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Healthcare Law Blog

This blog is devoted to current legal and regulatory issues affecting health care providers in New York, New Jersey and nationally. We regularly publish on topics of interest to doctors, pharmacists, hospital administrators, and everyone who is interested in the current developments in the legal landscape affecting the healthcare industry.

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The medical industry is likely the most regulated industry in the U.S. and business arrangements, including landlord-tenant arrangements are subject to scrutiny in an increasingly strict regulatory environment. Prior to executing a lease, healthcare providers opening an office, regardless of the size, should always have an expert healthcare attorney review the lease agreement. In addition to the usual lease concerns such as conditions governing: the term and options to renew, repair responsibilities, utility requirements, real estate taxes, etc., healthcare providers have additional considerations unique to their practice. Some components healthcare providers should have an experienced healthcare transactional attorney review and negotiate include:

·         Healthcare laws and regulations – providers must ensure that their lease agreement is compliant with all applicable federal and state laws, rules, and regulations, including but not limited to, the federal anti-kickback laws (42 U.S.C. § 1320a-7b) and Stark law (42 U.S.C. § 1395nn), the regulations promulgated there under, and equivalent applicable state laws.



·         The landlord-healthcare tenant relationship – Medical offices, which are usually in medical office buildings, have additional concerns unique to the medical office building setting. These leases require an extensive analysis to safeguard against common healthcare lease pitfalls, such as construction build out issues; office sharing issues, including use of medical equipment and staff; subleasing, assignment, and termination issues; as well as medical malpractice and general liability insurance issues.



·         Non-compete and restrictive covenants – providers should ensure that their lease does not violate any existing restrictive covenants contained in any other lease entered into by the landlord or provider. Moreover, they should include their own non-compete provisions to protect their office from competition from other potential renters in the office building. Providers should seek guidance from an experienced healthcare attorney as they have an in-depth understanding of the healthcare economy and market conditions, and as such are better positioned to negotiate these provisions.

If you are planning to open a new office, whether in New York or another state, do not hesitate to call our firm and speak with one of our experienced healthcare attorneys. We have the comprehensive knowledge to ensure your interests are effectively protected while your practice grows! Please do not hesitate to contact our firm for a consultation with one of our knowledgeable healthcare attorneys by phone at 212-668-0200 or via email at .

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In a recent decision, Justice Velasquez of Kings County Supreme Court held that our clients, a major importing and distribution company and its principal, were not guilty of civil contempt.  The decision follows a two-day contempt hearing.  In separate decisions, Justice Velasquez declined to reconsider his denial of the plaintiff's motion for a preliminary injunction and permitted counterclaims to proceed against our clients' opponent. 

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What should you do when a hospital approaches you with an offer to buy your practice?  Will the hospital ownership make your practice prosperous and efficient, or will it destroy the goodwill that you have worked so hard to build, and lead to a significant income reduction?

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buyOwning your own practice is one of the most rewarding ways to practice medicine.  Buying an existing practice at the right price could be a great way to immediately tap into an established patient base and avoid the stress and expense of building up a practice from scratch.  It is important, however, to avoid several common mistakes to ensure the smooth transition and post-acquisition value of the practice.   

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starting-smallFrequently, physicians who are looking to open a medical practice ask us a question: what can a healthcare attorney do for me to help me get started?

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AuditStripeStampRed We provide expert advice and representation to healthcare providers who are facing third-party, Medicaid and Medicare audits.  Through years of experience and a careful approach to each individual case, we have developed strategies allowing us to protect provider rights and achieve great results, including multiple dismissals of audits.
Contact our healthcare attorneys for us to start fighting for your rights. Read More About Our Audit Defense Practice
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If you received notice that your HMO is changing the rate it will pay you, contact MDRXLAW, the law firm of Sauchik & Giyaur, P.C. without delay.  

New York HMOs are conducting sweeping cuts to providers’ reimbursement rates. Although, the unilateral decision may seem unbeatable, an experienced healthcare attorney, negotiating on your behalf, can stop or reduce the cuts.

Providers who have contracted with HMOs understand the overwhelmingly one-sided agreements HMOs offer. Due to HMOs’ superior bargaining power and “take it” or “leave it” approach, providers are seemingly left with no room for negotiation. However, this is rarely the case.

Regardless of the HMO’s rationale, a seasoned healthcare attorney can fight back against the extremely unjust terms.

Healthcare marketplace intelligence and in-depth understanding of the factors affecting the operations of managed care networks are essential. With a thorough understanding of changing market dynamics, legislative changes, and rates of reimbursement of similarly situated providers, a healthcare attorney is in a better position to negotiate on a provider’s behalf. The importance of understanding the healthcare marketplace prior to opposing the cuts cannot be overstated. The extent an HMO will reduce or stop its cuts will depend on countless factors concerning the provider’s role in the network. Providers who attempt to negotiate their rates without an exhaustive understanding of their market are much less likely to prevail.

Further, an experienced and diligent healthcare attorney’s review of a provider’s service agreement with an HMO can uncover subtle provisions that may serve to significantly strengthen the provider’s bargaining position in the fight against the suffocating rate cuts. Review of facts by an expert is simply necessary to receive essential proper guidance with respect to your position vis-a-vis a managed care plan.

If you are a physician or a group practice facing a tough cut, call MDRXLAW for a consultation with one of our expert healthcare attorneys specializing in defense and representation of physicians and other healthcare providers in New York and New Jersey.

Kristina Giyaur, Esq. is a partner at the healthcare law firm of Sauchik & Giyaur, P.C.

Ms. Giyaur can be reached directly at 212.668.0200.
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The American Telemedicine Association (“ATA”) recently released draft Practice Guidelines for Real-time, Direct-to-Patient Primary Urgent Care Telemedicine. These guidelines cover the provision of direct-to-patient, primary and urgent care services delivered by providers using real-time, two-way videoconferencing and telephonic technologies.

Telemedicine and urgent care go hand in hand as both are primarily focused on treating injuries or illnesses in need of immediate care, but not serious enough to require an emergency room visit. With the development of telemedicine, urgent care clinics are prone for growth. The patient pool an urgent care center can treat can be expanded statewide, or potentially nationwide, rather than including only those who live within a 3- to 5-mile radius. Moreover, providers will be able to treat more patients in a day with less administrative overhead. Clinics can also provide telemedicine-based follow-up visits, a current rarity, that creates stronger relationships with patients and increases repeat business.

Although the ATA Guidelines are extremely helpful, there are still a number of important legal considerations an urgent care clinic must make before implementing an e-practice. The laws governing telemedicine vary from state to state and providers will need to comply with both the laws from the state where they are located as well as the laws of the state in which the patient is in. Accordingly, countless laws and regulations are involved, forcing providers to entirely reassess their compliance policies and procedures. Everything from displaying a license to obtaining informed consent is affected when conducting an e-visit. Thus, providers should always seek counsel from a knowledgeable healthcare attorney before attempting telemedicine.
IMPORTANT LEGAL CONSIDERATIONS FOR NEW YORK URGENT CARE CLINICS:

Medical   Malpractice Insurance – Not all malpractice insurance currently covers   telemedicine. Providers should ensure that telemedicine is covered under their medical malpractice insurance policy or purchase a separate policy that specifically covers such visits. 

Reimbursement – Some private insurance reimburse for telemedicine services. Medicare and Medicaid severely limit reimbursement but currently pending before the New York Senate is a bill that will require private insurers and Medicaid to provide coverage for even more telemedicine services, further expanding e-healthcare. 

E-Prescribing– New York requires either a pre-existing physician-patient relationship or an in-person   “touch” physical examination before prescribing of medication. However, at least 12 other states allow the prescribing of medication when the physical examination took place entirely electronically.

HIPAA – Obviously   there are a number of concerns over providers’ ability to safeguard protected health information as required under Health Insurance Portability and Accountability Act when conducting an e-visit. However, it is certainly possible. Urgent care clinic’s need to ensure that the technology they utilize is secure and their HIPAA compliance policies are up to date.;

If you are planning on implementing an e-practice, whether originating in New York or another state, do not hesitate to call our firm and speak with one of our experienced healthcare attorneys. We have the comprehensive knowledge to ensure your interests are effectively protected while your practice grows!  Please do not hesitate to contact our firm for a consultation with one of our knowledgeable healthcare attorneys by phone at 212-668-0200 or via email at .
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concernedpharmIn a decision of interest to healthcare industry employers and whistleblowers, the Supreme Court of the State of New York further limited the class of employees protected by New York Labor Law § 741 (“§741”), commonly known as the “Health Care Whistleblower Law.”  

In Von Maack v. Wyckoff Heights Medical Center, 504150/13, a hospital staff pharmacist alleged that her employer, a hospital, revengefully terminated her for reporting unsafe conditions in the hospital’s pharmacy to the federal Occupational Safety and Health Administration (“OSHA”). The hospital, on the other hand, contended that Von Maack was terminated for her uncooperative behavior. Prior to this suit, an arbitrator found that Von Maack was terminated for “just cause,” however, Von Maack, represented by her 1199 SEIU union counsel, never conveyed her whistleblower defense.

The grounds for dismissal by the Supreme Court of the State of New York were as follows: 1) a pharmacist, is not an “employee” for purposes of the health care whistleblower law because pharmacists do not perform “health care services;” 2) the doctrine of collateral estoppel, whereby litigants are prohibited from re-raising previously decided issues, bars the claim; and 3) the complaint didn’t identify exactly which law, rule or regulation the hospital violated, thereby endangering the health or safety of the public or a specific patient.

The court’s strange decision to limit the definition of “employee” under §741 will likely be the most controversial aspect of its judgment. According to the court, pharmacists, do not make judgments as to the quality of patient care, and as such, are not entitled to the “exceptional and specialized whistleblower protection.” Thus, relying on past precedent, the court held that pharmacists do not perform “health care services” under §741.

Further, this case shows the importance of choosing arguments to bring forth in arbitration. Litigants must always present all of their arguments in arbitration or else risk having the argument not heard. Here, the court held that, although it might appear that the arbitrator decided an independent issue, the doctrine barred the claim because the underlying issue was the same, whether Von Maack was justly terminated. Von Maack should have raised her whistleblower retaliation argument during the arbitration hearing. To avoid similar mishaps, healthcare employees should ensure that their counsel understands the intricacies of argument preclusion and collateral estoppel, especially union employees facing arbitration.

Additionally, the decision illustrates the importance of pleading all required elements properly. Von Maack, relying on a pharmacy regulation, didn’t point to the specific section within the regulation the hospital violated. Likewise, her complaint stated that the danger may potentially threaten the health or safety of the public or a specific patient, rather than pointing to a specific instance where the health or safety of a patient was in jeopardy. 

Clearly, the importance of proper pleadings and understanding the procedural intricacies of whistleblower retaliation claims cannot be emphasized enough. Healthcare industry employers and employees preparing for a §741 claim should always seek counsel familiar with, not just labor law, but healthcare law, whistleblower laws, and litigation and arbitration procedures.



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A recent report published by the Department of Health and Human Services Office of Inspector General (“DHHS OIG”) reported that, due to lack of clear regulations, covered entities and their contract pharmacies (“340B entities”) are struggling to properly implement the 340B Drug Discount Program. Unfortunately, DHHS OIG was unable to provide any further guidance and suggested awaiting further regulations clarifying the issues involved.

Instructive regulations are set to be open for public comment this summer and published thereafter. Until then, 340B entities will have to rely on their pharmacy regulatory attorneys’ judgment to ensure compliance with all federal and state regulations. Failure to properly implement the 340B Drug Discount Program can lead to significant financial and criminal liability. Accordingly, retaining an experienced pharmacy attorney to provide expert guidance on 340B contract pharmacy arrangements is essential to avoid violations.

The experienced and dedicated pharmacy attorneys of our Health Care Team are here to address all your questions and concerns with respect to the 340B Drug Discount Program or any other legal issues. We can be reached by email at or by phone at 212-668-0200. For more information on our attorneys and areas of practice please visit our website at www.MDRXLAW.com.
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super-lawyers-rising-stars-sauchik-giyaur-1We are pleased to announce that Kristina Giyaur, Esq. and Alec Sauchik, Esq. were recently selected as 2014 Super Lawyers New York Rising Stars in healthcare law. Less than 2.5 percent of New York attorneys receive this honor. These selections for this esteemed list are made by the research team at Super Lawyers, which is a service of the Thomson Reuters, Legal division. Each year, the research team at Super Lawyers undertakes a rigorous multi-phase selection process that includes a statewide survey of lawyers, independent evaluation of candidates by the attorney-led research staff, and a good-standing and disciplinary check.
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IMG 2469If you are a physician on partnership track or received an offer to become a partner at a private practice you need to consider a number of important factors. Forming or joining a partnership is a major life decision, one that should never be entered into without proper guidance from an experienced healthcare attorney. Partnership considerations, crucial for forming a lucrative partnership, are greatly dependent on the circumstances surrounding each practice. Accordingly, we strongly recommend that potential partners hire an exprienced healthcare attorney with in-depth knowledge of, not only commercial transactions, but the business of a medical practice as well.

Some of the partnership considerations a healthcare attorney must analyze include:

1.      Underlying economics of the practice, its assets, liabilities, risks and prospects.

2.      Financial structure of the practice, ownership rights, and governance documents, as well as, all documents, agreements, and contracts relating to the practice, including payor agreements, hospital agreements, property leases and subleases, equipment leases, management, employment, and other service agreements.

3.      The representations and warranties contained in the Purchase & Sale and/or Buy-Out Agreement and their implications.

4.      Compensation, buy-ins, buy-outs, restrictive covenants, and exit strategies including agreements regarding compensation upon dissolution of the partnership and/or death of a partner. Note that if the practice compensates owners based on their respective production, a healthcare attorney must review the initial structuring and ongoing execution of the arrangement to ensure it complies with the Stark Law, the Anti-Kickback Statute, applicable state laws, Medicare reimbursement regulations, and the Internal Revenue Service’s (IRS) unreasonable compensation regulations. 

Before committing to becoming an owner of a practice, prospective partners should have their healthcare attorney extensively review the agreements and issues involved in joining a practice to ensure a financially successful and generally rewarding partnership

If you have any questions or would like a consultation regarding this or any other healthcare legal issues please do not hesitate to call one of our experienced healthcare attorneys at 212.668.0200 or email us at . Our  healthcare partners have years of experience representing physicians in numerous transactions including practice buy-ins and buy-outs, partnership formations and dissolutions, practice mergers and acquisitions as well various types of contracting among healthcare providers. The attorneys at MDRXLAW are here to provide guidance and counsel on any of your healthcare legal matters.
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medicareOne of healthcare providers' worst nightmares is a Medicare request for repayment as a result of an unfavorable overpayment determination or audit.  Frequently, such repayments are based on determinations using extrapolation from a smaller sample. Many claims are denied with nothing but a very general explanation.  Appeals of such determinations can be very cumbersome, and might involve detailed analysis of all claims and the use of statistics. 

Providers who receive unfavorable overpayment determinations have up to five levels of appeal available to them.  First, the provider may request a redetermination from the CMS claims processing contractor.  Second, the provider may appeal to a CMS Qualified Independent Contractor (QIC).  Third, the provider may appeal to a CMS Administrative Law Judge (ALJ).  Fourth, the provider may appeal to the Medicare Appeals Counsel (MAC).  Finally, the provider can request a judicial review in a federal district court.

For each level of appeal, Medicare is required to give the provider a specific rationale for denying its claims or determining that an overpayment was made.  An adequate, specific and detailed explanation for denial of a claim or a finding of an overpayment is an essential procedural component of the appellate process.  It provides the information to effectively dispute the determination and serves as evidence that a contractor properly conducted the review.  If CMS did not require its contractors to provide an explanation for denying a claim, then it would be able to circumvent the appellate process by systematically denying claims and then changing its rationale for denial upon hearing the provider’s defense.  If a determination decision does not include specific reasoning for denial of a claim, the appeals process fails to function properly and denies the healthcare provider a full and fair appeal. 

This same logic applies to overpayment calculations performed through extrapolation from a statistical sample.  Often, CMS or one of its contractors will audit a sample of patient medical records and extrapolate its findings to all claims submitted during the look-back period.  To adequately defend against such an extrapolation, a provider needs to be fully informed of the extrapolation methodology, particularly the sample used.  In The Case of Global Home Care Inc., the MAC declined to review the ALJ’s decision to not use the extrapolation conducted by CMS’s contractor. The ALJ found that because the contractor failed to produce its sampling documentation to the provider, the provider was unable to recreate the “statistically valid random sample,” thereby denying him a full and fair appeal.  Thus, providers are entitled to see the Medicare contractor’s extrapolation methodology documentation.

If you have been audited or an overpayment determination has been made against you do not hesitate to call our firm and speak with one of our experienced healthcare attorneys.  We will ensure that your rights are effectively protected!

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PqrsCMS’s Physician Quality Reporting System (“PQRS”) is and should be of utmost importance to physicians and other eligible providers.  With proper guidance, the seemingly overwhelming new system of reporting requirements is quite manageable.  We address the PQRS issue due to the alarming fact that a vast majority of New York physicians have formed a misconception about the PQRS that may result in tangible reduction in the already-reduced Medicare reimbursement rates.

What is key for all physicians to realize is that PQRS is not simply a system of incentives, failure to comply with the new mandates will cause penalties in form of reimbursement adjustments on future claims. These penalties can and should be avoided simply by implementing a proper quality measures reporting system.

To participate in the 2014 PQRS, individual providers must report information on individual PQRS quality measures.  Which measures?  Providers get to select from 287 measures and 25 measures groups within National Quality Standard (NQS) domains such as:
  • Patient Safety,
  • Person and Caregiver-Centered Experience and Outcomes
  • Communication and Care Coordination,
  • Effective Clinical Care,
  • Community/Population Health, and
  • Efficiency and Cost Reduction
If properly implemented, a provider will receive a 0.5% increase to all of their Medicare Part B Fee-for-Service claims. The requirements vary depending on the practice’s size, specialty, and method of reporting.  On the other hand, providers who fail to properly implement the PQRS this year will be subject to a -2.0% payment adjustment on all of their 2016 claims.   

Physicians take note!  The PQRS will serve as the input source for CMS’s Value-Based Payment Modifier (“VBPM”) program.  The VBPM program will apply a value modifier to physicians’ claims under the Medicare Physician Fee Schedule (“MPFS”) based upon the quality of care furnished in relation to total costs.  Accordingly, what a physician reports under the PQRS this year, if anything, will determine how much money he gets two years from now.  Moreover, under the VBPM, physicians who don’t participate in the 2014 PQRS will be subject to an additional -2.0% payment adjustment on all of their MPFS claims.  Thus, physicians who fail to properly implement the PQRS this year will be subject to a 4% penalty plus a value based adjustment depending on the quality and efficiency of their care. 

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stethoscope data8As though the administration of a medical practice or a pharmacy establishment has not become a smothering task as things stand now, governmental scrutiny intensifies yet again!  Last week, the Federal Trade Commission (FTC) issued a unanimous ruling extending its authority over HIPAA covered entities, a significant shift from its historic role of protecting consumers and monitoring unfair business practices.  Physicians and other healthcare providers are now exposed to not only HIPAA enforcement actions, but also FTC fines and penalties in the event of a data breach. 

With this recent legislative developments , healthcare practitioners need to be extra vigilant in their HIPAA compliance policies and data protection.  To avoid exposure, every practice is strongly encouraged to implement a comprehensive compliance program in line with the applicable state and federal regulations.

Please contact our experienced healthcare attorneys with any questions pertaining to implementation of a comprehensive compliance plan, for general regulatory and compliance guidance and, immediately, in the event of an audit or an investigation by any state or federal agency.
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docsWe are pleased to bring you a variety of documents relevant to your practice.  Please visit the document archive.  We are constantly updating this section so visit often.
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stock 3009The New York State Office of Medicaid Inspector General (“OMIG”) has long required Medicaid providers to implement compliance programs as a condition of enrollment with Medicaid. However, now under Federal law, practitioners, regardless of the size of their practice, will have to develop a comprehensive compliance program. Under Section 6401 of the Patient Protection and Affordable Care Act (“PPACA” or “Obamacare”), all healthcare providers enrolled in a federal healthcare program, must implement an effective compliance program. The Department of Health and Human Services (HHS) and its Office of Inspector General (OIG) have consistently cited the following components in guidance materials as the basic elements for inclusion in compliance programs for health care providers:

Implement Written Policies, Procedures, and Standards of Conduct: Practices must maintain documentation that clearly and specifically outlines the policies and procedures for ensuring such compliance. This often includes a comprehensive “Compliance Plan” and separate written policies and procedures. The Compliance Plan should describe compliance expectations as embodied in a code of conduct or code of ethics, implement the operation of the compliance program, provide guidance to employees and others on dealing with potential compliance issues, and identify how to communicate compliance issues to appropriate compliance personnel. A basic outline of an effective compliance program will consist of:
  1. Compliance Officer/Committee Designation and High Level Oversight
  2. Effective Training and Education
  3. Effective Lines of Communication & Whistleblower Protections
  4. Effective System for Monitoring, Auditing and Identification of Compliance Risks
  5. Procedures and System for Prompt Response to Compliance Issues
  6. Well-Publicized Disciplinary Standards
With enforcement initiatives against healthcare providers ever-increasing, physician and practices which have not implemented comprehensive compliance plans, specifically meeting necessary criteria, risk exclusion from government healthcare programs. Additionally, effective compliance programs enable providers to avoid or mitigate the significant penalties associated with violations of existing health care regulations.

For example, a physician who unknowingly violates the PPACA, such as the recent Stark Law amendment requiring physicians to inform patients in writing that they have ownership or compensation relationships with providers of in-office ancillary services, could be subject to penalties of up to $15,000 for each service in violation of the Stark Law. Moreover, violations of the Anti-Kickback Statute now implicate the False Claims Act. Thus a simple gift from a physician to a referrer can subject the physician to monetary penalties of up to $25,000 and/or imprisonment of up to 5 years, as well as a penalty of $11,000 per false claim submitted, plus three times the amount of damages sustained by the federal government.

Physicians and medical practices are strongly urged to obtain proper legal guidance in this time of high regulatory turbulence in the healthcare arena and ever-increasing complexity of the administrative aspects of the practice of medicine. For answers to all of your compliance related questions, as well as with audit resolution assistance, regulatory counsel, liability avoidance guidance or when in need of an expert professional licensure defense attorney please feel free to contact the healthcare group of our firm at or by phone at 212.634.6350 or 718.787.9500. For more information on our practice areas and the backgrounds of our experienced attorneys please visit our website www.mdrxlaw.com, a place where healthcare practitioners find answers to their legal questions.
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One of the worst accusations a physician or any healthcare professional can face is a sexual misconduct complaint.  If a physician is contacted by the Office of Professional Medical Conduct (“OPMC”) they should immediately seek legal counsel and avoid engaging in any communications with the investigators prior to securing legal representation. OPMC takes sexual misconduct complaints very seriously and thoroughly investigates even unsupported and plainly baseless accusations.   If you or a physician you know is faced with allegations of sexual misconduct or a complaint has been filed by a patient alleging an incident involving inappropriate sexual conduct our team of experienced health care attorneys are here to answer all your questions and defend you in the event that proceedings are in fact initiated by the Office of Professional Medical Conduct. 

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It is very often the case that a young physician presented with an employment agreement from a hospital feels that there is absolutely no room for negotiation.  The key, as with any instance of leverage balance between contracting parties, is the initial impression and assessment of the benefit to each respective party.  And while it is true that certain industry-wide accepted provisions may be standard, many important terms of a hospital employment agreement can and should be negotiated.  And notwithstanding acceptance of any changes to the proposed terms of the agreement by the hospital-employer, what is most important for a physician is to fully understand the terms of the contract, which is a legally binding document.  Entering into an employment agreement without guidance of competent legal counsel specializing in healthcare law is a mistake that can impact the physician both financially and professionally. Therefore, a physician reviewing a proposed employment agreement should carefully analyze the terms and conditions of the contract and make sure that it reflects his or her understanding of the position offered.  If a physician discussed and agreed upon the particulars of the position with the employer, such as compensation, amount of call, vacation time, CME reimbursements, malpractice coverage and the like during an interview, all of these details must be accurately reflected in the written agreement. 

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