Medical Contract Lawyer | Contract Attorney

Our medical employment contract attorneys can review your contract, identify the areas we could improve, and assist you in negotiating the best contract possible. A healthcare provider contract should be taken apart and understood fully. Signing contracts before fully understanding each clause and implication could be disastrous.

Each health care provider that requests assistance from a contract attorney receives:

• Available in any state
• Flat-rate pricing, with no hidden costs for any medical professional
• Review of your proposed employment agreement by a knowledgeable attorney
• Phone consultation with one of our attorneys reviewing the contract term by term
• Follow up with a review of the needed clarifications

Contracts

Contracts are a pervasive and obligatory part of nearly all business and legal transactions. Well-drafted contracts help to enumerate the responsibilities of the involved parties, divide liabilities, protect legal rights, and ensure future relationship statuses.

These touchstones are even more crucial when applying their roles to the case of a health care provider employed by a hospital, medical group, or other health care provider. While contract drafting and negotiation can be long and arduous, legal representation is necessary to protect your rights.

The present-day conclusion is simple: A medical professional should only enter into a contract with the agreement reviewed by legal counsel.

Healthcare providers we assist include:

• Physicians
• Dentists
• Nurse Practitioners
• Optometrists
• Physician Assistants
• Veterinarians

Contract Review for Professionals in Medicine

There is too much at risk for a medical professional to take contract matters into their own hands. In addition to the specific professional implications, contract terms can significantly impact a medical professional’s family, lifestyle, and future.

There are many essential contract terms and clauses which can present complex and diverse issues for any medical professional, including:

• Non-compete clauses
• Damages
• Indemnification
• Verbal guarantees
• Insurance statements

Contracts

Additionally, often the most influential terms and clauses in any employment contract are the ones that are not present. With the advent of productivity-based employment agreements, any medical professional must review an employment agreement before they execute it.

Chelle Law has practical experience drafting and reviewing medical professional contracts for nearly every specialty.

New residents, attending medical professionals, doctors entering their first employment contract, or established medical professionals looking for new employment can all benefit from a thorough contract review.

By employing an experienced attorney for your representation, you can ensure that you will be able to fully understand the extensive and complex wording included in your contract. By having a complete understanding of the contract, you will be in a better position to decide whether you want to enter into the agreement, which will affect your career life for years to come.

Physician Contract Review

The financial benefits gained from having a physician contract reviewed and negotiated by an experienced healthcare attorney far outweigh the costs associated with a review. 

You are a valuable resource, and you should be treated and respected as such. We will personally dedicate his time to make sure that you are fully protected and will assist you in the contract process so that we fairly represent your interests.

Non-Compete Clauses for a Medical Provider?

Most courts find that a non-compete is enforceable if it is reasonable.

The general test for reasonableness by a court or arbitrator would be:

• The restraint is not more than required for protecting the employer,
• It does not inflict any untold hardships on the employer, and
• The restraint is not injurious to the public.

Non-Compete Buy-Out

Some states require a non-competition to include a buy-out. The buy-out amount usually equals one year’s compensation for the medical professional.

Is a Non-Compete Enforceable in Every State?

No, some states prohibit or severely curtail the restrictions in medical professional non-competition clauses.

Those states where a medical professional non-compete is currently prohibited or limited include:

• California
• Delaware
• Massachusetts
• Rhode Island

Breaking an Employment Contract with a Health Care Practice

The non-competition agreements in the medical professional contracts were considered initially as restraints of trade.

And thus, they were invalid on the grounds of public policy at common law. However, many restraints of trade incident to contracts were upheld based on the rule of reason. Thus, restrictive covenants between dentists not to compete after the termination of employment are generally enforceable as long as it is reasonable.

However, there are a few states which prohibit non-compete clauses. Please review your state laws for non-compete rules and regulations to see the specific rules for your state. 

The general test for reasonableness of these clauses holds that on termination of employment, a covenant that restrains an employee from competing with his former employer is reasonable if:

• The restraint is not more than required for protecting the employer.
• It does not inflict any untold hardships on the employer.
• The restraint is not injurious to the public.

In one such case, a provider restricted from practicing his specialty after leaving the hospital where he worked had their non-competition clause considered unreasonable. The judge ruled that this would be harsh if they enforced it because there are only a few other hospitals in the area with subspecialties like this one. They needed to protect themselves by preventing transfers of knowledge between providers.

Contracts

Some doctors in Ohio must sign contracts promising not to seek employment with a competing company before the employer can hire them. These agreements have been controversial, but the law is currently taking action on them to help keep both parties happy.

Recently, people found that these clauses were only enforceable if there was some legitimate interest from the employer and would damage their ability to find qualified staff later or hurt public health care.

Those needing legal advice should consult an attorney before signing any contract. Hence, they know what rights may come into play when things go wrong with their current job, regardless of whether non-compete reviews by lawyers seem necessary at first glance!

When a Provider Employer Can Enforce an Employment Contract

Many ask, are non-compete agreements enforceable by a business?

The agreement is enforceable as long as a non-compete is written well and serves the employer’s interests but not broader than necessary. Many myths have come about regarding non-compete agreements, and it is much better to be safe and sure about any agreement you are signing as an employee.

Non-competition Agreements that are Too Restrictive

Non-compete agreements are designed to prevent employees from leaving and joining a competitor company. This type of agreement can be very restrictive, with some states limiting the enforceability or, if fully enforced, rendering it almost impossible for an individual who has left his previous job in that field to find work again. Non-competitive agreements may seem like they provide stability but do not protect companies since competition brings innovation within any business climate.

Non-compete agreements are preventing professionals from being able to find work in comparable jobs. Without properly written and phrased non-competes, professionals won’t be able to change employment when they need or want too freely. It has severe repercussions for this medical personnel’s life as it can mean that after years of education and skills training, they cannot get a job with the same pay anywhere else because there is no competition for these positions within their geographic area!

When Courts Won’t Enforce a Non-competition Clause From a Business

Whenever a non-compete is signed, there has to be something of value given to the employee in exchange for signing the agreement. An exchange of value for a newly hired employee is typically that the company employs him for the job.

Employees already hired must make some other consideration of value, or the employer can’t enforce the non-compete. The courts also won’t enforce an agreement when it restricts the competition for too long. Usually, six months is considered normal.

It could vary from business to business. The courts may not enforce non-compete agreements if it restricts someone from working in a large territory. The towns, counties, or cities are often listed, but if too wide an area, it would be unfair and therefore not enforceable.

What is Tail Insurance?

Tail Insurance, also known as Extended Reporting Period coverage, must be purchased when a medical professional has claims-made professional liability insurance coverage. Tail insurance covers the gap between when a medical professional leaves an employer and when the statute of limitations on filing a medical malpractice claim ends.

Malpractice coverage is a type of professional liability coverage that helps protect medical professionals and other healthcare professionals from the financial risks associated with lawsuits in which patients believe physicians harmed them due to an incident involving medical care.

The coverage depends on how much the policy is worth (premium), and your specialty – personal injury attorneys are more likely to take cases against medical professionals working in hospitals than those who practice family medicine or internal medicine in private practice.

Most malpractice insurance carriers provide coverage with a deductible clause that can range between $0 -$100k per incident, with most doctors opting for higher deductibles due to lower premiums. A deductible clause in a malpractice policy stipulates that the insurance company will not provide coverage for any expenses incurred by the insured for injuries or damages up to an agreed-upon amount.

A deductible clause in a malpractice policy stipulates that the insurance company will not cover any expenses incurred by the insured for injuries or damages up to an agreed-upon amount per incident. The typical company’s deductible is usually $5000, but it can be higher, sometimes as high as $50,000, depending on individual state requirements and claims history.

How Much Does Tail Coverage Cost?

A good rule of thumb is tail coverage costs around two times your annual medical malpractice insurance premium. Thus, if your annual premium costs $6000, your tail cost would be around $12,000. Your tail insurance is a one-time payment, not a yearly fee.

The cost of insurance coverage depends on the claims history of the provider and the number of individual and group patients seen per year. Providers with high annual visit counts will have a lower insurance premium since their claims are spread out over more people. Thus, the choice of claims made or occurrence is essential.

Additionally, doctors who perform below average in terms of malpractice insurance claims will pay less than doctors who incur higher claim rates. A provider’s business risk profile is also taken into account when determining the rate an insurance company will charge for the occurrence-based policy.

Provider age is also factored into the equation, as younger doctors are at higher risk of committing acts that could lead to liability or making an error than older practitioners.

Who Pays for Tail Insurance?

The medical professional’s employment agreement will specify whether the medical professional or the employer pays for the tail insurance. It is a point of contention in many employment agreement negotiations, with resources from both parties advocating for their position.

People use claims made in cases where there may be periods when coverage is unavailable, such as medical professionals changing jobs. In these situations, the tail policy will protect for up to three years after leaving an employer.

The tail policy also has other limitations and exclusions, making it difficult for medical professionals who leave employers often or have a history of high liability claims against them to find affordable malpractice insurance.

As with any insurance, you must understand what your tail covers before purchasing one. There are two types of tails – open and closed – each with its benefits and drawbacks.

How Can Medical Professionals Avoid Paying for Tail Malpractice?

• Negotiate for the employer to pay for it in the Employment Agreement.
• Have your new employer pay for your tail (nose coverage).
• Stay with the same insurance carrier; the tail will get rolled into a new policy.

Which Choice is Best for Medical Professionals

Both offer the same policy limits issued by the same insurance carrier and endorsements against claims. The cost of occurrence-based and claims-made coverage can factor into a doctor’s decision:

Claims-Made Cost: Assuming claims-made coverage is in effect, a good rule of thumb is tail insurance costs around two times your annual malpractice insurance premium. Thus, if your yearly medical premium costs $6000, your cost to the insurance carrier would be around $12,000. Your insurance is a one-time payment; it is not annual. The American College of Physicians offers resources and information for multiple insurance options through AGIA Affinity for individual doctors and any practice.

Occurrence Cost: Since one does not need tail insurance under an occurrence-based insurance policy, the annual premium for an occurrence-based policy is approximately 35% more than a claims-made policy. So, if the average claims-made policy yearly premium is $6000, an occurrence-based policy would cost $8100 in coverage. The cost of insurance coverage should depend on the claims history of the provider and the number of individual and group clients seen per year. Providers with high annual visit counts (or the number of admitted seen if in-patient) will have a lower insurance premium since their claims are spread out over more people.

A retroactive date defines how far back in time claims can occur for your policy to cover your claim. If a claim happens before the date the insured’s policy is effective, the insured’s policy won’t provide retroactive benefits from the carriers for when the incident occurred. It’s a feature and form of claims-made professional liability coverage.

Contract Review Checklist (Including Disability Insurance)

Every medical professional contract is unique. However, nearly all contracts for health care providers should contain several essential terms. If the contract doesn’t spell out these crucial terms, disputes can arise when there is a disagreement between the parties regarding the details of the specific term.

For instance, if the doctor is expecting to work Monday through Thursday and the employer is expecting the provider to work Monday through Friday. Still, the specific workdays are absent from the agreement. Who prevails?

Attorneys

Spelling out the details of your job is crucial to avoid contract conflicts during the term of your employment. Below is a checklist of essential terms that contracts should contain (and a brief explanation of each term):

1. Practice Services Offered: What are the clinical patient care duties? Are you given time to review administrative tasks? How many patients are you expected to see (like in pediatrics)?
2. Patient Care Schedule: What days and hours per week are you expected to provide patient care? What is the surgery schedule? Are you involved in the planning of your schedule?
3. Locations: Which facilities will they schedule you to provide care at (outpatient clinic, surgical sites, in-patient services, etc.)?
4. Outside Activities: Are you permitted to pursue moonlighting or locum tenens opportunities? Do you need permission from the employer before you accept those practice of medicine-related positions?
5. Disability Insurance: Is disability insurance provided (short-term and long-term)?
6. Medical License: Will the practice offer reimbursement for your license? Will an advisor be provided?
7. Practice Call Schedule: How often are you on call (after-hours office call, hospital call (if applicable))?
8. Electronic Medical Records (EMR): What EMR system do they use in medicine? Will you receive training or time to review the system before providing care?
9. Base Compensation: What is the annual base salary? What is the pay period frequency? Does the base compensation increase over the term of the agreement? Is there a yearly review or quarterly review of compensation?
10. Productivity Compensation: If there is productivity compensation, how is it calculated (wRVU, net collections, patient encounters, etc.)? Is there an annual review?
11. Practice Benefits Summary: Are standard benefits offered: health, vision, dental, life, retirement, etc.? Who is the advisor of human resource benefits?
12. Paid Time Off: How much time off does the job offer? What is the split between vacation, sick days, CME attendance, and holidays? Is there an HR guide?
13. Continuing Medical Education (CME): What is the annual allowance for CME expenses, and how much time off do they offer?
14. Dues and Fees: Which business financial expenses are covered (board licensing, DEA registration, privileging, AMA membership, Board review)?
15. Relocation Assistance: Is relocation assistance offered? What are the repayment obligations if the agreement terminates before the expiration of the initial term?
16. Signing Bonus: Is an employee signing bonus offered? When is it paid? Do you have to pay it back if you leave before you complete the initial term? Are student loans paid back? Is there a forgiveness period for student loans?
17. Professional Liability Insurance: What type of liability insurance (malpractice) does the company offer: claims made, occurrence, self-insurance?
18. Tail Insurance: If tail insurance is necessary, who pays for it when the agreement terminates?
19. Term: What is the length of the initial term? Does the agreement automatically renew after the initial term?
20. For Cause Termination: What are the grounds for immediate termination for cause? Is a review provided to dispute the termination?
21. Without Cause Termination: How much notice is required for either party to terminate the agreement without cause?
22. Practice Post-Termination Payment Obligations: Will you receive production bonuses after the agreement ends?
23. Non-Compete: How long does the non-compete last, and what is the prohibited geographic scope?
24. Financial Retirement: Is a financial retirement plan offered?
25. Non-Solicitation: How long does it last, and does it cover employees, patients, and business associates?
26. Notice: How is the notice given? Via hand delivery, email, US mail, etc.? Does it have to be provided to the employer’s attorney?
27. Practice Assignment: Can the employer assign the agreement?
28. Alternative Dispute Resolution: If there is a conflict regarding the contract, will mediation or arbitration be utilized? What is the standard attorney review process for conflict? Who decides which attorney oversees the process?

Employment Contract Review Attorney

Coming into a new organization with a favorable contract can put the medical professional in a positive financial situation for years to come. Before you sign the most important contract of your life, turn to Chelle Law for assistance.