Telehealth Contract Review Attorney | Telemedicine Attorneys for Contracts

Our medical employment contract attorneys can review your telehealth contract, identifying the areas that could be improved and an attorney will assist you in negotiating the best telehealth contract possible. A health care 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 Attorney Robert Chelle reviewing the contract term by term
Follow up with a review of the needed clarifications

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 insure 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 a long and arduous process, legal representation is a must in order to ensure that your rights are being protected in the digital health industry.

Telehealth Contract Review by Lawyers

There is simply 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 important 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

Additionally, often times 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 it is imperative that any medical professional have an employment agreement given analysis before it is executed. Attorney Robert Chelle has practical experience drafting and reviewing medical professional contracts for nearly every specialty.

New residents, attending medical professionals, doctors entering into 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 insure that you will be able to fully understand the extensive and complex wording included in your contract. By having a full and complete understanding of the contract, you will be in a better position to make your own decision on whether or not you want to enter into the agreement which will affect your career life for years to come.

The financial benefits gained from having your 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. Attorney Robert Chelle will personally dedicate his time to make sure that your are fully protected and will assist you in the contract process so that your interests are fairly represented.

Non-Compete Buy-Out

Some states require a non-competition to include a buy-out. The buy-out amount is usually equal to 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

What Should be in a Telehealth Contract?

What should be in a telehealth contract? Telehealth is also known as telemedicine. The pandemic accelerated telemedicine and telehealth across all specialties. It is now possible to conduct practice in any specialty via telemedicine. Most of the state licensing boards, I would say, significantly increased the ability of physicians to utilize telemedicine. Whereas maybe, in some ways, it was prohibited in the past. I find that more and more people are contacting me to review telehealth employment contracts or telehealth independent contractor agreements. And some things need to be thought about before the physician enters them. There’s no huge difference between a telehealth contract and just a normal employment contract.

The Big Difference in Telehealth Contract

If you join a hospital network or a private physician-owned group, the agreements will be relatively the same, with one big exception. And this is the reason why I wanted to talk about this today. The following sentence goes for any physician contract. In the typical agreement, you’re going to have: the term, how long it last, how to terminate the contract, what the compensation is going to be, whether there are any benefits, what the employer is going to pay for, so licensing, DEA, society, associations, continuing medical education, time off potentially. However, it’s a little different for most telehealth agreements. And then, the big one is the non-compete. Now, I wish I had a bright line answer: Okay, this is how it works with telehealth agreements, but I don’t.

Non-Compete Clause

First, non-competes or at least non-compete law is probably one of the only things that change from state to state. If you were to review a physician contract, nothing would be state-specific for the most part. It’s all the same. However, each state views non-competes differently. There are very few states, but some completely prohibit non-competes for physician employment contracts. So, California, New Mexico, Massachusetts, and then there are varying degrees of what’s considered a reasonable enforceable non-compete based upon the state. The tricky part with telemedicine or telehealth is determining where the non-compete applies. If you think of a normal non-compete, it’s going to say:

For this period
After the contract terminates
Usually, one year, sometimes up to two
The physician can’t compete
Can’t either work within their specialty
In a specific geographic area
Somewhere between 5 to 15 miles from their primary practice location

And that’s simple, you just stick a pin in a map, put 15 miles around it, and then that’s where the physician cannot work during the period of the non-compete.

Why is the Non-Compete Clause Complicated in Telehealth?

Well, that doesn’t work in telehealth. I find that most physicians who are working in telehealth usually are licensed in multiple states. And so, let’s say they live in Florida, they’re licensed in Florida, but they’re also licensed in Georgia and South Carolina. The telehealth company services all those states. And so, the physician has no say in where the patient is located. And then they’re just seeing the patients that are in a queue. Different telehealth companies do it differently. Some literally the physician when they’re available or when they want to, they’ll just log in, there’s a queue of patients.

And then they tee up whoever is available and do the consult or whatever they do. Others will have, like in, maybe telepsych. They’ll have a set patient base for which they continuously see and write scripts—the difference between a normal non-compete, where it’s just a region. And most of the telehealth agreements will say, you cannot compete with current patients or provide care to current patients in this state that you’re providing care for us. Or you can’t work for another telehealth company that competes in the state that we’re currently in.

They’re much broader and, in my opinion, much more unenforceable than a standard one year, 10 to 15 miles. Now, these are just working their way through the court systems in various states. And in some states, it’s completely open as far as whether these are enforceable or if there’s a way of making the non-compete enforceable by limiting the area.

Some Examples Why It’s Complicated

But let’s give a couple of scenarios. Let’s say a physician is doing radiology while living in Georgia but then doing reads from multiple states nearby. And then, the radiology company offers a non-compete. It states that the physician can’t work for any other competing radiology company where you’re doing reads in different states. Or you can’t provide radiology services for any of the facilities that that company has been doing reads for over the last year. Or some scenario like that. I mean, you can see how complicated it can get. If someone leaves the first job, they move to a second job.

They have no control over which facilities they’re providing care for the patients they’re seeing or anything like that. And then maybe there’s some change in a business relationship. And so, there may be no problems in the first six months of the non-compete. Then, in the second half, maybe your new company starts servicing the old organizations that your first radiology job is servicing. What do you have to do? Do you have to stop providing care for those places? Was there any caveat in the original non-compete that the physician would be free to provide care to those facilities if the contracts ended? Another one would be if it were just a patient base. Let’s say it’s telepsych. The telepsych company would say the physician can’t provide care to any patient that received services from the telepsych company within the last year.

Physicians Do Not Have Control Over the Patients They See in Telehealth

And not even specific to the physician, just any services from their company. Well, once again, let’s say the physician leaves. They have no control over who the patients are that they see. They have no idea of who the previous companies were that the patients used. So, how do you determine or track whether they’re breaking the non-compete or not? And then another factor is how to track everything. Like how would an employer who made a physician sign a non-compete? How would they know if that physician is servicing patients in a new position? It would be challenging. So, I wish I had an answer: yes, it’s enforceable, or no, it’s not. The courts have to go through these areas and then decide on, alright, this is what would be considered enforceable.

And this is what would be considered not. Now, I think it makes sense for the physician to bring up these issues to their company before signing the non-compete and get into those scenarios and say, well, how am I supposed to if our company provided care to someone? Then I switched to a different company, and it’s a patient I never had, I had no relationship with, but they utilized another physician in the organization. I mean, there are so many different complications when it comes to this.

Have a Lawyer Look at the Contract Before Signing

So, it would probably make sense to get it looked at before signing the non-compete. But I guess there will be some limitations from what some of the bigger telehealth companies are making physicians sign right now. Putting a blanket, you can’t work for another telehealth company in the entire state. I don’t think that’s going to hold up at all. It will have to be limited, most likely by geography in some way, which in these scenarios may be impossible to do. So, that’s a brief breakdown of what should be a telehealth contract with a significant focus on the non-compete because that’s the most important part.

Breaking a Telemedicine Contract for Health Care Services

Medical professionals with non competition agreements in their contract were originally considered as restraints of trade, and thus 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 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 what the specific rules for your state are. The general test for reasonableness of these clauses hold that on termination of employment, a covenant which restrains an employee from competing with his former employer is termed reasonable if:

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

In one such case, a provider who was 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 it were enforced because there are only few other hospitals in the area with subspecialties like this one’s and they needed to protect themselves by preventing transfers of knowledge between providers.

Some doctors in Ohio are required to sign contracts promising not to seek employment with a competing company before they can be hired. These agreements have been controversial, but the law is currently taking action on them that will help keep both parties happy for now. Recently it was found that these clauses were only enforceable if there was some legitimate interest from the employer’s end and would damage their ability of find qualified staff later or hurt public health care as well. Those who need legal advice should consult an attorney before signing any contract like this so they know what rights may come into play down the road 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 from a business? As long as a non-compete is written well, and serves the interests of the employer but not broader than necessary, the agreement is enforceable. 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 really 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 freely change employment when they need or want too. This has serious repercussions on this person’s life as it can mean that after years of education and skills training, he or she 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 he is being hired for the job. For employees who have already been hired, some other consideration of value must be made or the non-compete can’t be enforced. The courts also won’t enforce an agreement when it restricts the competition for too long a period. Usually a 6- month period is considered normal. This could vary from business to business. The courts may not enforce non-compete agreements if it restricts someone from working in a large territory. Often the towns, counties or cities are 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 a company that offers telehealth services and when the statute of limitations on filing a medical malpractice claims 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 they were harmed as a result of an incident involving medical care. The amount of coverage depends on how much the policy is worth (premium) as well as 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 that has a deductible clause that can range anywhere 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 2 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 cost is a one-time payment; it is not an annual cost.

The cost of insurance coverage is based upon 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 important.

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 considered to be 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. This is a point of contention in many employment agreement negotiations with resources from both parties advocating for their position.

Claims-made coverage is used in cases where there may be periods of time when coverage is not available, such as medical professionals changing jobs. In these situations, the tail policy will provide protection for up to three years after leaving an employer. The tail policy also has other limitations and exclusions which can make 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 type of insurance, it’s important that you understand what your tail covers before purchasing one. There are two types of tails – open and closed – each with their own 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 (referred to as nose coverage).
Stay with the same insurance carrier and the tail will get rolled into a new policy.

Which Choice is Best for Healthcare Professionals

Both policies offer the same policy limits issued by the same insurance carrier, along with the same 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 2 times your annual malpractice insurance premium. Thus, if your annual medical premium costs $6000; your cost to the insurance carrier would be around $12,000. Your insurance cost is a one-time payment; it is not an annual cost. 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 tail insurance is not needed 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 annual premium is $6000, an occurrence-based policy would cost $8100 in coverage. The cost of insurance coverage should be based upon the claims history of the provider and the number of individual and group clients seen per year. Providers with high annual visit counts (or 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 prior to 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 AMA membership)

Every medical professional contract is unique. However, nearly all contracts for health care providers should contain several essential terms. If these essential terms in the contract are not spelled out in contracts, disputes can arise when there is a disagreement between the parties as to 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, but the specific workdays are absent from the Agreement; who prevails?

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):

Practice Services Offered: What are the clinical patient care duties? Are you given time for review of administrative tasks? How many patients are you expected to see (like in pediatrics)?
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?
Locations: Which facilities will you be scheduled to provide care at (outpatient clinic, surgical sites, in-patient services, etc.)?
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?
Disability Insurance: Is disability insurance provided (short-term and long-term)?
Medical License: Will the practice offer reimbursement for your license? Will an advisor be provided?
Practice Call Schedule: How often are you on call (after hours office call, hospital call (if applicable))?
Electronic Medical Records (EMR): What EMR system is used in the practice of medicine? Will you receive training or time to review the system prior to providing care?
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 an annual review or quarterly review of compensation?
Productivity Compensation: If there is productivity compensation; how is it calculated (wRVU, net collections, patient encounters, etc.)? Is there an annual review?
Practice Benefits Summary: Are standard benefits offered: health, vision, dental, life, retirement, etc.? Who is the advisor of human resource benefits?
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 a HR guide?
Continuing Medical Education (CME): What is the annual allowance for CME expenses and how much time off is offered?
Dues and Fees: Which business financial expenses are covered (board licensing, DEA registration, privileging, AMA membership, Board review)?
Relocation Assistance: Is relocation assistance offered? What are the repayment obligations if the Agreement is terminated prior to the expiration of the initial term?
Signing Bonus: Is an employee signing bonus offered? When is it paid? Do you have to pay it back if you leave before the initial term is completed? Are student loans paid back? Is there a forgiveness period for student loans?
Professional Liability Insurance: What type of liability insurance (malpractice) is offered: claims made, occurrence, self-insurance?
Tail Insurance: If tail insurance is necessary, who is responsible to pay for it when the Agreement is terminated?
Term: What is the length of the initial term? Does the Agreement automatically renew after the initial term?
For Cause Termination: What are the grounds for immediate termination for cause? Is a review provided to dispute the termination?
Without Cause Termination: How much notice is required for either party to terminate the Agreement without cause?
Practice Post Termination Payment Obligations: Will you receive production bonuses after the Agreement is terminated?
Non-Compete: How long does the non-compete last and what is the prohibited geographic scope?
Financial Retirement: Is a financial retirement plan offered?
Non-Solicitation: How long does it last and does it cover employees, patients, and business associates?
Notice: How is notice given? Via hand delivery, email, US mail, etc.? Does it have to be provided to the employer’s attorney?
Practice Assignment: Can the Agreement be assigned by the employer?
Alternative Dispute Resolution: If there is a conflict regarding the contract, will mediation or arbitration process be utilized? What is the standard attorney review process for conflict? Who decides which attorney oversees the process?

Health Care Contracts 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 a telemedicine contract review.