The Length, Complexity & Negotiability of Physician Employment Agreements

In the world of physician Employment Agreements, there are many aspects that are the same or similar across the board – regardless of the Employer’s location or entity type – but there can also be a great deal of variation. The length and complexity the Agreement is one factor, which coincides with how comprehensive it is, but there are also many aspects to consider in terms of which terms and provisions the Agreement contains, what aspects of the employment relationship are assumed or incorporated by reference, and finally – the overarching consideration – of whether the Agreement is “negotiable.” This blog will break down what exists out there, on all points of the spectrum, and what I often observe as a physician contract attorney.

            In a Twitter poll conducted by Joe Wolf, a partner in the healthcare division of Hall Render, physician respondents replied to his poll question regarding the length of their Employment Agreements. That poll found that approximately 40% of physicians have an Employment Agreement that is between 11 – 20 pages long. Another 25% said their Agreement was more than 20 pages, and the remaining respondents had an Agreement of five pages or less. While these responses were similar to what I see in my practice, I would note that a larger majority of my clients (about 60%) have an Agreement in the 15-20 page range. Regardless of the specifics, the point is obvious – physician Employment Agreements are not brief. They are not term sheets with certain aspects of employment relationship bullet-pointed. On the contrary, they are fairly long and long-winded, containing a great deal of complex language and details concerning both parties’ obligations and responsibilities pursuant to the employment relationship. And more, they are of course legally binding documents and must contain certain pieces of language and provisions in order to exist as a valid and enforceable contract.                            

On one end of the spectrum are the most robust of Employment Agreements, often used by large health care systems, which contain almost every provision imaginable and aim to embody every conceivable aspect of the employment relationship. On the other end of the spectrum are Employment Agreements that contain only the most straight-forward and important of employment details, such as the termination provisions and compensation method, while merely referencing other policies and procedures, which are intended to be incorporated by reference. For instance, such an Agreement might make reference to the Employer’s benefits policies, its Intellectual Property Policy, the entities’ Rules, Regulations and Bylaws, and/or the Call Responsibilities and Schedule. In these instances of incorporation by reference, it is important to remember that the entirety of the employment relationship will be made up of all applicable terms and policies, whether or not they are actually contained within the pages of the Employment Agreement.

            In serving physician clients, I often hear, “My Employer already told me that my contract isn’t negotiable.” So, is that case? Are Employment Agreements negotiable and subject to revision based on the physician’s requests? The answer, of course, is that it depends. Very broadly, I will say that in my experience, most Agreements are negotiable in at least some ways. By that I mean that in even the strictest of settings, such as an academic institution, it may be possible or even likely to successfully negotiate a couple aspects of your employment, while leaving the content of the Agreement uniform. For example, clients are often able to successfully negotiate adjustments to items like their Compensation or their Signing Bonus, despite being told the Agreement was “non-negotiable.” In those instances, what the Employer likely really means is that they will not adjust the language of the Agreement itself, or amend the scope of their Non-Compete, for instance.                                                                                                                        

As mentioned above, this strict approach and need to have their Employment Agreements very static and uniform for all physician-employees is most common in the academic setting. This is also frequently the case with large hospital systems that desire uniformity and stand by their efforts to not make any adjustments “for any one employee.” However, as with most rules in life, there are always exceptions. For instance, I recently worked with a physician who was re-negotiating a renewal to his contract with a large health system. He works in a highly specialized field and is revered for his immense experience and long-term success. In that scenario, he was able to dictate a number of adjustments to his contract, to both the content of the contract itself as well as his compensation method, because the hospital was not willing to lose him. In other words, he had very strong bargaining power.                                                                                     

Another frequent question I get relates to who will do the negotiating on a physician Employment Agreement. Most commonly and most appropriately, it is usually the entity’s legal counsel that engages in the negotiating process. However, in some situations it is a practice manager or CEO who negotiates directly with the potential physician-employee. And often, it is a combination of both. In these instances, it may be a practice manager who is the decision-maker regarding a physician’s specific duties and which location(s) they serve, and then it is the attorney who has to make the call regarding whether the Non-Compete or Termination provisions can be adjusted. In either case, it is important for physicians to understand their right - and arguably their duty - to be represented by counsel in the negotiating process. Not only should physicians exercise due diligence in ensuring they are making informed decisions in the process, they should seek representation in order to level the playing field. Employers invariably have more power in the employment relationship, and the fact that they (or their attorneys) are the ones that drafted the Employment Agreement means that the playing field is inequitable from the get go. The only way to make a fair and informed decision about entering into a contractual relationship is to be appropriately represented by legal counsel.

            The attorneys of Lauth O’Neill Physician Agency are experienced and able to guide you through this process.

Restricted Activities: How Does Your Physician Employment Agreement Restrict Your Behavior and Income?

ATTORNEY ADVERTISING

As a physician, when you are offered an employment agreement, you expect it to outline your role and responsibilities, and tell you how much you will be paid. What you may not expect is the many ways in which the agreement can restrict your behavior. Whether entering employment in a hospital or a private practice, it is a near certainty that your physician employment agreement will prohibit certain activities on your behalf, and also may restrict your rights and interests to property and income. Two common provisions of physician employment agreements are addressed below: outside professional activities and intellectual property.

Outside Activities

Physician participation in professional activities outside of the employment agreement is an issue addressed in almost every single agreement that we see. When a physician enters an employment arrangement, the employer often wants to ensure that the entirety of the physician’s professional time and focus is dedicated to the employer. While this is not terribly surprising or unreasonable, such provisions can have far-reaching effects.

There is a plethora of activities that are uniquely available to physicians as ways to earn additional income and expand their professional focus. These activities include moonlighting, researching, teaching, serving as an expert witness on legal matters and working as a consultant for drug or device companies. Depending on what your employment agreement states, you may be entirely restricted from engaging in these activities. Further, employment agreements sometimes take a somewhat deceitful approach by sneaking in language indicating that if you do engage in outside activities, any income you earn will be the employer’s property.

Close attention to the applicable language is necessary to determine what exactly the employer aims to restrict, and then to decide on an approach for negotiating any disagreeable language.

Intellectual Property

Somewhat of a less common issue in physician employment agreements concerns rights to intellectual property. Generally found in agreements with large hospitals and academic institutions, these provisions aim to assume ownership for any intellectual property that a physician develops during the term of his employment. The agreement will state that the Physician irrevocably assigns to the Employer all rights, title and interest in inventions, discoveries or patents that the physician develops. In other words, if you develop any money-making ideas while working for the employer, you may in fact have no rights to them. Such provisions sometimes even go further to extend beyond the term of the employment agreement, such that any intellectual property developed within x years of the Agreement is also assigned to the employer.

While this type of provision is not problematic for all physicians, those who are affected should be mindful. Is it conceivable that you will engage in developing intellectual property in the future? If so, what rights will the employer assume by virtue of your employment relationship?

Before signing an employment agreement, physicians should take the time to seek the advice and counsel of an attorney experienced in physician employment matters. To consult with an attorney-agent about your employment agreement, please contact Lauth O'Neill at (317) 979-4833 or loneill@lauthoneill.com.

ATTORNEY ADVERTISING

Gender Pay Gap Among Physicians

ATTORNEY ADVERTISING

If you have not been blasted with reports about the gender pay gap in Hollywood, you may be living under a rock. Recent news articles and headlines have scoured the issue, and just about everyone is weighing in on the disparity between men and women’s incomes. Liam Neeson, for example, thinks the pay gap is “f---ing disgraceful.” While opinions and frustration levels vary, it is pretty much safe to say - nearly everyone is troubled by the pay gap.

Despite all the recent reports, it is important to note that the gender pay gap is not limited to those that grace the silver screen. Rather, the pay gap affects people across all professions and industries in the US. People, however, may be surprised to learn that the gender pay gap is alive and well among one of our country’s oldest and most revered professions: medicine. That’s right – although the year is 2018, reports indicate that female physicians – across all specialties - earn an average of 74 cents for every dollar that male physicians make. This figure translates to an approximate $90,000 per year. Even when the data is broken down based on medical specialty, there is no area where women earn as much as men. Of course, it is not news to anyone that the medical field is one that has historically been dominated by men. While male doctors still greatly outnumber females – approximately 66% of physicians in the US are men – women are entering the medical field at unprecedented rates. The number of women enrolled in medical school recently reached a 10-year high, and in 2015, female medical school graduates outnumbered males in several states.

One of the largest factors affecting compensation among men versus women is geography. The statistics prove that where you live does matter. In several cities, the pay gap is 30% or more (including Charlotte and Durham, North Carolina; Orlando, Florida; and Pittsburgh). Five other cities have pay gaps of at least 29%. It appears that the pay gap was the least significant (relatively speaking) in Sacramento, where female physicians earn 19% less than their male counterparts.

Perhaps the most disturbing aspect of this issue is an examination of when, if ever, the gap will close. Although the gender pay gap has certainly been inching closer and closer together (no one can deny the progress made in women’s education and workforce participation since the 19070s), the rate of change simply is not happening fast enough. Experts estimate that if the rate of change experienced between 1960 and 2016 continues, then women are expected to achieve pay equality in 2059. However, experts also advise that progress has slowed in recent years (since 2001, specifically), such that if the more recent and slower rate of change continues, women will not achieve pay equality until 2119. So, even if we take the more optimistic stance, women will continue to earn less money than their male counterparts for another staggering 41 years.

Having presumably achieved the same level of education and training upon entering the work force, why do female and male physicians get paid so differently? Unfortunately, there truly is not a good answer, but it appears that at least part of the problem is self-doubt and reluctance on behalf of women. Reports indicate that, in general, women feel less comfortable than men when it comes to negotiating their compensation, and therefore simply accept what is offered to them. Therefore, although the problems working professionals in our country face require a systemic response, it is clear that we also need women to stand up for their value and for female voices to be heard.

The physician-agents of Lauth O’Neill work solely on behalf of health care providers, and are experienced in the analysis and negotiation of physician employment contracts. If you have questions about your contract or compensation plan, contact the physician-agents of Lauth O’Neill.

ATTORNEY ADVERTISING

Physician Contract Review Tips: Intellectual Property

ATTORNEY ADVERTISING

In this next installment in our 2015 Physician Contract Review Tips series, we are discussing a subject closely related to our last article on Outside Income-Generating Activities. That article discussed physician employment agreement language that dictates whether the employed physician can participate in outside activities and retain the income therefrom.  In this article, we are focusing on intellectual property issues that surround certain work product that physician employees may create.  The range of focus on intellectual property rights in physician employment contracts spans from no mention at all, to sweeping, overly-broad language that leaves the physician employee with no rights or interest in his or her own intellectual property.  For many physicians, intellectual property issues may not be a hot button topic, but for those physicians who foresee participating in invention, innovation, consulting, and research work, any language in your agreement having to do with intellectual property can be hugely impactful.

It is crucial that physicians understand each and every term of their employment agreement to the fullest extent, and it is also of utmost importance that physicians never assume they will not, at some point down the road, become involved in activities that might result in work product that is protectable. For instance, while you may not foresee working with a device manufacturer in the future, you also might not be comfortable signing over to your employer, for free, all of your future ideas, inventions, patents, copyrights, trademarks and other protectable work product. Some physician employment agreements do in fact go so far as to provide that the physician employee is agreeing to hand over to their new employer, at no cost, or at only a very minimal cost, their entire inventory, current and future, of intellectual property.  As one can imagine, agreeing to language of this sort could end up costing the physician employee an enormous amount of money in the instance where a piece of intellectual property becomes valuable in the future.  The moral of this article, as is true with physician contract reviews in general, is to not sell yourself short. Especially if you are just coming out of training, you may be hesitant to negotiate away certain contract terms that will limit your rights and interests down the road, but do not assume that they will always be irrelevant to you. They may in fact one day be more lucrative than your basic compensation you earn from providing medical services.

For more information on physician contract review tips, please contact Leigh Ann at 317-989-4833 or loneill@lauthoneill.com.

ATTORNEY ADVERTISING

Physician Employment Contracts: What Really is in the Contract?

ATTORNEY ADVERTISING

One of the things we often hear in law school is that the terms of an agreement are dictated by the "four corners" of the contract. In other words, only what is literally contained within the four corners of the pages of a contract are included in the actual binding agreement. To many clients I work with, this news is somewhat surprising. In many cases, clients have been working with potential employers for months, going over the details of their physician employment contract, only to finally get a copy of the actual agreement and find that everything discussed has not been included.

This can be a very frustrating part of the contract negotiation process. By the time an agreement comes around, physicians are often very excited to be done with the process, and want to sign the agreement and be done with it. I always caution physicians to not be hasty in signing their employment agreements, and instead, be completely confident that any term they cannot live without is in writing, as part of the agreement. This can mean bonus compensation, special equipment or support staff promised, or even your family's health insurance benefits. If it's not set out in the agreement, the employer has no obligation to provide you with it.

Likewise, I often talk with physicians who have requirements in their contract they may not be readily willing to adhere to. For instance, the possibility of traveling to any office location the employer maintains. Often the employer will assure the physician employee that such language is merely standard, and they won't be required to actually follow through with many of these requirements. This may be true in some cases, but as long as the terms are included in the agreement, the employer will be in a position to enforce these duties and responsibilities.

Therefore, it is very important that physicians have a thorough understanding of what their employment agreements are offering them, and what they're requiring them to do. Only then can the physician make a truly informed decision in accepting an employment agreement.

For more information on physician contract review and negotiation issues, please contact Leigh Ann O'Neill at 317-989-4833 or loneill@lauthoneill.com.

ATTORNEY ADVERTISING

Physician Contract Review & Negotiation: Make the Money Useful

ATTORNEY ADVERTISING

If you're rounding out your physician job search and have been offered a physician employment contract, congratulations! At this time of year, many physicians are signing their physician employment agreements and looking forward to beginning work. Maybe you've had your physician contract reviewed by a physician lawyer, and you're confident that it's just the way you want it. Maybe you haven't taken the step of having a physician lawyer review your contract, but you'd still like some helpful tips anyway. One particular dilemma that especially comes to light this time of year is the "payment gap". You're finishing up your residency or fellowship, and you'll start your new job maybe sometime in August or September- maybe you're taking a few well-deserved weeks off before you begin. Well-deserved, they may be, but we all know they come at a price. Where is your income going to come from during your time off before you start your job?

If you enlist the help of a physician contract lawyer, they will likely readily assist you with this dilemma. While each and every physician employment contract is different and all circumstances and possible outcomes are unique, it may be possible to maneuver the salary offered to you to help you out as you finish up training. Even if you were not offered a signing bonus or moving expenses reimbursement, it may be possible to adjust your salary in such a way to offer you some initial compensation up front.

ATTORNEY ADVERTISING

Value Added by a Physician Agent and Attorney

ATTORNEY ADVERTISING

In this series of articles, we are outlining examples of how Lauth O’Neill’s physician contract review and agent services have added value to our physician clients. While every physician job search is unique and has its own unique outcome, all of the examples in this series are based on actual client experiences.

Value-Added Example #4: Creating favorable and achievable bonus compensation terms. Often times when a physician receives an employment offer, the contract will include a guaranteed salary amount which will be paid to the physician each year of the contract term. In certain specialties and in certain regions of the country, physicians may be very likely to collect payments for their employer that far exceed the minimum salary offered to the physician employee. While many employers do not first offer any bonus or incentive compensation to young physicians who are straight out of residency, it certainly may be an option to you if the legal terms are crafted carefully and so that the employer feels comfortable agreeing to them. If you have access to the MGMA physician compensation survey, you will be able to determine what your potential collections will be, on average, in your first years of training. With this information, it is possible for a physician contract review attorney to create a bonus payment structure that will allow you to achieve compensation beyond what your salary guarantee will pay you.

For more information on ways to increase your physician salary and overall physician compensation, please contact Leigh Ann O'Neill at 317-989-4833 or loneill@lauthoneill.com.

ATTORNEY ADVERTISING

How do you Gain from Lauth O'Neill Physician Agency?

ATTORNEY ADVERTISING

The answer is simple: We make our clients money, and we save our clients money. The physician job search process is certainly not a short or simple one. It takes months, and more typically, years to complete, and involves innumerable moving parts. The job search process requires extensive outreach efforts and marketing of a physician's credentials and qualifications. And once job offers are received, the physician employment contracts must be legally reviewed for costly and detrimental legal terms, and also negotiated to ensure the best offer is accepted. After all, the point of a physician job search is not to just find a job. The point of your physician job search is to find the best job for you- and the one that is most advantageous to you legally and financially.

In this series of articles, I will outline examples of ways Lauth O'Neill's professional services have added value to our physician clients. While every physician job search is unique and has its own unique outcome, all of the following are based on actual client experiences.

Lauth O'Neill Value-Added Example #1: A $75,000 increase in annual salary, in addition to a $50,000 signing bonus. How did we pull this off? We know how to gain leverage for our clients, and we know how to use it appropriately to negotiate better benefits.

Lauth O'Neill Value-Added Example #2: Amending insufficient medical malpractice coverage terms to avoid unquantifiable expense to our client. When a physician employment contract includes insufficient medical malpractice coverage, the consequence can be detrimental to the physician- not only expensive, but potentially career-ending. We understand the ins and outs of physician employment agreements, and know exactly what to look for to ensure that our clients are not stuck with unfavorable and harmful legal terms.

Check back here often or contact Leigh Ann directly for additional ways Lauth O'Neill Physician Agency provides value to its clients. Contact Leigh Ann at loneill@lauthoneill.com or 317-989-4833.

ATTORNEY ADVERTISING

Physician Contract Review Tips: Not-so-Obvious Points to Keep in Mind

ATTORNEY ADVERTISING

When I am hired to do a physician employment contract review, I regularly uncover a multitude of different contract provisions that can be made more favorable to my clients. In some instances the employment contract is relatively balanced with regard to many contract terms, but in other ways the contract is completely lacking in crucial provisions that will make the employment arrangement a good one for the physician to enter. For example, a few not-so-obvious aspects to keep in mind are:

1. Your ability to earn income outside of the employment arrangement- Many times employers attempt to keep for themselves any income earned by the physician for activities performed as a physician. For example, some physician employment contracts stipulate that if a physician consults with device manufacturers or other medical industry companies, any income realized from the physician's work for the company will be the property of the physician's employer.  Other times contracts will require that a certain percentage of this income must be paid over to the employer. It is also not uncommon for physician employment contracts to require that any income earned by the physician for serving as an expert witness in a trial, or in other physician-based capacities will be the property of the employer. Provisions such as these are obviously unfavorable to physicians, as in many cases, especially those in private practice, physicians rely on outside compensation to supplement their annual income.

2. Having assigned OR and procedure room times- This point is often overlooked by younger physicians who are accustomed to being forced to work at all hours of the day and night, whether they want to or not. Of course, starting your own practice is an entirely new ballgame, and one factor that is often overlooked is the assurance that you will in fact have a physical space to practice medicine and surgery. Many times physician employment agreements will simply state that the employer will provide the physician employee with the space and equipment he or she needs to perform the job at hand. However, it is a maddening experience to show up to work on day 1 and find that the optimal OR and procedure room times are filled by senior physicians, or those who made sure to ask for specific time assignments in their physician employment contract. One can only imagine the frustration felt by a physician starting a new job who comes to find out that yes, in fact, they do have two days worth of assigned OR or procedure room time, but it's broken up between afternoons on Tuesdays and Fridays and all day on Saturday. Paying close attention to the terms of a physician employment contract relating to these accommodations can make an enormous difference in the long-term success and satisfaction in an employment arrangement.

3. Ensuring balanced billing responsibilities and liabilities- It is not uncommon, especially in private practice, for physician employment contracts to include a provision placing responsibility on the physician employee for certain billing duties. In some cases, employment agreements state that billing personnel will be responsible for coding the services provided by the physician and submitting the bills for payment, but also that the physician will be liable for any recoupments or other recoveries that occur due to incorrect bills. While it is desirable for physicians to have someone experienced in billing be responsible for submitting their claims, there can be very detrimental consequences to the physician if a mistake is made and care has not been taken to protect the physician from liability. Additionally, this type of arrangement can lead to unforeseen consequences to a physician's incentive or bonus income if billing responsibility is not properly tailored.

It is important that physicians have their employment agreements thoroughly reviewed to ensure that all provisions are carefully considered, and that they negotiate for adjustments to be made in critical terms so that their employment arrangement ends up being as favorable as possible.

ATTORNEY ADVERTISING

Physician Contract Negotiations: Don't Miss Out!

ATTORNEY ADVERTISING

I recently spoke with a group of medical residents and their spouses and we discussed the value in negotiating their physician employment contracts, and whether doing so was really necessary or of benefit to the physicians.  It was suggested that they may have previously been hesitant to negotiate, but they had recently learned of specific instances of physicians employed by one of their training hospitals that changed their minds. In the specific instance they cited, three physicians had recently started jobs at the training hospital, and they were all joining the same departments and with the same salary and employment offer, except one physician was given an additional $10,000 in moving expenses that the other physicians did not receive.  The residents I was speaking with were surprised to learn why the one physician was given the extra $10,000- simply because the physician asked for it!

This is a typical example of the difference that can be made with some simple physician contract negotiations. And I always cringe when I hear stories of this sort from the side of the physicians who didn't ask for any changes to be made to their contract. When you know how to tactfully and respectfully negotiate your physician employment agreement, it is possible to obtain added benefits and even higher salary and other forms of compensation.  An experienced physician agent has knowledge of what perks physicians can expect from their employment offers, and they know how to successfully negotiate to ensure that those added benefits are not left on the table.

ATTORNEY ADVERTISING

Isn't Job Searching Too Personal To Have An Agent Do It?

ATTORNEY ADVERTISING

This is a question I sometimes hear mumbled when I discuss what I do with others. They wonder if the job search process might be too personal to have someone else involved in it, let alone take the reigns and head it up. And I always say, "yes, physician job searching is certainly very personal. But that is where our strengths come in." The bottom line is that physicians don't want to embark on their job search all on their own. When done properly, it's too time consuming and burdensome, and involves too many tedious tasks. Not to mention, physicians understand that a physician agent has the experience necessary to put the physician on a level playing field with the employers in terms of getting the benefits, salary, and other forms of compensation they deserve.  After all, physician agents have experience with negotiating contract terms and they understand the various physician compensation models and how to make sure physicians get the best deal out of their next employment arrangement.

So while the job search process is, of course, highly personal, we make it our duty to ensure we know all about what you want out of your next job. We talk with you to find out what sort of practice you envision yourself having, in what part of the country you would like it to be, and what aspects of life outside of work are important to you and your family. Of course we don't stop at that- we gain a thorough understanding of what details you expect from your employment- be that your physician salary, particular benefits, time away from work, and any other special features you would like. While some clients have already been contacted by potential employers or have heard about possible job openings from colleagues, we not only assist you in pursuing those jobs, but we also go a step farther. We help you explore all other potential jobs so that you can rest easy knowing all viable options have been unveiled and you are not missing out on a job that may be a better match for you. In addition to seeking out all potential physician employment options, we follow through on every critical step of the physician job search process- from keeping in touch with potential employers and scheduling your interviews, to providing a detailed legal analysis of all contract offers you receive and suggesting favorable changes.

To learn more about how we can assist you in this very personal, and important process, contact Leigh Ann at 317-989-4833 or loneill@lauthoneill.com.

ATTORNEY ADVERTISING

Physician Contract Reviews: Keys to a Good Deal

In my years as a health care lawyer, I have reviewed many physician employment contracts for clients. I have also worked for hospitals and other employers in drafting the offers they make to physicians. This experience has given me the benefit of knowing both sides' angles in this process. After a long and laborious job search process, the acceptance of a physician's first employment offer is often a foregone conclusion. Unfortunately, not only do many physicians take the first set of terms offered to them, but many physicians do not seek legal advice at all.  After seeing how incredibly different the second version of a contract can be from the first, I cannot urge physicians enough to hire someone to do this important work on their behalf.

The makings of a good and fair physician employment contract include balanced terms, fair market value compensation, and benefits such as health, life and disability insurance, and reimbursement for various typical business expenses. Of course this list is not inclusive, but only mentions some of the points a physician lawyer will be looking for when reviewing an employment agreement.

The "take-home" point for physicians, especially those straight out of residency or fellowship, is that having a legal review of your employment offer will pay for itself many times over.  New physicians often don't take advantage of the bargaining power they have, and a formal legal review can provide exponential benefits.