039 - Attorney Drops Truth Bombs about Physician Employment Contracts Licensed to Lead

Attorney and author Dennis Hursh helps physicians navigate their employment contracts. He describes his shock early on in his career when he saw the lopsided language in the contracts offered to his highly trained physician clients. He points out that no hospital executive would ever agree to such contractual language for themselves.
A sampling of items Mr. Hursh considers “insane”:

- 24 hour call shifts (and by the way, you will work the next day, too)
- The employer will decide if you’re disabled and has the right to terminate you if you can’t do the job
- No paycheck for you if you can’t navigate their complex credentialing process by your start date AND they reserve the right to terminate you if you aren’t fully credentialed by your start date
- Punitive non-compete clauses (a.k.a., restrictive covenants) that wreak professional and personal havoc rather than simply limit the loss of patients who might follow you when you leave
- “Brutal” provisions in the contract that the administration promises they won’t enforce (but nonetheless they won’t remove the language)
- Low starting pay with a promise (but no contractual language) of partnership to come
- “Integration” documents that provide explanations and promises related to the formal contract (but alas, they are not enforceable unless they are in the formal contract)

In this episode, Mr. Hursh exposes the risks lurking in several areas typically included in physician employment contracts (beware if these points are not explicitly addressed!):

CREDENTIALING: Flexibility can be built into the contract to allow a physician to begin a narrower scope of work if certain hospital credentials or other privileges are still delayed at the start date.

RESTRICTIVE COVENANTS (noncompete clauses): This refers to contractual language that prohibits a departing physician from practicing within a specified distance of the former employer for some period of time. Mr. Hursh draws attention to several issues regarding the distance that is specified and what is being measured: Is it the distance between the physician’s previous office and the office with the future employer? From a specific hospital or the organizational headquarters? Or from any of the employer’s sites anywhere?

MALPRACTICE INSURANCE: He describes the critical difference between Occurrence vs. Claims-Made insurance policies. Red alert if the contract simply says “malpractice insurance is provided.” If you don’t know the difference you could be saddled with expensive “tail insurance” when you hightail it out of there.

COMPENSATION, CALL, DUTY HOURS and LOCATION: Ambiguity is not the physician’s friend when it comes to an employment contract. Exquisite clarity about compensation and call is critical. If your future employer thinks full-time means 40 jam-packed patient-contact hours then, in reality, you could end up with a 60-hour workweek. Similarly, it’s critical to have clarity and security about your office and hospital location.

Mr. Hursh advises physicians to hire an attorney who has experience working with physician agreements and who has the needed resources (e.g., MGMA database, up-to-date Stark regulations). An advantage of hiring an attorney is that shelling out the money for an attorney signals that the physician is taking the offer seriously. Also, contractual challenges can be raised by the attorney so that the physician doesn’t have to directly challenge a potential employer.

Also in this episode:
•We discuss my guest’s article “Are Hospitals Evil? A Physician Contract Attorney Explains”
•How hospitals protect themselves while circumventing the bans on Corporate Practice of Medicine
•The Business School Mindset (BSM) and its many manifestations in healthcare systems
•How disdain for physicians leaks out in the language, action, and inaction of management br...