shows steady improvement, then there are no issues. Suppose they have gone through those remediation steps, the physician still hasn’t improved, and they’ve exhausted every possibility. In that case, they’ll go through a formal removal of the physician from the residency program. 

Generally, there’s a committee that must vote to remove the person. Then the resident would have an opportunity to address the committee. But it certainly can happen. I guess one more thing that could happen. Is an issue that requires a brief period away from the training program. They can just extend the residency for whatever amount they missed. And in that scenario, that’s great. A physician wants to get through residency as quickly as possible. However, if it is extended, no big deal. They could still get through it, find a new job, no harm. So, can medical residents be fired from their program? Yes, for several reasons.

Other Blogs of Interest

• Will I be Paid My Bonus if I Terminate the Physician Contract Early?
• Can Surgeons Moonlight?

How Much are Resident Physician Salaries?

One question med students have is the average salary for a resident physician. After physician graduates from medical school, they move on to an internship or residency within their specialty. Then get paid. But for most of them, it’s simply not even remotely enough for the work that they’re doing. So, it’s not uncommon for residents to work 70- or 80-hour weeks. The average salary for residents in the United States is around $63,000. Maybe you’re a resident right now, thinking, I don’t even make close to that, or maybe I make more. This is average across all specialties. Some specialties will make a little bit more than others.

Some could be as high as the 60s. Whereas maybe in family medicine, you could be about 50s. Can a resident negotiate their salary during training? No, they have no leverage. Anytime you’re negotiating a contract, you base it upon leverage. Even those residents coming out of training and moving on to their first employed job don’t have much leverage. They only have leverage in those situations if they’re in a needed specialty. Or two, if they’re willing to go to an under-served geographic area and need physicians.

So, around 63,000 is the medical resident salary. If you think of it this way, if they work 70 to 80 hours a week, they’re making about $15 hourly. And providing care as a doctor for $15 an hour. Now, once they move out of training, the salary increases substantially. And for some specialties could be an eight-fold increase, at least just coming out. But that’s what it is. One consideration we make when reviewing and negotiating the resident or fellow’s first contract. Most of them don’t have much money coming out of training. 

Importance of Relocation Assistance 

So, suppose the new employer is offering a signing bonus or relocation assistance. In that case, we want to ensure they’re getting a chunk of that before moving and starting the new job. Wherever, if they are moving from where they’re currently training. Simply most residents, especially if they have family, maybe the only breadwinner. At that point, they don’t have $10,000 to $15,000 if they’re making a cross-country move. So, we need to ensure that either the employers pay their moving costs directly to the moving company. Or they’re going to front the money before the physician needs to spend it on the move.

In that way, they don’t have to outlay a ton of cash. Because it certainly is expensive moving from one place to an entirely different one. Medical residents certainly are underpaid. Unfortunately, it’s part of the process they must go through to be fairly compensated for the services they provide. But it’s just tough when you’re making that little. And I think the average physician has about. I think 47% of physicians have student loans over $200,000. It could be a big burden.

What is Mediation in a Physician Contract? 

What is mediation in a physician employment contract? In nearly every physician contract, there will be a couple of things about what happens if there is a dispute. Everyone goes into a contract hoping it’s the most excellent relationship of all time. Unfortunately, this doesn’t always happen. And so, if there is a dispute or you think that one party thinks the other is in breach of contract or can’t meet in the middle.

What Law is Used?

Usually, the contract will state a couple of things. One, it will say what law is used. It should be the physician employment law of the state where you reside. I’ve seen a couple of larger corporate-owned physician groups that may have physicians in dozens of states. And they’re based in Florida. The contract will state that although the agreement is taking place in Texas, Florida law will hold. I mean, no one should agree with that. The laws of the state where you’re working should be the venue for any dispute.

 It may even expressly state that Maricopa County is the Phoenix area and surrounding cities here in Arizona. And so, it may say in the contract that any lawsuit brought must be filed in the superior court with Maricopa County. That’s not unreasonable as well. It can state if there is an issue, and that’s where it will be filed. Other contracts will say that there must be a dispute resolution process. So, instead of someone just going straight to court and filing a lawsuit, they’ll state there must be an accelerated dispute resolution. And in the legal field, dispute resolution is generally two things: mediation and arbitration.

Medical Malpractice Mediation

Mediation is non-binding arbitration. What that means is usually, a lawyer, maybe a retired judge will attempt to reach a compromise between both parties. However, if both parties are unhappy with the outcome or unwilling to compromise, nothing binding results from it. Usually, in a medical mediation, both parties will split the cost of the mediator. And as I said before, it’s a lawyer or retired judge. Then, usually, they’ll keep them in separate rooms. 

And the mediator will then go to one side and say, what’s your position on this? Then they’ll go to the next room and say, alright, what’s your job? And then will go back and forth saying, well, maybe you’re being unreasonable here. Maybe you might want to think about this. And they’re just trying to get both parties to meet in the middle and squash any beef they have. 

Next Step if Mediation Is Not Successful

But if it is an unsuccessful medical mediation, it can go one of two ways. It could either go to arbitration, which is essentially binding mediation. In arbitration, the same process, an attorney or retired judge will hear both sides of a case. In arbitration, they’ll render a binding decision. Both parties are bound by whatever the decision is. And it’s outside of the court system. I find almost every hospital network employee in an arbitration agreement within the employment agreement.

It will state any disputes arising from this agreement, sometimes accepting the restrictive covenants. So sometimes, the non-compete or non-solicit will have to go through the court system. It will be part of the arbitration agreement. But anyway, it’ll say, if there is a dispute, both parties must go to arbitration, and then it will state what kind of arbitration. It could be JAMS. It could be AHLA or the American Health Lawyers Association. Or it could be the arbitration system of whatever county where they are residing. 

How Arbitration Works

And so, arbitration works typically because both parties will agree on a neutral arbitrator. They’ll provide a statement to the arbitrator in advance and maybe submit documents if they’re necessary. The arbitrator will come in, and then the same process happens. They’ll meet with both sides and then render a decision. Generally, it’s a brief written decision of this is what’s going to happen. Now, if there isn’t medical mediation or arbitration, it simply goes to litigation. If the parties can’t reach an agreement, either party is free to sue them in whatever venue is specified in the contract. 

Downsides of Mediation

There is no downside to mediation. It is not binding. It’s because it’s considered a settlement. Whatever is stated within those settlement talks is confidential and can’t be used against either party. Suppose it does accelerate into arbitration or litigation. In that case, I find it’s a meaningful process to flush out what the actual cases are. Like what really is the bottom-line problem, and then having somebody skilled in mediating and trying to get both parties to compromise is a valuable process. 

Now, dealing with doctors daily, I understand there are some hard feelings at times. And some people say not. I don’t want to mediate; I want to bring out the big guns and go right into litigation. And that’s very prerogative. That’s fine. But I think the mediation process could be fair and helpful in many ways. So, that’s kind of what mediation is in a physician in an employment agreement.

Can You Moonlight in Residency?

Can residents moonlight during residency? The short answer is that it depends on the program and the signed residency contract. The assurance that most residents sign before starting into the residency program is not like an employment agreement that you will sign once you’re finished training and then get your first job offer. It’s usually much shorter and doesn’t cover the usual terms that an employment agreement will cover. 

However, there might be some language in that residency contract that states you cannot do outside activities without employer approval or program approval. 

What Are the Requirements Needed for Moonlighting?

If you have language in your contract that states you must get approval to do any outside employment, then that’s what you need to do. It would help if you had to get written authorization that says, yes, the program is okay with you doing this. And then you also consider several different things. 

One, your professional liability insurance is not specific to you. It’s particular to the employer. So, suppose you’re working in a residency program. In that case, any activities you do in that program are covered by that insurance policy. However, if you were to moonlight or work anywhere else, you would need a separate professional liability insurance policy that covers your activities for that new employer. 

One policy doesn’t cover you in whatever you do. It would be best if you had a specific procedure for each employer. Now, if you are moonlighting, whoever you’re moonlighting for will cover your professional liability insurance. And then you also need to consider whether, once you leave the moonlighting position, they will pay for your tail insurance if there’s a claims-made policy. I have several blogs about claims-made coverage and tail insurance.

Avenues for Moonlighting Based on Physician’s Position

I’m not going to get into it in this blog, but I would also take that into account. The specialty is also essential. You’ll usually have a lot if you  ‘re in a shift work type position like ED, hospitalist, or any IM position. You could do urgent care. There are a lot of different avenues for you to moonlight. Same with surgeons as well. But most programs are okay if the resident does moonlight. If one, they ask for permission. Two, they ensure professional liability insurance at that new position. Then three, they don’t want any moonlighting to interfere with the resident’s schedule or duties with the program.

When Should a Resident Receive a Signing Bonus?

When should a medical resident receive a signing bonus? The timing of it is essential. When medical residents finish training, they have likely already signed an employment contract. More importantly, when negotiating the contract, usually in their early PGY-3 year, some PGY-2. When they receive the signing bonus is crucial for a couple of factors. One, as physicians in residency, don’t make much money. Say they’re training in New York and get a job in California. Depending on their family size, it could be a substantial amount of money to move across the country.

Almost every employer someone signs with as a resident will offer relocation assistance. Usually, between $5,000 to $15,000. You won’t see above $15,000 as far as relocation assistance goes. Somewhere along there, they should pay for the entire amount, to be honest. And some people moving a short distance can also use the relocation assistance money for traveling back to the city. To look for an apartment or a home. So, airline lodging, all that kind of stuff. Some people could use that money for a security deposit or maybe the first couple of months’ rent. Most employers are flexible in what the physician can use that money for. But they want it to be housing-related or relocation-related in some manner.

Negotiate The Amount of Signing Bonuses

Now, the timing of when you get paid is important. Usually, the physician will receive different offer bonuses. One would be the relocation assistance, as I said before, somewhere between 5,000 to 15,000. And also, a signing bonus is usually paid out during their first pay period. Whenever they get paid first after they start with the employer, that’s when they would receive the bonus. There’s a different way of doing it. Often employers will say unless it’s a big hospital network that has established relationships with moving companies. Let’s say you’re running a private practice. They’ll say, pay your moving expenses, submit us the receipts, and then we’ll reimburse you. Well, for some people, outlying $10,000 to $15,000 to move is difficult. Simply because, as I said before, you’re not a wealthy doctor when you’re still in training. 

So, we assess the situation for the physician and determine is it helpful if you get this before moving. How soon before you complete training do you need the money? We can say to the employer, “Hey, look. It will help us defray the cost of the move if we receive this before moving.” Or, more importantly, maybe the employer would be willing to pay the amount directly to the moving company. In that way, the physician has no cash outlay, which is the entire point. The signing bonus also. The timing of when the employer pays it can be essential as well. Depending upon the size of the signing bonus, we could say, we would like half upon execution of the agreement.

Discuss Repayment Obligations 

So, when you sign the actual agreement, and both parties sign it, that’s called the execution of the contract. Many times, we could say, we’ll get half upon signing. And then the other half when they start. Both bonuses will have a repayment obligation tied to them. At least it usually would. Meaning, let’s say the physician has an initial two-year term. The employer states, you’ll owe us a prorated portion of the bonuses if you leave before the initial two-year term. It could be quarterly forgiveness, monthly forgiveness, or yearly forgiveness. Let’s say someone has a $30,000 signing bonus. They say, alright, half of it is forgiven after the first year. And the other half is forgiven after the second year. 

So, if the physician left between the first and second year, they owe back $15,000. So, the employer is insulated from the physician, simply taking the bonuses early. And then, splitting out on the job by signing the agreement in advance. There’ll be language in there that talks about the repayment obligations. If the employer is expressing concerns about that. Or maybe they just don’t utilize that. That would be a good way of saying, look, if you’re concerned about me, just take the money, and leave.

Then let’s put in these repayment obligations and therefore, you’re protected if I were to leave. And I benefit by getting the money in advance. So, that’s a discussion of when the physician in residency should receive the signing bonus or relocation assistance. It’s just dependent upon the situation for some people. It’s fine receiving it after the fact. But for others, it’s important to have it upfront—just some things to think about.