10 Things to consider when reviewing your contract
Introduction
Congratulations on your contract. Before signing, always review the contract yourself, and consider us at Pain Leaders review it for a nominal fee. Just email us at ReGenMed101@gmail.com with the Title “Contract Review.” A specialist will contact you for review.
Why is reviewing your contract important?
When you sign an employment contract, you may lose control over your work and, in some cases, forfeit a portion of your future income. There are perks to all types of employment, including sign-on bonuses, guaranteed regular income, productivity bonuses, and even ownership dividends. However, it’s the wording within the contract that can shackle you in the future and prevent you from reaching your potential.
Many of the things employed physicians complain about often can be traced back to accepting onerous provisions in their employment contract. Too many doctors focus on the salary and perks they’re offered while ignoring the meat and potatoes of the contract itself.
Although you may not be able to adjust certain features of your existing document, we’ll prepare you as best we can for your next round of negotiations.
Income Payback. You Might Have to Give Back Some Income, Even if You’re Not at Fault
Increasingly, hospitals are inserting contract provisions that make the physician financially responsible if auditors for the government or private payers identify overpayments. Upcoding errors and overpayment can be disastrous if Medicare audits the past 2 years of your practice. You may be personally responsible for the bill.
The employment contract may even make you responsible for errors you didn’t commit. It can even assume responsibility for a recovery audit contractor and any funds that are ultimately owed. We can provide options and strategies to remove or limit the responsibility of the intentional misapplication of codes. An option would be to limit responsibility to instances in which the physician is the direct cause of the error. The contract should also allow basic access to the data involved in the audit and obligate employers to pursue your defense and authorize you to help an attorney and defend you and your employer.
TOO MUCH CALL. You Could Have Too Much Call
A common concern in employment contracts is being left with more than your fair share of call duty. Employment contracts may have vague wording or no wording at all in regards to call distribution. If it’s not in the contract, always expect the worse, and hypothetically it could mean you have an unlimited call for all days and nights. Sometimes open-ended wording is beneficial to you as an employee, but in some cases, it is best to have concrete wording. In this case, it would be best to define these provisions. We can help provide options in minimizing ambiguity, and provide provisions for financial incentives if and when placed on call.
BONUS TARGETS. You will Be Paid on the Basis of Your Productivity
Many hospitals and practices now insist on productivity-based compensation. Historically, this is because of the financial squeeze that occurred in the mid-1990s when hospitals bought out practices, and almost immediately primary care physicians’ productivity declined on average 20% in the following years. It is also very important to review how your base salary and bonuses are structured and what targets and benchmarks are utilized. It would be devastating to be told to pay back some of your compensation or not be given your share of your bonuses. Unfortunately, this provision is here to stay. Productivity can be linked to multiple elements, including percent of collections, RVUs, wRVUs, or other benchmarks. Just because there is an unlimited opportunity for bonuses, does not mean it is reasonably reachable. Especially if other non-clinical work impedes, limitations in patient load, types of insurers serviced, and limited resources to maximize your income earning potential. There could even be wording within the contract that allows the employers to lower or alter your productivity target. We can help with limiting your payment formula, options for guarantee minimum, and security when high productivity is outside of your control.
RADIUS AND DISTANCE. You Won’t Have Control Over Where You Practice
Joining a large organization or health system, this could mean you may be assigned to multiple locations across a large geographic area. For instance, although your main site is in city 1, you may have to cover surrounding cities and towns when your partners are on vacation or sick. It can also mean, mornings you are in city 1, but afternoons you’re in city 2. This could mean a lot of driving, a lot of sitting in traffic, a lot of headaches and stress. This element in your contract could limit you from meeting your productivity goals. We can help with limiting these duties and the number of locations worked by setting distance, assignments, and factoring in your productivity targets and nonclinical time.
VALUE BASED COMPENSATION
Although most compensation and bonus arrangements are tied to productivity, some hospital systems and large groups are beginning to peg pay to value-based measurements. These are such metrics as clinical outcomes, patient satisfaction, adoption of electronic health records, and use of recommended screenings. Pay may also be tied to different forms of compensation, such as case rates, bundled payments, global capitation, and shared savings. Although if you are efficient and productive, value-based metrics may not be the best for your income potential. We can help discuss options and provide insight into these compensation models.
NON-COMPETE CLAUSE. You Might Be Barred From Doing Outside Work
Typically many contract’s exclusivity clauses prohibit the “practice of medicine” outside of employment. Thinking of reviewing insurance claims, working as an expert witness, or taking some other outside job to supplement your income as an employed physician? Your employment may be in jeopardy if your organization finds out, and can even demand a percentage of your outside salary, may even require additional malpractice insurance coverage, or immediate suspension or termination. Usually, a discussion with the employer will clear up any misconceptions and protect you from future issues. We can help review and offer additional insights.
TERMINATION. You Might Be Fired for No Clear Reason
Terminating employment with cause may be fine if there is a list of items that are within reason. Wording that includes “disruptive behavior,” or “contrary to the bests interests of the organization” can be the language that allows the employer the ability to terminate your employment at any time. This can be devastating especially when a sign-on bonus or other incentives were tied to your employment for a certain amount of time. Let us help you remove and add optimal wording in the contract.
CAN’T QUIT. You Might Have Difficulty Quitting
Quitting because you found a better opportunity may be harder than it seems. Evergreen contracts, advance notice of termination, and other factors can prevent you from transitioning from one employment to another. There may be a variety of provisions in your employment contract that could make it difficult to leave. Some contracts may have 6 months’ notice and a non-compete clause that prevents you from transitioning to an organization in the same city for more than 1 year. Quitting before the completion of your contract may even require repayment of all or partial sign-on bonus provided years prior, and even your last productivity based. There may also be limitations in treating the same patients at your new employment and can lead to legal action by your previous employer. Let us help you pare down these limitations and provide optimal wording to allow maximum flexibility for your career and livelihood.
NON COMPETE AGAIN. You Won’t Be Able to Practice in the Area
Although some states ban Non-Compete clauses, it doesn’t prevent employers from adding it in the contract and threatening lawsuits in the future. Restrictive Covenant, Non-Compete Clause, Limitations to practice geographic areas, are all typical features of an employment contract. Let us provide education on this area of your contract so that you are better informed prior to signing.
MALPRACTICE LAWSUITS. You Might Be Left Unprotected Against Malpractice Lawsuits
Claims made or occurrence, many employers provide physicians with some type of malpractice insurance coverage during employment, although once you leave that employment, the types of coverage may means tens of thousands of dollars in additional coverage. Having tail coverage is important for your professional livelihood, and who pays for it may be found in the details of the contract. Let us provide education on this area of your contract so that you are better informed prior to signing.
CONTRACT NEGOTIATIONS. Can You Really Get Your Contract Changed?
Absolutely, however, depending on how popular and in-demand that particular position is and how desirable you are as a candidate, can ultimately mean how much leverage you as a new graduate have. Many times a contract that is offered is usually stipulated that nothing can be changed and needs to be accepted as is. Sometimes this is the case, however, the majority of the time, certain areas of the contract can be changed and modified. The “trust me” mentality of verbal agreements are not enforceable unless it is found in the contract. Demanding 30 item changes in a contract is also not possible in most cases, but focusing on the hard yes and no elements of the contract will provide you the best opportunity to grow with an organization both professionally and personally.
Just email us at ReGenMed101@gmail.com with the Title “Contract Review.” A specialist will contact you for review.