The prevailing trend in the healthcare field today is the movement away from the private practice model to employment for hospitals and medium- to large-size practice groups. Instead of viewing employment as a temporary stepping stone towards owning a private practice, more and more healthcare professionals now choose to embark on the career path of permanent employment for a professionally managed and well-financed employer. With this in mind, having a properly and tightly drafted employment agreement that reflects the understanding and aspirations of both parties is more important than ever. Both health care employers and employees will greatly benefit from having a knowledgeable professional negotiate and draft employment agreements that are well-tailored to the particular employment situation, compliant with all applicable laws, rules and regulations, and specific enough to prevent uncomfortable misunderstandings.
Whether you are a health care employer or a professional seeking to be employed, different considerations apply. However, it is often possible to negotiate the terms and conditions of employment agreements that are fair and convenient, leaving each side feeling that their interests are fully protected. Employers and employees, while often pursuing conflicting considerations, both have a fair degree of leverage. Negotiation is key! Relying on boilerplate, one-size-fits-all employment agreements is never a good idea.
Some of the most important considerations in employment agreements are widely publicized. They include the proper description of physician’s duties and privileges, the issue of compensation (salary, productivity bonuses) and fringe benefits, partnership prospects, reimbursement of expenses, malpractice insurance premiums reimbursement, and termination clauses. Nevertheless, nuances abound.
However, the more esoteric provisions in employment contracts are not commonly well-understood by either physicians or health care employers. For example, restrictive covenants must be carefully scrutinized by a professional knowledgeable about the current legal landscape to determine if they are reasonable and likely to be enforced by courts. Complex compensation structures must be reviewed with an eye towards compliance with Stark and Anti-Kickback laws. Certain provisions of employment contracts can be in violation of labor and employment laws. There might be anti-trust considerations to certain restrictions that employers seek to place on physician employees, Medicare and Medicad issues, HIPAA implications, and the like. Depending on the type of employer, concerns over prohibitions on the corporate practice of medicine may come into play. Stark Law considerations often loom large over some of the relationships incidental to employment agreements that parties frequently seek to form at the time of joining the practice.