Is an adjunct professor considered self-employed? In short, in most situations, the answer to that is no.
If you are an adjunct professor, you’re likely going to be classified as an employee, which means you’re going to receive a W2 at the end of the year, and any taxes throughout the year will be withheld from whatever your ultimate compensation ends up being.
If an Adjunct Professor Is Working as an Independent Contractor
If you are a 1099, that means you are classified as an independent contractor, you’ll get a 1099 at the end of the year, and then no taxes will be withheld. You will be responsible for paying those taxes either quarterly or at the end of the year.
There is an IRS 20-factor test that kind of determines whether someone is an independent contractor or an employee, and in the academic arena, it just doesn’t make a lot of sense to have an adjunct professor classified as an independent contractor.
So, a few of those factors would be, does the adjunct professor have control over how often they teach, when they teach, and when the classes would be? Is the school providing the classroom and supplies and scheduling and administrative support? And in almost every scenario, the answer to that is yes, the academic organization is going to provide all of that. And so, it’s very unlikely that an adjunct professor would be classified as an independent contractor.
If an Adjunct Professor Job is more than Teaching
Now, let’s say an adjunct professor maybe is working part-time, doing some counseling, tutoring, or something like that.
Well, in that scenario, it probably would make sense to be an independent contractor. And then you could always create an LLC, get an EIN from the IRS, create a bank account, and then you could use that to deduct a lot of the expenses associated with being a professor.
Or as I said before, a tutor or counselor, whatever you want to call yourself. But if you’re working for an academic facility, it’s very unlikely you are considered self-employed or a 1099 independent contractor.
Questions about Adjunct Professor Jobs or Adjunct Faculty in-depth Contract Review
Now, if you have an appointment letter, employment agreement, or independent contractor agreement that you’d like reviewed, you can always contact my law firm.
https://www.chellelaw.com/wp-content/uploads/2020/01/cropped-favicon-1-300x300.png00adminhttps://www.chellelaw.com/wp-content/uploads/2020/01/cropped-favicon-1-300x300.pngadmin2022-06-11 18:01:572022-06-27 15:44:44In Teaching, Is an Adjunct Professor Considered Self Employed?
Is a two-year noncompete too long for a veterinary associate? If you are an employee, you will have signed an employment contract agreement. And in that employment contract agreement, it’s going to contain restrictive covenants. And restrictive covenants are just things that you can’t do either during or after the contract is terminated. Common restrictive covenants in veterinary practice employment contract would include a non-disparagement clause, a non-solicitation agreement, confidentiality provisions, and then a non-compete. A noncompete essentially prohibits the vet from working within their specialty for a period within a certain geographic radius of where they work. In the contract agreement, let’s just say your general vet, it’ll say the vet can’t practice as a general veterinarian for one year within 15 miles of their primary practice location.
What the Veterinarian Employee Noncompete Agreements Says
Let’s kind of talk about some of the sneaky things that the employer tries to do in a noncompete. First, vets can do multiple things. They can do emergency medicine, they could do urgent care, and they could do general vet issues. You want to make sure that the specialty written into the contracts is just what you’re doing for that employer. If you’re doing emergency medicine, you don’t want to be prohibited from being a general vet after the contract terminates. You want as many options as possible when the contract ends, so you don’t have to move. Prohibiting things that you didn’t even do for that employer doesn’t make a lot of sense to me. So, you want to make certain that it doesn’t say you can’t do any kind of veterinary medicine. It needs to be specific to what you were doing for that employer.
Now, for some specialists, if you’re a radiologist or something like that, there’s going to be no way around that. But it needs to state what you’re specifically doing for that employer, nothing more. As far as time, usually, most non-competes for vets are going to be somewhere between one to two years. If you have a non-compete that’s three years or five years, that is, one, probably not enforceable, and then two, completely unreasonable as well. Somewhere between one to two years is the ideal range. Obviously, one year would be better than two.
But it’s not uncommon to see both of those lengths in the contract. So, is two years too long for a non-compete? Ideally, as I said before, you would want one, but two years, I think could be considered reasonable in some states.
Geographic Location where you can get employment for Veterinary Practice
Now, let’s talk about the geographic restriction. Maybe if you’re working in two locations for who knows, 5 to 15 miles, somewhere like that, is probably a decent range. Now, as these corporate-owned veterinary practices continue to gobble up all these veterinarian-owned animal care practices, you need to make certain that the geographic restriction only attaches to the places that you are working. Let’s say you’re in a big city and a corporate-owned vet practice owns 10 clinics in that city, well, if you have a 10-mile non-compete from 10 clinics, that could essentially knock you out of a city and you’d be forced to move.
Whereas if it was just 10 miles from where you worked, it would be more reasonable. It might be annoying to have to go outside of that radius for however long non-compete lasts. However, you’ll at least have other opportunities. So, you need to make certain, if you are with a big corporate-owned practice, that the non-compete only applies to the places that you are working or your primary practice locations, no more than two. It should be one or two at the most. There are some contracts that don’t just do a radius. They’ll also do like counties. You can’t work in this county or any contiguous counties. Any counties that touch your county would be unreasonable. Now, it’s going to depend upon the setting as well. If you’re in an urban environment in a big city, 10 miles could knock out hundreds of opportunities.
Whereas if you’re in a rural community, there may be no other opportunities within 10 miles of the clinic that you work at. So, that must be considered. The larger the city, the more opportunities, and the smaller the radius, would be considered more reasonable. Why does it matter to most people? Well, let’s say you grew up in a town, you have kids that go to school there, you have family in town, and you have deep ties to a community, the last thing that you would want if the contract is terminated is for you to have to move, or maybe it’s just impossible, there’s no chance that I can move if the contract terminates, well, it’s very important to focus on the geographic limitation and how many places it attaches to in that scenario. And then also, how long it is as well.
Negotiation with the Employer about Non-Compete in the Agreement
As I said before, you want to aim for one year and not two. That way, you have the shortest amount of time to be inconvenienced if you must work outside of whatever the restriction is for that one-year period. Now, how do you negotiate employee noncompete agreements? Well, you just must ask for what you want. If they come at you and say, it’s two years and 50 miles from your primary practice location, that’s likely unenforceable, certainly unreasonable. So, you need to come back and say, look, I want a one-year non-compete with a 10-mile restriction from the two places where I generate most of my charges or something like that. Now, some of these big corporate over vet practices are going to say, oh, I’m sorry, we can’t change the non-compete. Well, they can change it, they just don’t want to.
So, you’re going to have to make the decision if they do say take it or leave it, whether you take it or leave it or not. For some people, it’s the absolute most important thing when we negotiate contracts. For others, it doesn’t matter at all. Maybe they move to the community for a job, but they do not have any plans of staying there if the job ends, then you want to focus your attention when you’re negotiating on more important things to you, and you wouldn’t even mention the non-compete. It really depends upon the vet where they’re at in their life, whether they have ties to the community, to determine how much capital you want to put into negotiating the terms of the non-compete. There are states where non-competes are completely unenforceable for providers.
There’s only a handful of them. So, it’s very likely you’re in a state where non-competes are enforceable. I don’t know why, but I get comments all the time that, hey, I talked to a colleague, and they said non-competes are completely unenforceable everywhere. And for vets, that’s just not true. They are, in most states, if they’re reasonable. Whether something is reasonable or not, probably varies upon who’s viewing it. But I would consider never signing a contract agreement, just expecting something not to be enforceable, and always try to negotiate terms that are better for you. So, that’s a little breakdown of how long a non-compete should be and kind of what’s reasonable.
Can veterinarians or a veterinary associate, employed in animal care practice, break their employment contract? And the short answer is yes, they can. However, if this means that veterinarians or the employee, in general, are breaching the employment contract and not adhering to the terms of the employment contract, then they would likely open themselves up to liability which includes litigation costs and arbitration as set in the employment agreement. The employer can ask for damages that might include recruitment costs for new veterinarians for the practice, they may ask for administrative fees, credentialing fees, and the list kind of goes on from there because of the resources they spent to find a new employee. So, it’s never a good idea for veterinarians employed in a veterinary practice to break employee agreements. We never advise our veterinarians or a veterinary associate to breach their employment contracts. The best way to break or terminate the contract is by doing it exactly how it’s outlined in the contract agreement. Typically, there is a clause that’s called a termination clause and there are normally three ways to terminate a contract agreement.
The first way is that both parties, the employer and employee, mutually agree to terminate the contract and go their separate ways. However, this is kind of rare and we don’t see it happen a lot. The second way is for-cause termination. And this is typically weighted more towards the employer. The employer can terminate the veterinary employment contract without notice if any egregious acts happen, and typically, they are listed on the veterinary employment agreements themselves. This might be violating a law or being convicted of a felony and losing your license to practice animal care. And again, the list just goes on from there. Then the last way to terminate a contract would be for no cause and a no-cause termination is typically outlined in the employment agreement and you just must give the other party 60 to 90 days’ notice, and then the contract is terminated and then you can go your separate ways.
The veterinarian’s employment contract also typically outlines how veterinarians or a veterinary associate will give that proper notice. It normally has an address, and you would either mail in a letter, hand-deliver it and in some rare instances, you’re allowed to email it. We also like to encourage our clients to give notice in multiple ways, as long as the law allows for it. That is the proper way to save the employee from liability is to properly terminate a contract, so both parties can save on resources by avoiding litigation as permitted by the law. But when you’re deciding to do this or break the veterinary employment agreements, you also want to keep in mind, are there any repercussions? Meaning, do you have to pay back any signing bonuses, or any relocation expenses so you are near the job site? Typically, those have a payback provision or a forgiveness period. And if you are to break or terminate the veterinary contract within that time, you must repay those. So, that is something you want to look at in your veterinary contract, and keep that in mind whenever you’re deciding to break or terminate the veterinary contract agreements.
And then lastly, most veterinary employment agreements have a provision with restrictive covenants. Restrictive covenants include your non-compete clauses and non-solicit clause to clients and employees in the practice of animal care. In the non-compete clauses, you want to make sure that you’re not practicing animal care within the restricted area of practice during your restricted time as determined by the noncompete clauses in your veterinary employment agreement. Typically, you’re not allowed to solicit clients, which means veterinarians leaving the job can’t ask clients or entice them to come with the veterinarian to a new job location, and the same for employees at your clinic or practice. In summary, you never want to breach a contract. If you would like out of it, you need to terminate it properly and give proper notice to your employer. And then you also need to remember, are there any repercussions to look for? Sort of anything you’ll need to pay back like signing bonuses, or relocation bonuses, and then look at those restrictive covenants to make sure you’re not in violation of any of them.
What is a Non-Compete Agreement?
The Treasury Department defines a non-compete agreement in the following way:
Non-compete agreements are contracts between workers and firms that delay employees’ ability to work for competing firms. Employers use these agreements for a variety of reasons: they can protect trade secrets, reduce labor turnover, impose costs on competing firms, and improve employer leverage in future negotiations with workers.
Employers gain a lot of upside value from requiring their employees to sign non-compete forms before they begin working there. This can help them lock down workers who might have jumped from job to job for other opportunities. The practice is so widespread in the animal care industry that it generally works in favor of all animal healthcare industry participants equally. They are all rushing to secure their veterinary practice workforces, such as veterinarians or a veterinary associate. Non-compete agreements help make sure that at least some of the veterinary practice workforce is locked in place where they are so there isn’t so much shuffling veterinarians around all the time. Non-competes are many times, justified by the employer in return for the professional benefits offered.
Lawyer Review of a Non-Compete Agreement
Veterinary practice noncompete clauses can be rather complex for the employee, and they are certainly relevant to your work life moving forward. Some people prefer to take their veterinary practice agreements to a lawyer to have them review said veterinary agreement before they sign on the dotted line. Doing so will likely give the signer some peace of mind, and it will certainly make it less intimidating to try to figure out if the documents that you just signed are in your best interest or not. Beyond the non-compete clauses, veterinarians also must determine what their malpractice insurance responsibilities are if the veterinarian’s contract is terminated. What type of professional liability policy did you have?
If you would like more information about employee noncompete agreement, how they operate, the law that covers noncompetes, and what you should do if a company gives you an offer and you are asked to sign one, please contact us today! We will be more than happy to discuss the content of clauses of the agreements veterinary practice, average job wage, a different approach in negotiating the veterinarian’s contracts clauses, and other resources.
https://www.chellelaw.com/wp-content/uploads/2020/01/cropped-favicon-1-300x300.png00adminhttps://www.chellelaw.com/wp-content/uploads/2020/01/cropped-favicon-1-300x300.pngadmin2022-05-31 16:51:052022-06-27 16:04:34Is a 2-Year Non compete for Veterinarians Too Long in a Veterinary Practice?
Is 10 miles a reasonable non-compete for a dentist? If you are an employee and you have an employment contract, it’s very likely that that contract is going to include restrictive covenants. Restrictive covenants are things that the dentist can’t do either during or after the contract is terminated. Some common restrictive covenants would include a non-disparagement clause, a non-solicitation agreement, confidentiality provisions, and then a non-compete, which is usually the most important to most dentists. A non-compete simply says a dentist can’t work within their specialty for a certain period, within a geographic radius of wherever they’re working.
Non Compete in Contract Agreement for Dental Practice
Let’s kind of break that down. The non-compete will list the dentist can’t practice as a dentist, or maybe they’re subspecialists in their subspecialty for a period.
A normal period is going to be somewhere between one to two years. Ideally, it would be lower. Meaning, on the low end, it should be no more than a year. If you see a non-compete that’s three years, five years, one, it’s probably unenforceable, and two, it’s completely unreasonable. You should not accept that. No more than one to two years for the temporary restriction of any kind of non-compete.
Geographic Restrictions in Non Compete Agreements with Dentists
Now, as far as the geographic restriction, this depends. Most non-competes are going to be somewhere between 5 to 15 miles from your primary practice location. The setting is important. If you’re in an urban environment and a big city, a smaller radius would make sense. Whereas if you’re in a rural community, you may not have any other opportunities within 25 miles. Let’s just take Phoenix, for example, where I live. Maricopa county is very big, but if it was 15 miles in the middle of Phoenix, it could knock out hundreds of opportunities wherein if you’re in rural Idaho, 15 miles could just be that location and nothing else.
So, the setting is certainly important. One thing you want to think about, especially with kind of the current trend of all the dentist-owned practices being gobbled up by all these corporate-owned practices, is if you are in a city, you need to make certain that the non-compete doesn’t state, let’s just say it’s a 10-mile geographic restriction, that it applies to your practice location or locations. Maybe if you’re at one or two of them and not every location that the practice owns. I’ve seen very recently some of the corporate-owned practices that own 10 to 15 locations in a city, will say it’s 10 miles from every location that they own when the dentist only worked in one location. And that is not fair, that is not reasonable. Is that enforceable? I don’t know, I mean, you may have to litigate or go through arbitration to find out the answer to that, but that’s not something that you want to accept in an employment contract. That kind of non-compete could essentially force you to move from a community.
And for some people, that’s huge. If you’re from a town, kids go to school there, have family nearby, and have some deep ties to a community, some people just absolutely cannot move when the contract ends. And if they have a very onerous non-compete, it’s going to be tough for that dentist to work for however long the non-compete is. So, if it’s 10 miles from one location, I would consider that a reasonable non-compete. If it’s 10 miles from 10 locations, that certainly is not.
The Secret to Contract Negotiation for New Employment of a Dentist
Now, how do you negotiate a non-compete? Well, simple. You’re just going to have to say, I would like a one-year non-compete and I would like the geographic restriction to only be attached to maybe the two locations where I generate most of my charges if you’re working in multiple locations. Now, if the employer says, no, we’re not willing to change it, many of them will say, oh, well, I’m sorry, we can’t change it, which is obviously not true.
They can certainly change it; they just don’t want to. But there is going to be a point where the dental associate is going to have to make a decision of, alright, well, can I accept this, or should I move on to a different job opportunity? It’s going to depend upon your specific scenario, but non-competes can be a deal-breaker when we’re negotiating with an employer, and just to be honest, some of these corporate-owned practices will simply say, it’s a take it or leave it to offer.
Now, you can find opportunities out there that couldn’t meet your needs. I find smaller dentist-owned practices are certainly much more flexible as far as the non-compete goes versus the corporate-owned practices.
So, you may have kind of better luck negotiating in that type of environment, but ultimately, it’s just going to depend upon whether it’s important to you or not. Some people, they’ll move to a community for a job. They have absolutely no plans to stay and they say, alright, after this job ends, I’m moving on somewhere else. And in that scenario, you could focus your negotiation on different things. There must be a list of what’s important to you when you’re negotiating a contract, right? And so, if a non-compete is the most important thing, you really must focus on that. Whereas if the non-compete doesn’t matter to you at all, it’s not even worth bringing up. Anyway, that’s kind of a little primary on what’s a reasonable non-compete for a dentist.
Dental associate contract agreements red flags. There are obviously dozens of red flags in a dentist’s contract agreements. However, there is a handful that is necessary to take a solid look at and we’ll kind of go over those. The first thing would be no without cause termination. In any dental associate employment contract agreement, there’s going to be a section called term, which just means how long the contract is, and then termination, how the contract can be terminated. Contracts can be terminated in several ways. The term could just end, and it’s not renewed, it could be terminated by mutual agreement, it could be terminated for cause. If one of the parties breaches the contract but doesn’t fix the breach, the other party generally has the option to immediately terminate the contract. And then the last and most important way is without cause termination.
This just simply means that either party can terminate the agreement at any time with a certain amount of notice to the other. Normally, somewhere between 30 to 90 days. The reason why this is important, and I find this especially important for dental associates for whatever reason. Without the ability to terminate the contract agreements at any time, let’s just say the dental associate has two-year contract agreements and they cannot terminate without cause, you’re essentially stuck there for two years unless the other party breaches the contract.
Employment Red Flags: Net Collections and Long Notice Period
There are plenty of scenarios where if a dentist associate is on net collections, volume, compensation, the owner will generally, I’d say, overestimate what the associate will make. And so, they can get into a job if they’re not paid a daily rate or a salary, it’s more of just eat what you kill and get a percentage of whatever is collected and the volume simply isn’t there and you’re not making nearly as much as you expected.
You still would have to play out the rest of those two years. And that is a situation no one wants to be in. So, first thing, absolutely makes certain there’s without cause termination at any time. Sometimes, the employer will try to say, you can’t give notice in the first year or you can’t give notice in the first six months or whatever. No, anytime, if you start, you give notice, you do your, whatever the notice period is, move on. Absolutely necessary. Two, compensation. If you are a dentist and you are being paid on either net collections, encounters, some kind of volume metric and you are not 100% certain that the volume is there for you, you need to be very careful about taking that job.
Dental Associate/Contractor Compensation
A daily rate or a base salary, especially in the first year or two insulates the dental associate from just getting completely screwed by an employer that is, I guess, unwilling to make income guarantee and then is bringing in a dentist, but in that circumstance, only pay them based upon a volume metric. Just like in the example I just gave, if a dentist starts and their compensation is based purely on production and the production is completely out of their hands, they’re not doing the marketing, it is on the employer to drive the business, it’s a problem. What amount draw they receive should also be a consideration.
So, for anyone who’s new, maybe just out of training or you’re relatively new, it’s important to have guaranteed salary or daily rate. And then once you’re there and maybe you’ve been there a year or two, and you see that the volume is there, maybe potentially you can make more under collections model, well then, talk to the owner about switching. But at the very beginning, I find most places that try to lure dental associates in with big numbers. It almost never shakes out that way. Another big red flag is the non-compete. This is one thing that varies from state to state. Each state kind of has its own view on what’s a reasonable non-compete.
Dental Employment Contract and Non-Competes
Non-competes are enforceable, and almost every state, California, New Mexico, and Massachusetts are three of the few states where they’re completely unenforceable.
But for most states, it must be a reasonable length, usually about 12 months, sometimes they’ll try to do two years and then some kind of reasonable geographic restrictions. Usually somewhere between 5 to 15 miles. If you have a five-year, 50-mile non-compete, that’s crazy! You don’t want to sign something like that. You want it to be no more than a year, and then no more than, I would prefer 10 miles from your primary practice location. Many of these big corporate dental offices have multiple locations in the area and will state it’s 10 miles or whatever the geographic restriction is from every place they own even if the dental associate didn’t provide care or work in that location. No, you can’t agree with that. It needs to state that it will only apply to the locations where the dentist provided care and even then, try to limit it to no more than two locations. In big cities, obviously, corporate dental conglomerates continue to gobble up some of the dentist owned practices.
And so, if someone is 10 locations in a city and it’s 10 miles from 10 locations, you’re going to be knocked out of your city. So, what’s in the non-compete is certainly important. And then last and I’ll just touch on this briefly, the benefits. If a dental associate is an employee, the employer should pay for your license, DEA registration, and continuing education. If you’re moving from out of state, reasonable moving expenses, and reimbursement are normal things that an employer should pay for. So, think about that as well.
Additional Information
How to Negotiate a Dental Associate Contract? I will give some tips and tricks on how to get a better contract. First, there is a difference between negotiating a contract with somebody just coming out of training versus someone who’s been established in a community for a while. You simply have more leverage if you are in any community and either your practice is being brought out by a corporate practice or another group wants you to join them, and you have an established patient base. Let’s first talk about those coming out of training. What do you need to do to put yourself in the best position to negotiate a contract? Well, you need to know what’s important.
For most dentists, the most important things are obviously compensation, is it a base salary? Is it a daily rate? Is it net collection? How do you terminate the contract? Are you able to get out of it with a certain amount of notice or the benefits, do they pay for your license, DEA registration, credentialing, any kind of continuing education, and then are there signing bonuses, and relocation assistance? Do you have to pay them back if you leave within a certain amount of time? And then probably the two highest priorities are who pays for malpractice insurance, who must pay for tail insurance after the contract terminates, if it’s claims made policy, and then lastly, the non-compete. For some people, this is the absolute, most important thing in the contract. If they’re tied to a community, kids in school, family, they absolutely can’t leave, then you need a reasonable non-compete that’s not going to make you must move completely out of the area.
Alright, those are the things that are most important to most dental associates. Now, you’re coming on training, you have a job offer, they’re giving you a certain amount. How do you know what’s reasonable and what’s not? Well, the best place to find out that information is to talk to your classmates. What are the offers they’re getting? How much are they getting? How are they structured? Where is the job offers coming from? That’s the best and most, I would say, accurate means of finding out what the going rate is at that time. The compensation is going to vary wildly. As I said before, is it a base salary? Is at a daily rate. Is there some kind of net collection involved? Is it a hybrid? Could it be half base, half net collections?
Many times, compensation for a job may look great, but then the benefits are bad or they’re not paying for your tail insurance or the non-compete is terrible. So, you can’t just take compensation as the number one factor in determining what is a good opportunity, but it certainly is important. Knowing whether a non-compete is fair or not is something you probably must talk to a professional about. For the most part, anywhere between one to two years, and then maybe 5 to 15 miles from your primary practice location would be considered reasonable. If you’re in a non-compete that’s more than two years or it knocks out like multiple counties or maybe they’ve attached the non-compete radius to, let’s say, it’s a corporate practice in a big city and they have 10 locations.
And they’re saying, well, you can’t work within 10 miles of every location we own. That’s not a reasonable non-compete. The actual negotiation will depend on two things. One, do they give you an offer letter, or do they just give you the employment agreement? If they give you an offer letter, they’re going to expect that those terms are going to be negotiated in advance and then incorporated into the employment agreement. And then, they’re going to give you the employment agreement. I find sometimes it’s difficult to come to terms with the main parts of an offer letter without seeing the full employment agreement. I mean, if I had a perfect scenario, there would be no offer letter. They would just give the employment agreement. Then you’d have kind of a full understanding of what the job entails and what the expectations are for both parties.
You could agree to a salary, you could agree to the length of the term, that there is a non-compete, that the things they’ll pay for, but when you see the specific language in the contract, it could greatly change the way you look at the value of the contract. Just because you’ve signed an offer letter doesn’t mean that you can’t renegotiate those terms if you provide proper context to the employer. Alright, I was okay with making $110,000 a year and base salary, not knowing that the non-compete effectively knocks me out of the entire state. If you want me to sign this contract with that non-compete, then I need 130,000 or something like that. There are many ways of going back and forth. Some employers will just simply say, this is a take-it or leave-it. I would be wary of signing a contract with an organization that’s unwilling to make any changes at all in the contract.
It usually means they’re difficult to work with down the road or a very rigid and kind of unprofessional environment. So, if you find that someone just says, take it or leave it, I would leave it and move on and try to find a better opportunity. I’m just telling you, if they take the mindset that they’re not going to change anything in the contract, like nothing at all, no change at signing bonus, relocation assistance, benefits, anything like that, it is a bad sign moving forward. And then one more thing to think about and absolutely should be top of mind when you’re signing a contract or negotiating the terms of an agreement: every employment contract should have what’s called without cause termination. Either party should have the ability to terminate the agreement at any time with a certain amount of notice to the other party.
Usually, somewhere between 30 to 90 days. If your contract does not have without cause termination, meaning, you must fulfill the entire initial term of the agreement somewhere between one to three years, normally, it is an enormous red flag. You absolutely should not sign that contract for this reason. If they have excluded without cause termination, which is essentially standard across all healthcare professions, it usually means they’ve had a ton of turnover or they’ve had some very dissatisfied dentists that have wanted to leave. So, they’ve removed that ability and made sure that they must stay there for a three-year period or a two-year period or whatever. If it’s not in the contract, that’s why it’s normally not in there because they’ve had a ton of turnover and the turnover is normally due to bad management. It’s either it’s a toxic work environment, or the compensation is not worth the amount of time or effort you’ve, you’ve had to put into it.
The Need for No-Cause Termination Agreements
Absolutely makes sense there’s always without cause termination and the employment agreement. Don’t feel bad about asking for things. If you’re negotiating the terms of employment, most smart employers expect there’s going to be some back and forth. Ask for a little more salary, a little more bonus, and a little less non-compete radius. Like incremental things that you can get changed in the agreement can make kind of a big change in the value of an opportunity. So, don’t feel bad. Now, obviously, if they’re offering a hundred and you ask for 300 or some crazy amount, they’re going to just think that you have no idea what’s going on. They’ll probably move on. When you ask for something, it needs to be reasonable. How do you find out what’s reasonable or not? Once again, talk to your classmates, talk to any mentors, talk to attorneys who understand what they’re doing, and deal with these contracts every day. That’s where you need to get in. But if you go in and ask for these ridiculous changes to an agreement, most places will either just pull the offer just to say, no, we’re not doing any of that. So, that’s how you negotiate a dental associate contract.
https://www.chellelaw.com/wp-content/uploads/2022/06/is-10-miles-a-reasonable-non-com.jpg7201280adminhttps://www.chellelaw.com/wp-content/uploads/2020/01/cropped-favicon-1-300x300.pngadmin2022-05-31 16:48:052022-06-27 16:13:36In a Dental Practice, is 10 Miles a Reasonable Non Compete for a Dentist?
How does tail insurance work? If you are a high-level healthcare professional like physicians, NPs, PAs, and dentists, you will need medical malpractice insurance while you’re practicing. And then depending upon what type of coverage you have; you may need tail insurance. I’m just going to break down the common types of malpractice insurance, and then when tail insurance is necessary and the details of when it needs to be paid, how long it needs to be paid, how much it costs, that type of thing. The two most common malpractice insurance types in private practice are either an occurrence-based policy or a claims-made policy.
When Do You Need Tail Insurance?
An occurrence-based policy simply means a policy must be in effect when the malpractice incident occurs. And in that scenario, tail insurance is not necessary.
Under a claims-made policy, a policy must be in effect when the claim is made. It’s possible if a provider leaves an employer, there’s going to be a gap between their last day at work and then the last day somebody can sue them, and it’s called the statute of limitations. For most states, it’s two years. There are some exceptions, but in general, two years is a good rule of thumb in this situation. Let’s just say for this case, it’s two years. So, if you leave the employer, then there’s going to be a two-year gap where someone can still sue you for the things you did for that employer. And so, in that scenario, you need a policy that covers that gap, and that’s known as tail insurance in the industry.
If you have a claims-made policy, you need tail insurance, if you have an occurrence-based policy you don’t.
Who Should Purchase Tail Coverage?
If you do have a claims-made policy, the employment contract is going to dictate, one, who pays the underlying premium. Ninety-nine out of a hundred times, that’s going to be the employer, if you’re an actual employee and not an independent contractor. And then the employment agreement is also going to cover who pays for tail insurance. Now, this can vary greatly from contract to contract. If you are working for a private physician-owned practice, I would say, more likely than not that the provider is going to be responsible to pay for tail insurance. It’s rare that a physician-owned practice would pay for tail insurance. I’d say maybe 75% versus 25%. So, 75% must pay for their own tail. In the contract, it’s going to state, alright, the physician is responsible to pay tail insurance. Let’s kind of break down the details of that.
The tail policy will need to be in place prior to the end of the employment relationship. So, let’s just say the physician gave notice, and there’s a 60-day without cause termination. They’re going to have to get that policy secured before the end of that 60-day period when they leave.
Average Tail Coverage Cost
Tail insurance generally costs about twice what your annual premium is. This varies based upon specialty. So, if maybe your primary care, it could be around 5,000 to 6,000. Whereas if you’re an OB-GYN, it could be 40,000 or 50,000 a year. A good rule of thumb is twice what the annual premium is, is what you’re going to have to pay for tail insurance. It’s a one-time cost.
You’re not going to have to pay it every year, but you will have to pay all the money upfront to purchase the tail prior to the end of the employment relationship.
How Long is the Duration of a Tail Insurance?
Now, how long does tail insurance last? Well, it depends on what type of policy you bought. You can buy a one-year tail, a two-year tail, a five-year tail, and an unlimited tail.
In my opinion, it seems shortsighted to purchase a short tail. Why would people do that? Well, it’s just a cost. Now, I said two times is kind of the average, but it can usually range anywhere from 1.5 times all the way up to 3 times what the annual premium is based upon how long the tail is. And then also, how long you’ve been with the employer and that type of thing.
Determining how long you should get should be easy. It should be an unlimited tail; it should go on forever. You don’t want to have a scenario where you are not covered at the time that a claim is made. And that could be financially crippling for a physician or any kind of healthcare provider if they’re ultimately found guilty or they must reach a settlement.
Add Tail Coverage to Negotiations With Your New Employer
Now, you can negotiate who pays for tail insurance coverage in the employment agreement. If you go to the employer and say, hey, I’d like you to purchase my tail, they may say, no.
One strategy we’ve been successful with is asking the employer to then forgive a portion of the tail cost based upon how long the provider has been with the employer. For instance, let’s say the physician has a three-year initial term, and they complete the three years negotiating with the employer is one way of getting out of having to pay for tail insurance.
Another would be if your new employer pays for your old tail, that’s called nose insurance. Or this isn’t going to work if you’re employed in the hospital network, but if you are with a private-owned practice, and then you leave for another private-owned practice within that state, and then they use the same insurance carrier, generally, the insurance carrier will just roll over your old policy into your new one, and then you won’t have to purchase tail insurance.
Now, there’s no way you’re going to know, okay, in my next job when I leave this one, whether they have the same insurance or not, but that’s another way of getting out of having to pay for tail insurance coverage.
So, that’s how tail insurance works. It just covers the gap between when you leave an employer, and then the last day somebody can sue you, it’s around twice what the annual premium is, and then you can negotiate who ultimately is responsible for covering the expenses associated with it.
What are the Types of Medical Malpractice Insurance?
What are the different types of medical malpractice insurance coverage? This is a frequent topic that comes up when I’m reviewing a contract. I would say, during med school or training, most physicians are not given a breakdown of the different types of malpractice insurance coverage. So, it’s always a good idea when I’m talking to a physician who is relatively new and doesn’t understand the different professional liability insurance. Just to kind of give a brief breakdown of each one and maybe the pros and cons of each insurance policy. There are three main types of professional liability insurance policies for physicians. You have self-insurance programs from big hospital networks, and then most private practices will utilize one of two, either occurrence-based coverage or claims-made insurance coverage.
Let’s just kind of talk about three of them. First is self-insurance. Large hospital networks will usually have their own policy in the simplest way: they’ll set aside a pot of money, and pay claims out of that. In that circumstance, generally, the physician doesn’t have to worry about purchasing tail insurance coverage. That’ll be covered by the employer’s self-insurance program. This is great. I mean, it’s great insurance when a physician never has to worry about tail coverage and doesn’t have to worry about paying for the underlying premium, that is kind of a nice, secure feeling. That’s what most large hospital networks utilize. The next type is occurrence-based coverage. And what that means is an insurance policy has to be in effect when the event actually occurs.
Any kind of malpractice event is going to occur while you’re employed with the employer. So, you are covered in perpetuity if an occurrence-based policy is in place and then something happens. The benefit of occurrence-based insurance is that you don’t need to purchase tail insurance. The downside is it costs more than a claims-made policy. A good rule of thumb is that occurrence is about a third more expensive than claims-made policies annual your premium. So just to give an example, let’s say you have a claims-made policy and it’s 6,000, then your occurrence-based coverage would be around 8,000 per year.
There is a math equation that needs to be considered to determine what is the best policy for a physician. And I’ll get into that at the end. But honestly, most of the time, physicians don’t have a choice between an occurrence-based policy or a claims-made policy. It’s whatever the employer of a small business chooses to provide. That’s what the physician must go for.
The last one is the claims-made insurance policy. What that means is a policy must be in effect when the claim is made. When someone terminates a contract and they no longer work for the employer, there is still a gap in between their last day of practice with that employer and the last day somebody can sue. That’s called the statute of limitations for malpractice claims. In most states, it’s two years. If there is no insurance policy in effect if a claim is made, then the physician is at risk of trouble. Nearly every employer will require one of the parties to purchase tail insurance coverage. The need for tail insurance coverage is to simply cover that gap between the last day that a physician works for the employer and then the last day somebody can sue them.
Now, it’s two years from when the patient either knows or should have known of a malpractice incident. It’s possible that it can go past the two years period if there was no way for the patient to know until a few years down the line. I’d say most of the time if a physician is working for private practice, a small physician-owned business, group, or something like that, they’re going to have to be the one that purchases the tail policy. There are employers that will pay for tail coverage, but I’d say more times than not, the physician is responsible for their own tail coverage. Tail coverage costs about two times what the annual for claims made coverage. So, if a physician has a $10,000 annual premium for claims made coverage, you just multiply that times two, and then that’s about how much they’ll have to pay for tail insurance coverage.
It’s a one-time cost, so you don’t have to pay it every single year until the statute of limitations runs. It’s just a one-time cost. As soon as you finish the employer and then you’re covered for that amount. Now, there can be different lengths as far as the tail coverage policy goes, but most of the time the tail coverage policy will simply cover a reasonable amount of time until the statute of limitations is over. Somewhere between two to five years period. As I mentioned before, as far as the math equation, if a physician does have their choice of insurance products, either occurrence or claims made, then you need to think about the time period you’re willing to be with the employer to lessen the risk of paying more for the professional liability coverage.
If you’re paying a third more for occurrence coverage per year, but you don’t have to pay tail, then it might make sense to utilize that if you’re going to be there on maybe a short-term basis. Let’s say you’re there for a period of two years, you’re going to pay a third more for that two years period, but then you don’t have this big one-time cost at the end. If you’re in a claims-made policy and you’re going to be somewhere long-term, then it might make sense to use claims made. Therefore, your annual premium with the insurance company is cheaper, but then you’ll still have that hit on the end with the tail coverage. Which one is better? It honestly just depends upon the situation. And then certainly, it depends upon specialty.
The annual premium can vary wildly. Like primary care, peds, or something that could be 6,000 a year whereas OB-GYN, one of the higher-level surgeons, cardiac surgeon, or something like that, could be between 20,000 to 50,000 a year, and then just do the math on that tail cost. It could be forty to a hundred thousand for their tail coverage. It’s specialty-dependent as well. This certainly is something that we negotiate as it can take great resources of a physician. When we’re looking at a physician contract, you always must consider, okay, what’s most important to the physician. And then what are the areas that we can work on more comp, more time off period, better bonuses, whatever. But who pays for the tail insurance product certainly is an important piece for most physicians, especially the ones in those higher-end specialties.
Can doctors become a physician with a past felony on record? This is not going to be a state-specific discussion. Every medical board in every different state has different rules. And so, I would suggest specifically reaching out and trying to find what the rules are as far as felony bars for physicians. This is going to be kind of a general discussion of what you need to think about if you have a felony in your past, and you’re either maybe in medical school, in residency, or fellowship, and then you’re ultimately going to have to apply potentially to a new licensing board and kind of how they’ll think about that.
What Was the Degree of Felony Did the Physician Have on Criminal Record?
The first thing is what type of felony it was. There are degrees of felonies, obviously. And so, what you specifically did, is going to impact whether a board feels like they should give you a license or not. Any kind of violent crime is difficult. If it’s kind of drug or substance abuse related, that’s usually much easier to deal with. Think about this from the board’s perspective. Let’s just assume there are no laws on the books that say a physician who applies for a license in this state is just absolutely barred if they have a past felony. It’s very unlikely that the board that you’re going to be applying to has a rule like that. Most medical boards will look at each case on a case-by-case basis. There may be rules that state if the physician is currently licensed and then gets a felony, then it might be an automatic revocation, but most of them don’t just simply bar any kind of applications for past felonies.
How will the Medical Board Look at Physicians During Medical License Defense?
As I said before, they’re going to look at, alright, well, what was the felony? And then, how long ago did it happen? How many different criminal incidents were there? And then certainly, as I said before, the type. Any kind of felony-related incident or conviction that the physician rehabilitates from is going to be something that the board will be willing to work with. And as I said before, if it’s substance abuse or drug-related, well, that’s easy to rehabilitate from, you go to AA (Alcoholics Anonymous) or NA (Narcotics Anonymous), you go to therapy or group counseling, you take random drug screens, and you stop doing drugs or drinking alcohol, and you can show a prolonged period of sobriety.
All these things are the things that the board is going to care about, and they’re going to certainly check into, so if you did have a drug-related felony and then had to go to rehab or an intensive outpatient treatment program, or something like that, they’re going to want to see proof that you did all of those things. So, you want to certainly keep all the records associated with any kind of rehab that you have. Now, what if it’s something different that you can’t rehabilitate from? Like I said before, a violent crime, assault, domestic violence, something like that. Well, you need to show that things have changed in your life from what happened at the time, until the time that you apply, so the board can see you’ve at least learned from the incident and have grown from it, and they may have incorporated positive changes into your life that show that you have, I guess, made positive steps since the felony occurred.
The board wants to see that a physician is regulatable and then ultimately, they’re able to provide safe patient care in the medical field. That’s the stated mission of every medical licensing board, to protect the public. They’re not there to protect the doctor. So, if their mission is to protect the public, you need to make certain that the board understands and feels comfortable issuing the license so that public safety is not going to be an issue.
Best Steps to Take if Doctors in Training Have a past Crime
Now, how to handle this? Obviously, many people go into medical school, and then they might go into a residency in a different state. And then they plan on going into a different state when they ultimately finish training. Think about the state that you’re going to have to get a physician’s medical license if you’re going into training. That’s going to be the first hurdle on the road to becoming a professional. So, you probably need to reach out to an attorney in the state where you’re going into training, and then just see, is the past felony going to be an impediment to me getting my license?
If you can get a license in one state, it’s more likely than not that it won’t be an issue in another state. It’s just kind of common sense that if one state feels comfortable issuing a license to a doctor that the other state will likely feel comfortable as well. Now, they’re not beholden to any other state. So, just because you got a license in one state, doesn’t mean you’re going to get it in every state that you apply to. But in my experience handling these kinds of medical board cases, it is likely that if board members see, alright, well, they already have a license.
They got through training with value problems, it’s been three or four years, so it probably means this person is safe to practice. And then they’re more likely to issue the license or not. As I said before, reach out to an attorney who handles medical board issues in the state where you’re going to get your training permit originally.
Now, some medical boards have stricter scrutiny when you’re applying for a full license once you’re done with training versus just issuing a training permit or whatever kind of provisional license, they have in that state to complete your residency. So, it just makes sense to reach out to a medical board attorney in the near state and just walk through all these things. If they have experience with the board, they should know the answers to those questions of alright, okay, for people that have had this in their past, this is kind of what the board has done.
The Advice of a Lawyer to a Future Doctor
No attorney is going to be able to give you a 100% guarantee that you’re going to get a license if you’ve had something in your past, such as a felony. They cannot do that. So, you just need to kind of assess all the information you have available to you, and then make an informed decision. If you’re reading this blog, and you’re thinking, alright, I don’t even know if I should go to medical school because of a past felony. Well, once again, reach out to a board attorney in the state that maybe you’re going to school in, and then they can walk you through the scenario.
Being a felon is not a complete bar to having a medical license and being a physician, but obviously, it does have some major roadblocks associated with it, not only with getting a medical license but when you start applying for jobs in the medical field as a physician as well. And when they do a criminal background check, they’re going to see that you have a felony conviction, and you’re going to have to have a good explanation about what happened. For all the things you had to show the board about your rehabilitation, it’ll likely be the same scenario with an employer walking through.
Most employers are more understanding than the medical licensing board. But it’s going to be something you’re most likely going to have to deal with for the rest of your career. Anyway, if you have any questions about employment contracts or medical board issues, we’re in Arizona. So, keep that in mind. Hopefully, my information was kind of a good general primer on what to do if you have a felony in your past and you’re thinking of becoming a physician, maybe you’re in training and then get a felony, or maybe you are a doctor with a criminal record.
What is a DEA Audit?
Knowing what a DEA audit is can mean the difference between keeping your license for administering controlled substances and having that license taken away or even a prison sentence. Always be prepared for a DEA audit and know your rights.
What is a DEA Audit Exactly?
The DEA is a law enforcement agency in the U.S. government. They can assess both criminal and civil penalties under the law. The DEA audit is a security practice conducted by this agency. They make unannounced inspections in order to audit business locations and laboratories where registered controlled substances are stored. They ensure that the person licensed to have these controlled substances in their possession stays in compliance with the CSA (the Controlled Substance Act). They verify security practices as well as record-keeping practices.
How Often DEA Audits are Done?
Some providers are inspected once every three years, but occasionally inspections are more frequent if the provider has and prescribes buprenorphine. Drug treatment centers and other DEA registrants who are not practitioners usually get inspected every five years. The inspections can occur any time, including late in the day or around holiday weekends.
DEA Audit Requires Informed Consent
When an inspection is about to take place and the provider is presented with a DEA Form 82, the registrant has to give informed consent before the inspection can begin. The person states in writing that he is told of his constitutional right not to have an inspection and that if anything incriminating is found, it can be used against the registrant in any criminal proceedings.
Refusal of Informed Consent
When the DEA registrant has refused to give his informed consent, the DEA then has to get an inspection warrant from the Federal Court. These types of warrants are commonly issued by the courts without a problem.
When Presented with a Warrant
When you receive an administrative search warrant, you should contact an attorney right away. Do not refuse to comply with having the search done or you could be arrested.
Noncompliance with the CSA on a DEA Audit
After a DEA audit is done and any non-compliance is found, the DEA issues a report which details the issues that have been considered non-compliant to the Controlled Substances Act (CSA). The whole matter can be referred to the Department of Justice and criminal prosecution begun. Violations result in ever-increasing penalties, from a Letter of Admonition to a prison sentence.
Attorney Assistance
In order to protect your DEA registration, a DEA Show Cause Lawyer is a necessity for your defense. These attorneys are experienced in dealing with DEA investigations and with any enforcement actions that come about as a result.
Can You Get a DEA Number With a Felony?
So, can you get a DEA number with a felony? If you are registering for a DEA number and you have a felony on your record, it is important to know what to do in order to get a DEA Registration Number. Having this number is key to your career as, without it, doctors won’t be able to prescribe medications to patients.
What is a DEA Number?
A DEA number is assigned to health care providers such as physicians, nurse practitioners, dentists, and optometrists. It is issued by the Drug Enforcement Administration and allows the health care provider to write prescriptions or distribute controlled substances.
What is a Felony?
A felony is a serious crime and is often defined by the amount of time a person convicted of one would stay in prison. Usually, if the punishment is more than a year, it is considered a felony. Types of felonies and the punishments for them can vary from state to state. Medical careers can be adversely affected by having a felony on record because a medical license can be revoked.
How an Applicant for a Medical Job is Screened?
When you are applying for a job with a healthcare organization, maybe as a physician, you will likely go through a screening process. The employer must ensure that you don’t have a felony on record and that you can be fully trusted with patients and with controlled substances. The screening process usually consists of a background check and also a review of the OIG (Office of the Inspector General) exclusion list as well as the GSA (General Services Administration) exclusion list. The background check will specifically look into any felony conviction related to controlled substances, as this would deny any job within the medical community. Once convicted of a felony that involved controlled substances, this issue will carry along with an individual forever.
What the DEA Considers a “Convicted Felon”?
When a doctor with a felony conviction for a felony shows up on a person’s record, obviously the DEA considers there to have been a felony conviction. Sometimes charges may be reduced or dismissed, but the DEA still can deny a DEA number. At times a person may plead no contest to a felony, and this is considered by the DEA as an admission of a felony offense.
Getting Help in Obtaining a DEA Number
When a physician needs to get justice relating to a denial of a DEA number, you can hire a DEA Show Cause Lawyer to assist. Show cause means that one party needs to explain, justify or prove something to the court. The attorney you hire will, with your help, provide more information for the judge so that he may rescind the denial.
How Can a Physician be Terminated for Cause?
What are the ways a physician can be terminated with a cause? In any contract, there are several mechanisms to terminate a physician. One is without cause which means either party can terminate the agreement with a certain amount of notice to the other party. Usually, that’s 60 or 90 days. That’s where most terminations are going to occur, and it’s almost always on the physician’s side as well. The physician, for whatever reason, is unhappy, has a better opportunity, or just moves for the family. They give without cause termination, they work out the 60 days, and then they move on. Also, in every physician contract, there’s going to be what’s called “with cause termination”.
And there are two different parts of that: one, you’ll have a termination with a cause that can be an immediate termination, meaning, the employer doesn’t have to provide any notice to the physician, or two, it can be with cause termination with the need to cure. And so, in a contractual context, a cure period is simply a period where if someone is alleging the other party in breach of contract, they usually get somewhere between 15 to 30 days to fix the breach. And then, if the breach is cured, they move on and they can no longer terminate the contract for cause. I would say, the normal thing in people’s minds as far as cause termination are kind of the following and I’ll just go through what is listed in nearly every physician contract.
In the contract, it’s going to say, the employer can terminate this contract with cause with no notice required, and it’s usually at their discretion. So, they don’t have to fire the physician immediately, but they can. Kind of the obvious things are, if the physician loses their medical license, they can no longer practice as a physician, an obvious termination. They lose their DEA registration, so they’re no longer allowed to prescribe drugs. That’s a problem for most physicians. And so, that would be immediate termination. They die, they are permanently disabled, and they are uninsurable. This means, that if a physician continuously gets judgments due to medical malpractice, at some point, the insurance companies are going to say, we’re not going to insure you anymore. And no employer is going to keep a physician that doesn’t have malpractice insurance.
So, it’s another thing they can terminate immediately. Generally, a felony conviction is another thing. Sometimes, a state medical board will have laws that state, that if the physician is convicted of a felony, it’s an auto revocation of their medical license. In other states, it must go through an investigation for them to determine if that’s necessary. But for the most part, if you’re convicted of a felony, that’s something that results in the employer terminating a physician. In substance abuse, there might be either a moral clause or a clause about the physician being impaired in some way. I mean, for the most part, people think of impairment as far as substance abuse, drugs, alcohol, something like that. But like prescription drug abuse, it could also be psychological if someone is having mental health issues and they’re unable to practice safely. That could be an impairment.
And then, I said permanent disability before. If you’re in a specialty that requires, say a surgeon requires your hands and you have nerve damage in your hands, then that will result in the revocation of a physician’s medical license that results that the doctor can’t be a surgeon anymore. Well, obviously, they can terminate the contract for that. As I stated before, most of the time, if there’s some other kind of breach, let’s say a physician is refusing to take calls, maybe they’re acting inappropriately towards staff, they’re not fulfilling the required days, hours, that type of thing. If there’s volume expectation and they are far below that, in those scenarios, the employer will usually give, as I said before, a written notice that they have a certain number of days to fix whatever the issue is. And then if it’s fixed, the employer still could terminate them, but they would likely do it without cause since there are no workarounds to terminate them for a cause. So, that’s a little breakdown of how physicians can be terminated with cause, for cause, however, you want to characterize it.
https://www.chellelaw.com/wp-content/uploads/2020/01/cropped-favicon-1-300x300.png00adminhttps://www.chellelaw.com/wp-content/uploads/2020/01/cropped-favicon-1-300x300.pngadmin2022-05-31 16:41:462022-06-29 14:53:18Can you be a Physician with a Felony?
What is occurrence-based malpractice insurance for a dentist? If you are just coming out of training and just graduated from dental school, you probably haven’t had to think about malpractice insurance before, but when you sign your new employment contract, there’s going to be language about who pays for the underlying coverage and then potentially must pay for coverage after the contract terminates. There are two common types of malpractice insurance for dentists. You have occurrence-based coverage and claims-made coverage. Let’s kind of go through both of those and then we’ll talk a little more in-depth about occurrence-based coverage. A claims-made policy simply means a policy must be in effect when the claim is made.
What if it’s based on a policy?
A dentist could terminate the contract, leave an employer, and then if it’s a claims-made policy, it ends when they leave the employer, then there’s going to be a gap in between when they leave and then the last day they can be sued. In most states, it’s around two years. There are some exceptions. For instance, if some minors become an adult and there are others in different states but let’s just take two years kind of like a common amount. If you leave the employer and someone can sue you for two years, then you need a policy that covers the gap between those two dates, and that is called tail insurance. Now, who must pay for tail? Well, that’s going to be dictated by the terms of the employment agreement. It’s going to state most likely that the employer is going to pay for the underlying coverage, meaning, they’ll pay the annual premium, so how much it costs to cover the dentist on a year-to-year basis.
Who pays for tail insurance?
And then after the contract is terminated, who pays for tail insurance? It will state specifically in the contract. If it doesn’t, it needs to. Tail insurance is generally around twice what the annual premium is to cover the dentists. Whatever they must pay on a yearly basis, you just multiply that times two, and that’s kind of a good estimate as far as how much the dentist would have to pay for tail if they had to pay for it. It’s a one-time cost, so you don’t have to pay on a year-to-year basis. And a tail length can change depending upon how much coverage the dentist wants. It could be one year, two years, five years, or could be unlimited. That’s a little more expensive the more coverage you have. I would suggest just getting the longest amount of coverage.
What are the prior acts and prior acts date coverage in an occurrence based?
Just getting a one-year tail, even though statute limitations on a claim is two years, puts the dentist at risk and it just doesn’t make sense for it’ll probably be the difference between a few hundred dollars makes zero sense not to go for the longer coverage. That’s claims-made insurance. Now, claims made is the most common type of malpractice insurance used by dental practices. However, some use what’s called occurrence-based coverage and in occurrence-based coverage, there has to be a policy in effect when the incident occurs. If there is an occurrence-based policy, then obviously, the incident is going to occur while the dentist is employed with the practice, and no tail insurance is necessary. So, you do not have to worry about any claims after the employment relationship ends if you have an occurrence-based policy.
What is the coverage cost of occurrence?
Now, you’re probably thinking, alright, well, why would one choose occurrence versus claims made? Obviously, occurrence is better if you don’t have to purchase tail. Yes, that’s true, it’s just more expensive. An occurrence-based policy generally costs about a third more than a claims-made policy. So, just from the perspective of a dental practice, they would prefer to pay a third less per year for the malpractice insurance. Additionally, they would put the onus on the dentist to pay for tail and they save a bunch of money rather than having to pay a third more per year for an occurrence coverage and then no tail expense on the end as well. So, if you have the choice, there’s no reason not to go with the occurrence coverage if the employer is paying for it. Most employers are not going to leave it up to the dentist as far as which policy to choose.
They’re just going to have a policy and then all the providers in the practice will use the same policy. But let’s say maybe you’re an independent contractor and whoever you’re working for says, it’s up to you. Well, you need to do a kind of math equation. Let’s just say your insurance cost is 3000 per year. If you had an occurrence-based policy and let’s, just say for claims made, it was 3000 a year. Occurrence is a third more, so that would be 4,000 total for occurrence. Whereas claims made is 3000 plus usually a 6,000 tail. So, if you’re going to stay with an employer for one year, it makes sense to pay the 4,000 for occurrence-based coverage versus 3000 for a policy plus 6,000 for a tail. That’s a $5,000 difference. If you’re going to stay with an employer for a very long time, claims made might make more sense.
You just must do the math and shop for the policies and just see the price differences between the two. Dental malpractice insurance is not prohibitively expensive. Obviously, some of the subspecialties in surgery and things like that, it’s going to be more, but for the most part, dental malpractice is reasonable.
What is Claims Made Insurance for a Dentist?
What is claims made insurance for a dentist? Every dentist needs a malpractice policy while they’re practicing. And there are two common types of malpractice insurance: claims-made and occurrence-based. Claims-made policy means a policy must be in effect when a claim is made. If you’re an employee and you leave an employer, there is a gap in between the last patient you see for that employer and then the last day they sue you. That’s the statute of limitations. And generally, it’s two years in most states; it varies from state to state. And there are also exceptions for when minors become adults and that type of thing.
But let’s just use two years as an example. If someone has two years to sue you, then if you had a claims-made policy, you need an additional policy that covers that gap and that’s called tail insurance. If you have a claims-made policy, you need tail insurance. An occurrence-based policy just means a policy must be in effect when the incident occurs. No tail insurance is necessary for an occurrence-based policy. Now, the main difference between the two is cost. An occurrence-based policy is about a third more expensive per year than a claims-made policy. And then after a claims-made policy ends and you must purchase tail insurance, tail insurance is about twice what your annual premium was. So, if you had a $3,000 annual premium and you had to pay for tail insurance under a claims-made policy, it would be a $6,000 payment, depending upon who’s responsible for it, that would have to be paid.
That’s a one-time payment. It doesn’t go on year to year. You just pay it all upfront. Normally, the employer would require that tail policy would be secured prior to the end of the employment relationship between the two parties. If the employer says, it’s your choice as far as what policy you want to use, it will depend on who’s paying for it. If the employer says, I don’t care if it’s an occurrence or claims made, we’re going to pay the premiums. Then obviously, you want an occurrence-based policy because you won’t have to pay for tail. Most of the time, you don’t get a choice. And most of the time, it is claims made. And most of the time, the employer will require the dentist to pay for tail insurance.
A couple of ways to handle that. One, you can negotiate in advance to try to get the employer to cover the cost of tail insurance. If they’re unwilling to cover all the costs, one thing that we’ve been successful with is maybe forgiving an amount of it, depending upon how long you’ve been there. Let’s say you have a three-year initial term, then we would say, alright, for every year that the dentist stays employed, one-third of that tail cost is then forgiven. In that way, if you’ve been there for three years, then you wouldn’t have to pay for any of the tail after you left. That’s been an effective way of getting them to cover some tail insurance costs. Another one would be if you were in a state, used an insurance company, switched jobs and the new job uses the same insurance company as the old job, most of the time, they’ll just roll over your old policy into your new one.
In that way, you wouldn’t have to pay for tail. And then the third way of getting out of having to pay for tail is if your new employer pays for your old tail and that’s called nose coverage. It’s not prohibitively expensive for most general dentists. Obviously, if you get into some subspecialties into surgical specialties, that type of thing, it can be more expensive. But it’s not a kind of break the bank type cost. You do not want to go on without a tail policy if you have claims-made coverage. I have had a few people in the past that just said, you know what, I don’t want to pay the tail costs. I’m willing to accept the risk.
And it just seems like a foolish risk to take $6,000 to cover your tail. Whereas a malpractice claim could be many multiples of that potentially. Plus, I just would hate to have that kind of hanging over anyone’s head as well. Anyway, that’s a little primer for claims to make coverage for a dentist.
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What is a draw in a veterinary associate employment contract? A draw is related to compensation. Basically, it means how much money you are going to make each month in some way. Let’s kind of talk about the different compensation models and then when a draw would come into play. Usually, the vet would have a guaranteed base for at least the first year or two of their contract. It’s very unlikely that you would come into a new employment opportunity and just have straight productivity. In the veterinary arena, it’s almost always calculated through net collections. Net collections are any of the money that the practice receives for the vet’s personally performed services.
Whatever they collect, that’s what would be considered net collections for that vet. And one common way of doing it is let’s just say you have a one-year guarantee, and the reason why they do that is it takes time to build up a practice. Now, I guess it’s depending upon what specialty you’re in, but for the most part, let’s just say you’re a general vet. You’re not just going to hop into practice and have an immediate client base. It takes a while to build up. So, they’ll give you a guaranteed base in year one. Then after year one, they’ll probably switch you to productivity/net collections model. And that’s when a draw would come into play. The veterinary industry utilizes the pro Sal method commonly. And it’s kind of a methodology for a veterinary practice to pay their employees which allows them at least a small profit margin.
And in that method, they will basically take a projection of what your net collections would be. And the vet would then receive a smaller percentage of that per month. And then there would be a reconciliation or true up at the end of the year. Let’s just go through some examples. Let’s say the vet is making 120,000 per year in their first guaranteed base year. And then they collected that amount as well. While under pro Sal, they would maybe knock it back to 80%. You would make 10,000 in that scenario per month. And so, they would say, alright, what is going to knock it back to 80%? And then the vet is going to get a draw of $8,000 per month. And throughout the year, they’ll make 8,000 per month. And then at the end of the year, they’re going to take whatever the total net collections were for that vet versus what was paid out.
In that scenario, 8,000 times 12 minus 6,000. And then if there is a difference, meaning, if they collected more, they would then get a percentage of those net collections. Now, the downside is if you are in a negative balance, meaning, if you collected less than they paid out, they generally are going to make you pay that back over time. And what they’ll normally do is they’ll take however much you’re in the deficit for. Let’s just say it’s $6,000. Over the next three pay periods, they might take 2000 out of your paycheck until you’re back to zero. Is that fair? It just depends. Obviously, no one wants to employ any employee that doesn’t cover their own salary and expenses.
Now, if there are some underlying problems as to why a vet is not as productive and this is big in the vet industry right now due to lack of staffing. If you can’t get the vet techs, if you can’t get the front office staff, if they can’t have any efficient workflow and the vet is doing all the things that they didn’t have to do before, that will slow them down and their collections are going to decrease. Just a side note: you need to make sure there’s language in your employment agreement that states the veterinary practice will provide you with proper support to make your practice efficient. Back to the draw, it could change over time. Let’s say, you had a 120 base and then you moved into a kind of a decreased percentage per month as your draw, but then you collected 160,000.
Well, then they would probably bump up your draw to 120,000 and then they would do another reconciliation at the end of a year. There are a ton of different ways to calculate compensation in a veterinary associate contract, but that’s probably the most common way when it comes to productivity. I also find many vets are just paid a straight base no matter what for year one to year five. And that makes it simple, to be honest.
https://www.chellelaw.com/wp-content/uploads/2022/06/what-is-a-draw-in-a-veterinary-a.jpg7201280adminhttps://www.chellelaw.com/wp-content/uploads/2020/01/cropped-favicon-1-300x300.pngadmin2022-05-27 15:36:232022-06-19 17:33:12What is a Draw in a Veterinary Associate Contract?
Physician recruitment agreement forgivable loans explained. For the most part, these are used for people just coming out of training. So, how a recruitment agreement works between a hospital is the physician would have an employment agreement with a private practice within an area. And then the hospital or hospital network within that area would supplement the first-year compensation of the physician if the physician stays within the area for a period of time. I know it might be a little complicated, so let’s break it down. The employment agreement with the employer is going to dictate the employment relationship between the two parties.
There are some practices that maybe couldn’t afford at the very beginning to completely compensate a physician. And so, the hospital may have a need for that specialty in the area, but they don’t want to employ that physician themselves. So, what they’ll do is they’ll tell the practice, alright, if you bring in this physician in this specialty, we will cover their first-year expenses in addition to some bonuses. And in the recruitment agreement, it may state, alright, we’re going to give you the physician a signing bonus, we’re going to help with relocation assistance, and then we’re going to cover a certain amount of their compensation for the entire first year. Let’s just say, you’ve got a primary care physician and they’re making 200,000 a year. The hospital would essentially say, alright, we’re going to supplement 200,000 for that first year.
And then they’ll offset that by whatever the physician brings in. They’ll also cover the practice’s expenses as well. And then at the end of that year period, there’s going to be an outstanding amount of money. And that amount is going to be kind of thought of like a forgivable loan. And as long as the physician stays within that geographic area of the hospital, and there should be zip codes attached to the recruitment agreement that just says, as long as the physician stays within these zip codes, we will continue to forgive the loan. There’ll usually be a one-year income guarantee period, and then there’ll be forgiveness period after the fact. Usually, it’s three to four years. How they normally would do it is they’ll take that amount.
Let’s just say in this scenario, the total amount with signing bonuses, relocation assistance, base salary, and practice expenses is 300,000, and it’s a three-year forgiveness period. They’ll say, alright, for every month that you’re here, 1/36 of that 300,000 is forgiven. If you stay in the area practicing for three years, at the end of the three years, that amount is completely forgiven. You do not owe us anything and then you’re free to move on and do what you want. Now, why would a physician sign a recruitment agreement? Well, I would avoid it if possible, but there are some jobs where the only way that that job would exist is if they were supplemented in some way by the hospital network. And so, you need to say, alright is the practice just doing this to not have to pay me?
And I’m not going to tell the practice that they’re doing something dumb. They’re not, they’re being smart about the business. Why wouldn’t they accept supplement? Why would they say no, we’ll just pay everything, when they could have a hospital cover many of the fees. The downside to the physician is several things. One, they are going to ultimately, and very likely be responsible for whatever that outstanding amount is at the end of the initial income guarantee period. And let’s just have a scenario where they have a non-compete in their contract with the employer, but in the recruitment agreement, it states they must stay within a certain geographic region in order to forgive the outstanding amount. They could be completely limited in their options if they have a bad non-compete in the employment agreement.
Ideally, the hospital would require that the employer remove any kind of non-compete language. And I would suggest making certain that happens and you need to press the hospital network to press the employer to remove that language. If you just go to the employer and say, I’d like that removed, they may say, no, we’re not doing that. If the hospital insists that the employer remove that type of language, and you need to tell the hospital, therefore this needs to happen. It will be much more likely that it will be removed because if the practice has a need for a physician, but they don’t want to pay the entire amount of compensation and bonuses and all that good stuff at the beginning, it likely will be worth it for them to just remove the non-compete to get supplemented with all of those things that I just talked about.
That’s kind of one thing you absolutely need to think about if you have physician recruitment forgivable loan is that you kind of get the non-compete removed from the contract because if you’re in a rural environment and there just aren’t that many opportunities in your specialty, and you did have a non-compete and maybe they there’s no opportunities for you, and it would be impossible for you to work out that three year forgiveness period, you’re stuck with a significant amount of money. There is interest on that amount as well, and they’ll likely want you to pay it back immediately and fully as soon as you are no longer practicing within that region. So, that’s something a physician must be very careful about. And then another one is, every job looks great at the beginning, right? Everyone is nice, the huge growth opportunity, but when you get there, it may not be as nice.
There may be problems that there’s just no way of knowing about in the interview process. And there are times when a physician may come into a job and then immediately, they think, oh man, this is not going to work for me. If you’re under a recruitment agreement, it could cause big problems for you. One, getting out of that job or two, having to pay back significant amounts of money. I would be very careful about signing a recruitment agreement with a hospital network without really thinking about, is this the absolute place that I want to be? And then, do I have any other opportunities elsewhere that won’t require me to sign a physician recruitment agreement? It’s kind of a tough process. When I’m going over a contract with someone who just had training, they generally don’t have any knowledge about these things.
When you add in a physician recruitment agreement on top of an employment agreement, it’s like information overload for a physician. And sometimes, it’s difficult to convey the dangers of signing something like that. It’s probably infrequent, meaning, the percentage of contracts that I review that contain a recruitment agreement or have a recruitment agreement attached to it is probably less than 10%. Now, I’m not saying this is a terrible opportunity. As I said before, some jobs may simply not exist if they aren’t supplemented by the hospital for the first year, and they can turn into tremendous opportunities. But you always must look at, alright what’s the worst-case scenario in this situation? The worst-case scenario is someone signs a contract, starts a job, hates it, gets out of it, and owes 200,000, which I can tell you if you’re just out of training, you’re not going to have at least not immediately. So, that’s kind of a breakdown of physician recruitment forgivable loans. I would suggest talking to somebody, meaning, an attorney about each document before you sign anything. Honestly, be careful if you’re going to do both and find somebody that has expertise in doing this, just to get a set of eyes on it and kind of walk you through the dangers of it.
Can you be a nurse with a misdemeanor assault charge? A couple of caveats first. One, this is not going to be a state-specific talk. Every board has their own rules. So, you need to investigate whatever state you ultimately decide to apply to for your license. You need to look at those rules specifically. This is going to be more of a general conversation about what a board normally would look into if you did have a misdemeanor assault charge in your past. Also, I’m only going to direct this to applicants. If you have a current license and you’re wondering what’s going to happen, your board will have a clear path of what they do with when to report a criminal charge and then what they do when you do that.
This is more probably for people that are thinking about alright, well, maybe I’d like to go to nursing school, but I don’t know if I can get a license, or maybe you’re just getting out of nursing school and you think, oh crap, now I must apply. Is this going to be an issue? In short, probably not. If you have a misdemeanor assault charge in your past, it likely will not prohibit you from getting a nursing license. Now, there are several factors that go into whether a board is going to grant a license or not when it comes to past criminal incidents. And let’s kind of go through those. Obviously, first is how long ago did it happen? An assault charge that happened 20 years ago is going to be taken less seriously than one that happened a year ago.
And before I move forward, I just want to talk about the difference between a charge and a conviction. Most people don’t understand the difference. A charge means you’ve just been charged with something, but you haven’t been found guilty. The boards generally do not care about that at all. I use that in the title of this blog because that’s what most people search for when they’re looking for information about this. But a conviction means you have reached a plea agreement, went to trial, and lost, or had pretrial diversion program. Most boards consider that a conviction in some way. That’s what I’m talking about here, I mean like you were found guilty or pled guilty in this scenario, and then you must report it to the board on your application, or they will always do a criminal background check and maybe it pops up and then they reach out to you to talk about it.
Alright, as I said before, the first thing is how long ago did it happen. And then the second is how many assault charges do you have? I mean, there’s a difference between having one 20 years ago versus seven last year. If you have a cluster of assault charges, there’s generally a reason. It’s a mental health problem, or more likely a substance abuse problem. People don’t just have multiple assault charges because they have anger management problem, or at least it’s rare that that would happen. It’s almost always driven by problem with drugs or alcohol. First, they’re going to say, alright, we want the criminal records. So, either the court documents or the police report, and then they may ask you to write a statement about what happened.
And then at some point, they may interview you to discuss what happened. Most of the time, it’s relatively innocuous. However, as I said before, if in the police report, it states that you were intoxicated or on drugs or anything like that, the main concern about the board is not going to be whether you assaulted somebody, it’s going to be whether you have substance abuse problems that are going to render you incapable or be a risk of not being able to provide safe patient care. Even though it may start in one place like, okay, did you assault someone? It will quickly shift to, okay, maybe you assaulted somebody, but what was the underlying reason behind that? I mean, if it was just a fistfight with somebody over like a partner or something, that’s one thing. But if you’re at a bar and have had, as I said before, seven assault charges all since you were completely intoxicated and can’t handle those types of situations, well, that’s going to concern the board the most.
So, consider how long ago it happened and then how many you have and then last will be other criminal charges. If you’ve had an assault charge, a domestic violence charge, a DUI, drug possession, all that in combination obviously is going to concern any board. If it’s just one assault charge, that’s very unlikely to stop you from getting a license. If it is a long sheet of problems across multiple different charges and convictions, that will be more of a concern. If a board did have a concern about your safety to practice, or maybe they thought you did have anger management, substance abuse problems, whatever, that doesn’t mean they will just completely deny licensure. Many times, what they’ll do is they’ll offer probation to the nurse. Let’s say they have a concern about substance abuse problems.
They’ll say, alright, we will grant the license, but we will also simultaneously put you on probation. And probation normally includes random drug testing, supervision at work, AA, NA, or nurse recovery group participation, you won’t be able to work on the nursing compact, there are restrictions on the hours that you work, the setting that you work in. In that scenario, the board is kind of satisfied that they will be able to monitor the nurse in some way for a short period. Most of these usually last somewhere between 12 to 36 months. And then after that period is over with, and the nurse’s license is encumbered, then they can do whatever they want after that. The worst-case scenario would be to be denied a license, which is considered a formal disciplinary action.
But even if the board has huge concerns about the behavior of a nurse, it doesn’t mean that they can’t have alternatives. And one of them is being placed on probation. Now, there are also scenarios where the board will just say, this is so long ago, we’re just simply not concerned about your behavior. And they would just grant the license without any kind of formal disciplinary action. Just depends upon the board and depends upon the nurse. What I would suggest is if you are a nurse or at least you’re an AP, or I guess thinking of going to nursing school, and you’re just not sure based upon your past, I would find an attorney who does nursing board defense in the state that you want to apply to, and just say, look, here’s my past, what’s your opinion on whether I can get a license or not?
Now, no one is going to be able to give you a hundred percent guaranteed answer. But if someone has experience with a nursing board in any state, they should probably be able to give you at least a ballpark of yes or no. I mean, I’m here in Arizona and I can tell you, I could almost, with a hundred percent accuracy, tell somebody, yes, you would get licensed or no, you’re not, based upon their past criminal incidents. So, if you have an issue in Arizona, we’re certainly happy and willing to help you. If you have issues in another state, I suggest you reach out to someone that does that in that state. A good way of finding attorneys who represent nurses before licensing boards is to look at the old minutes of the board meeting.
Every board must release an agenda. So, basically like, here’s what’s going to happen at every board meeting in advance. And then they also must release a summary of what happened and that’s called the minutes. And then in the minutes, it will state if someone is represented by an attorney and what their name is. And so, you can kind of see, okay, well, these are the attorneys that frequently represent nurses in the state, and that’ll at least give you a starting point as far as trying to find somebody besides just randomly Googling people.
I find some places listed on their websites that they do these things, but I never see them at a board meeting. Anyway, hopefully, that was a little bit of a guideline of what to do if you’ve had a past misdemeanor assault charge.
https://www.chellelaw.com/wp-content/uploads/2020/01/cropped-favicon-1-300x300.png00adminhttps://www.chellelaw.com/wp-content/uploads/2020/01/cropped-favicon-1-300x300.pngadmin2022-05-27 14:58:032022-05-27 20:41:47Can you be a Nurse with a Misdemeanor Assault Charge?
Here are some contract tips and some new things to think about when you’re negotiating an employment contract for a surgeon. In this scenario, let’s just take employment contracts. So, either you’re coming out of training or perhaps you’re thinking of switching jobs and you’re offered an employment contract, what are the areas you should be concerned about? And then maybe some areas that you have more leverage than others. The first thing you should think about is the bonuses. In almost any contract for a surgeon, there’ll be signing bonus. And then if you are moving to a new city, town, wherever, they should pay for your relocation as well. We’ll call that relocation assistance.
So, you’ll have a signing bonus, and in addition, you’ll have relocation assistance. Now, how much is the normal signing bonus? Well, it depends. Anywhere between 20,000 to 50,000 would be a normal signing bonus. And then as far as relocation assistance, usually, somewhere between 10,000 to 15,000 would be considered a reasonable amount. If you are not getting that much for either one, that’s something you need to negotiate to improve. Some employers will try to lump it all into one. So, take that into account, just add them together. But that’s the normal range for a surgeon. Obviously, there can be more. Some places like if you’re maybe entering with a rural hospital network, they might offer some student loan assistance as well. And there are some student loan packages that can reach 150,000. Now, there will be a period that you have to stay with the employer in order to get all of that money or have it forgiven and not have to pay it back.
But there are beyond the signing bonus and the relocation assistance. Some physicians also get student loan repayment as well, and that’s mostly for people just coming out of training. You’re not going to get that if you’ve been out for a while. Alright, next, you need to think about the compensation structure. Is it just the base salary? Is it RVU production if you’re in a hospital network? Is it net collections if you’re with maybe a private physician-owned practice? You need to determine what your fair market value is, and there are a couple of ways of doing that. One, talking to the people that you’re in training with and seeing what their offers are, talking to your mentors and seeing what they’re making out there, trying to find the MGMA data. The medical group management association is kind of the industry standard for compensation amongst different specialties for physicians.
It’s difficult to get up to date MGMA data unless you have direct access to it and pay for it. You could probably Google and find some year or two old data, but very unlikely you’re going to find the most up-to-date data on your own, but that is helpful even if it’s a year or two old to see, alright, well, what’s in a normal range. You can also find beyond total compensation, average RVU production per year, per specialty, and average net collections per specialty as well. So, you need to find that out. Now, is one compensation kind of calculation better than another? Not really. If you’re in a hospital network, it’s likely going to be RVU production. If you’re in private practice, it’s likely going to be net collections. If there is productivity model involved, one is not better than another.
If you’re on net collections, it’s going to be a percentage of what the net collections that you bring into the practice from your personally performed services are. That percentage can certainly change. If you’re on pure net collections, it’ll be somewhere between 35% to 45%. If you’re on maybe a hybrid of like half guaranteed base and then half productivity, it might be somewhere between 15% to 25% of your net collections. Just kind of depends. And then RVUS, very simple. You just multiply the amount of RVUs that you produce per year, per quarter, per month, then multiply those times a conversion factor. You can find that in the MGMA data as well. That is dependent upon specialties. The different subspecialties of surgery will have different comp factor numbers. A way of negotiating is trying to find what is fair market value and whether you’re getting it or not with your new job.
Next, if you have a claims-made policy, are they going to pay for tail insurance? If you are joining a hospital network, it’s likely they’re self-insured or have policy where you will not have to pay tail. If you’re going into private practice or smaller physician-owned practice, it’s very likely they’re going to have claims-made coverage. And it’s also very likely they’re going to expect you to pay for your tail. Tail insurance just covers the gap in between when you leave an employer and then the last day somebody can sue you. And as far as cost for tail, it could normally be around twice what your annual premium is. Surgical specialties can really, I guess, vary based upon what you’re doing, but it could be anywhere from 12,000 all the way up to 30,000 a year. So, if you just double that, that’s kind of a good range of what you’d have to pay for tail. Tail is a one-time payment; you don’t pay for it per year. It’s just a one-time payment, then you’re covered for what the length of the tail policy dictates.
Getting the employer to pay for your tail certainly is important for most people that have a claims-made policy. Probably 75% of the physician-owned practices make the employee pay for it. If they’re not willing to pay for your entire tail, one strategy we’ve been successful with is telling them, let’s say a three-year initial term, then you would say, alright, for every year that I’m here, you would then chip in one-third of the cost for tail. And if you finish out the first three years, then the employer would pay for the entire amount of your tail policy. You can also get out of having to pay for tail if your new employer pays for your old tail, that’s called nose coverage.
Or, if you stay with the same insurance company at your new job, they’ll usually just roll over your policy into a new one and you wouldn’t have to pay tail. And then the last thing I’m going to talk about as far as things to think about when you’re negotiating is the non-compete. This is important, especially for surgeons. There are two components to a non-compete. You have things you can’t do while the contract is going on, that’s usually called either exclusivity or outside activities. And most of the contracts will state you have to get written approval if you want to work or practice medicine at all for anyone else during the term of your agreement. Now, a lot of surgeons will want to do moonlight, locums, or maybe let’s just say they are plastics, but they’re working for a children’s hospital just doing hands. They may want to do and keep up their skills doing adults or other types of general plastics.
And so, they want to make certain that their employment contract will allow them to do that. I mean, you wouldn’t want to be prohibited from keeping up your skills somewhere else. But most employers are strong with requiring approval. So, you want to get that approval in advance and just say, alright, if I do this, and obviously, if it doesn’t interfere with my job duties with you, am I allowed to do some of this outside stuff on my off time? And the employer should say yes in that scenario. Now, as far as the non-compete after the contract ends, you need to think about, alright, well, what is the specialty that’s stopping me from doing? Obviously, if you’re a general surgeon that says you can’t practice general surgery, that’s what it’s going to say. But once again, for other specialties that can do multiple things, you just want it to be specific to the thing that you’re doing for that employer.
And then it will be for a period, usually, somewhere between one to two years. Try to get it to one year. And then lastly, the geographic restriction will vary widely based on where you are. If you’re in an urban environment, it’ll probably be a little bit less. Somewhere between 5 to 10 miles would be considered a reasonable amount. I’ve seen contracts that try to knock a surgeon out of every contiguous county, which could be a huge geographic radius or 10 miles from every facility that their employer owns. And they could own dozens of them in a city. You want to limit it to the places that you’re practicing like your clinic location, surgery center, and hospitals where you’re performing procedures. Try to limit it to the fewest possible. And then try to really squeeze down that mileage radius as well. For some people, a non-compete is the biggest deal.
If you have family in town, kids in school, whatever it is, there’s just no way that you could move after, or if your employment ended. That could be the biggest negotiating point with an employer. Some people who move into a city for a specific job have no ties to the area and do not care because they’re going to move as soon as the contract ends. You must determine what’s the priority level for you. So, those are just four things to think about. There are obviously dozens of other things that could go into a contract. I don’t have time to go over every one of them today, but I’d say the four that I went over are usually kind of the four highlights that I hit with every physician when we’re talking about their employment contract.
