What should be in a telehealth contract? Also known as telemedicine, the pandemic accelerated telemedicine and telehealth across all specialties, so that it is now possible for many specialties to be done via telemedicine. Most of the state licensing boards, I would say, greatly increased the ability for physicians to utilize telemedicine, whereas maybe in the past, it was prohibited in some ways. I find I have more and more people contacting me to review telehealth employment contracts or telehealth independent contractor agreements. And there are some things that need to be thought about before they’re entered, by the physician. Now, there’s not a huge difference between a telehealth contract and just a normal employment contract.
If you join hospital network or a private physician-owned group, the agreements are going to be relatively the same with one big exception. And this is kind of the reason why I wanted to talk about this today. In the normal agreement, you’re going to have, and this goes for any kind of physician contract, you’ll 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, although 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 of, okay, well, this is how it works with telehealth agreements, but I don’t.
First, non-competes or at least non-compete law is kind of probably one of the only things that really change 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 some states, very few of them, but there are some states that completely prohibit non-competes for employment contracts for physicians. So, California, New Mexico, Massachusetts, and then there’s kind of varying degrees of what’s considered a reasonable enforceable non-compete based upon the state. Now, the tricky part with telemedicine or telehealth is how to determine 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. Other blogs of interest include:
Usually, 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. 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 then they’re also licensed in Georgia and South Carolina. The telehealth company services all those states. And so, the physician has kind of 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.
Telehealth for Health Care Providers
And then they just tee up whoever is available and do the consult or whatever they’re doing. Others will have, like in, maybe telepsych, they’ll have a set patient base that they continuously see and write scripts for. The difference between a normal non-compete where it’s just a region and the telehealth agreement is 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 likely more unenforceable versus kind of 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 at all or if there’s a way of making the non-compete enforceable by limiting the area. But let’s just 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 that states 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 is doing reads for over the last year or something like that. I mean, you can see how complicated it can get. Let’s say someone leaves the first job, they move to a second job.
They have absolutely no control over which facilities they’re providing care for the patients that they’re seeing, or anything like that. And then maybe there’s some kind of change in a business relationship down the road. And so, maybe in the first six months of the non-compete, there are no problems. And 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 says if the contracts ended, the physician would be free to provide care to those facilities? Another one would be if it was 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 receives services from the telepsych company within the last year.
Telehealth Patient Concerns
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 is it even tracked? 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 very difficult. So, I wish I had an answer of, yes, it’s enforceable, or no, it’s not. The courts have to kind of 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 prior to signing the non-compete and get into those scenarios and say, well, how am I supposed to if our company provided care to someone, and 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. So, probably it would make sense to get it looked at prior to signing the non-compete. But my guess is there’s going to be some limitations from what some of the bigger telehealth companies are making physicians signs 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’s going to have to be limited most likely by geography in some way, which in these scenarios may just be impossible to do. So, that’s a brief breakdown of what should be a telehealth contract with a huge focus on the non-compete because that’s the most important part.
What is a non-compete in a physician contract? Of all the things in a contract, besides compensation, this is probably the area that I discuss the most with the physicians I’m reviewing their contracts. It can have enormous ramifications on a professional’s career depending upon several factors that we’ll get into. Let’s do some basics as far as non-competes go. In most physician contracts, there’ll be restrictive covenants. Restrictive covenants are basically things that the physician can’t do when the employment contract ends. Standard restrictive covenants would be a non-disparagement clause. You can’t kind of badmouth the employer in some way.
In non-solicitation clause, you would be prohibited from actively soliciting patients, employees, other physicians, independent contractors, business vendors from the employer. And then there would also be a non-compete. The non-compete essentially prohibits the physician from working within a specialty for a period in a certain geographic area. Let’s get into the details of that. First, in every contract, in the non-compete, there will be a section that details what the physician can’t do, meaning, let’s just say, it’s an internal medicine physician who’s working as a hospitalist. The non-compete would state that the physician can’t work as a hospitalist for the period of time within the specific area. One thing to consider here is if you are in a specialty where you can do different things, let’s just take the internal medicine physician as an example, they could do primary care, they could do urgent care, they could do ED, they can be a hospitalist.
If in the non-compete, it says, you can’t practice medicine within that area, well, that can pose some problems if the physician needs to be in that area. So, you want to make certain that it specifically states in your specialty for the employer. If you’re a hospitalist, it just needs to say, the physician can’t work as a hospitalist within that area, within that time, not the practice of medicine. For many physicians who can do multiple things, an easy way around the non-compete, although maybe not a perfect scenario, but they could for a year do something else. And then after that year, come back and then work within their desired specialty. That’s the first thing. What does it entail? Is it the complete practice of medicine or is it just in your specialty? Should be just in your specialty.
Next, how long is the noncompete? Well, most non-competes are in a year. Many employers will stretch it out to two years. Anything above two years, I don’t think would be enforceable anywhere. If you are a physician, you do not want a non-compete longer than one year. It’s just an equitable amount of time. I think, no, this is state specific, right? I’m kind of giving you a broad outline of this. I can’t go through all the states in this video, but most courts have held that one year is the limit that they would consider a reasonable non-compete length. If you have a non-compete, you want to limit it to at least one year, nothing beyond that. And then the geographic restriction. This is probably the most important one.
Once again, generally, anywhere between 5 to 15 miles would be considered a reasonable non-compete. Now, in some states, they’ll push it for whatever reason. The Midwest states seem to really put more than that. So, 20 miles is not uncommon. You also must think about where you are located. 20 miles in a rural location that completely knocks you out of a city is certainly a lot different than 20 miles in a big metropolitan area which can knock out many potential opportunities. Maybe you’re a cardiologist in a small town in a smaller state, and it says 20 miles from your office. Well, there may not be another office that you could even get into within those 20 miles so that doesn’t really matter. Let’s say you’re in Phoenix where I am and 20 miles here could knock out hundreds, thousands of jobs potentially.
So, you would like to limit it to a small geographic restriction as possible. I’ve seen so many variations. It could be by county. In the south, they seem to use counties more than just mileage and normally it’s as the crow flies. If it says you can’t practice within your specialty for one year within 10 miles of the office, it’s not kind of a Google map road of 10 miles. It is as the crow flies. So, stick a pin in it, 10 miles all the way around that. That’s how it’s calculated. For many people, a non-compete might be the most important thing in a contract and for others, it might not matter at all. For physicians who are in a city that they don’t really have any ties to, they’re just there for the job.
They don’t care if they’re there after the fact, then we would spend more capital in getting different things changed in the agreement. Maybe the compensation or providing tail insurance or something like that. But if you are a physician who is either moving to an area to be near a family, or maybe you have a family yourself, and you just don’t want to pull your kids out of school and move them across the country. Well, then the non-compete could be the absolute most important thing. If you’re with a private physician practice, I find there’s much more leeway in negotiating the non-compete. Many of the larger hospitals, healthcare networks may just say, take it or leave it. We’re not going to negotiate. I also find that some of those big hospitals change their non-competes frequently. We have a huge healthcare network where I live, and I think every year it vacillates between different mileage and whether you can join a private practice and that’s exempted just kind of goes back and forth.
You certainly do have leverage in getting that changed in some instances, but honestly, I wish I had a better answer for you but in some instances, it’s going to be a take it or leave it offer. So, you need to think about, alright, what’s the most important to me? And then you always have to get to the point where once again, if you have to stay in a community, you won’t have any options to practice there under the terms of the non-compete, then you just have to figure out a way to move on. Some jobs are simply not worth it. And if you accept a job, you’re accepting the non-compete, they are enforceable, and nearly there’s only a few states where it’s not enforceable. When you sign that agreement, you need to understand that that non-compete is likely going to be enforced if necessary, and whatever terms you agree to are the terms that are going to hold.
Last thing, if you are negotiating a non-compete, maybe you can offer some concessions in other areas. For instance, with the non-solicit, it may say you cannot attempt to solicit patients, employees, whatever. Well, you could say for instance, I agree not to hire, not just solicit, I will not hire any employees, any other physicians, and independent contractors. That way, you’re less of a threat. If you’re in kind of like a primary care type specialty, you’re going to open a new office. The biggest concern of any employer is they bring a physician in, they leave, then take all patients, all the employees, and that old employer is kind of stuck. Maybe giving somewhere else might be worth the employer agreeing to amend the non-compete in some way. So, those are the basics of a physician’s non-compete.
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