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

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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.

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Gender Pay Gap Among Physicians

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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.

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Physician Contract Review Tips: Outside Activities Income

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In this installment in our Physician Contract Review Tips Series, we are addressing a type of provision that is included in nearly all physician employment contracts: the ability of the physician employee to participate in income-generating activities outside of the employment arrangement. This type of provision is important to those physicians who may wish to engage in activities such as, but not limited to, consulting, research, teaching, speaking, and even expert testimony outside of their employment agreement (hereinafter, "Outside Activities").  In the minority of physician employment agreements, this issue will go unmentioned, which may leave the physician employee open to participating in such Outside Activities.  However, in the majority of physician employment contracts, there will be a provision that limits the physician employee in one way or another.  In some cases, the agreement will stipulate that the physician cannot participate in any Outside Activities without the prior written consent of the employer.  Additionally, the provision may state that any income earned from Outside Activities, unless otherwise prior agreed to, will become the property of the employer.  In other instances, physician employment agreements will flatly prohibit the physician employee from participating in any Outside Activities whatsoever. Finally, in a third of various other possible scenarios, the physician employment contract might state that the physician employee may participate in certain Outside Activities, but all income earned by the Physician must be turned over to the employer.

As with nearly all physician employment contract provisions, the language addressing participation in and income earned from Outside Activities is typically negotiable. In some cases, we are able to narrow the restrictions initially set out in the agreement, or can carve out certain activities our client is interested in pursuing. Of course we always aim to amend agreements such that our clients can keep for themselves any income they earn.

For more information on how we can assist you with your physician job search or contract review, please call Leigh Ann at 317-989-4833 or email at loneill@lauthoneill.com.

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Physician Employment Contracts: What Really is in the Contract?

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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.

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Physician Contract Review & Negotiation: Make the Money Useful

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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.

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Value Added by a Physician Agent and Attorney

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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.

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

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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.

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

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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.

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Physician Contract Negotiations: Don't Miss Out!

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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.

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Physician Employment Contract Negotiation Tip: Look Out for Practice Location Terms

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In a time of decreasing reimbursement rates, it is becoming more and more popular for hospital systems and some larger private physician groups to open rural clinics and other types of practice sites. This trend is on the rise because reimbursement rates tend to be better in rural areas, and other regulatory rules are often relaxed for rural health care providers. Due to the influx in rural clinics and practice sites, physician employers are obviously faced with who will staff these additional locations. Of course, many employers simply hire physicians to work only in these rural locations, but other employers are staffing the locations with their physician employees who work the majority of their time in more urban practice locations.

Because it is often more difficult to find physicians who are willing to work only in the rural locations, the employers are faced with ways of staffing the rural practice sites with their urban physicians, and many times it ends up being the more junior physician employees who are called upon to commute to the rural locations on occasion. With this increasing trend, it's not surprising that many physician employment contracts these days are coming with provisions that require the physician to provide services at "any practice location the Employer owns or provides services." This is becoming one of the classic contract provisions that seems harmless and just like any other "standard" contract language, but it can bring significant discontent on the part of the physician once the job actually begins. While the physician employment contracts should always stipulate an actual address of the office location where the physician will be providing services, physicians should be weary of this additional "catch-all" sort of language that may require them to provide services at other office locations that may not have been specifically set out in the contract.  Keeping an eye out for this type of vague language and amending it to provide only specific requirements on the part of the physician is always a good idea so that the physician can begin his or her job and be confident there are not any unwelcome surprises down the road.

For more information on how Lauth O'Neill can assist in your physician job search or physician employment contract review, please contact Leigh Ann at 317-989-4833 or loneill@lauthoneill.com.

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Physician Employment Contracts: Termination Provision Tips

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One aspect of physician employment contracts that are often overlooked are the termination provisions. When physicians sign an employment agreement without having it reviewed by a health care lawyer, there is a good chance that the contact included unfavorable termination provisions. For instance, it is important for physicians to know how to protect themselves in instances where the employment arrangement terminates for some reason that is no fault of their own. Unfortunately, it is common for unfavorable contract terms, such as non-competition covenants, to continue to be enforceable despite the termination of the employment due to some fault of the employers. Many physicians find this possibility shocking, but this sort of language can be easily amended at the suggestion of a physician agent or physician health care attorney.

A second type of common and unfavorable termination provision is one that allows the employer to terminate the employment agreement without cause, even where no similar termination right is available to the physician. It is desirable for both parties to have a termination right that allows either party to terminate the agreement upon a breach by the other party of a material contract term and failure of the breaching party to cure the breach within a set number of days. A mutual term such as this is balanced and fair and is one example of the reasonable terms physicians want to negotiate into their employment agreements.

For more information on how we can assist physicians in negotiating their employment contract terms, please visit us at www.lauthoneill.com.

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Physician Contract Negotiation Tip #2: Know What You Want Out of Your Job

Many physicians, especially those fresh out of training, are hasty about accepting the first job offer that comes their way because they have enormous student loans to pay off, and they haven't yet endured a horrific employment experience that has taught them to tread carefully into any given employment arrangement.  After all, when you're out there looking for your first job, the potential employers are great salespeople- reassuring you that your wants and needs will be met. It's hard to make sure your wants and needs are going to be met when you're unsure about what they are exactly.  It is not uncommon for young physicians to feel that they don't have much wiggle room in terms of defining their employment arrangement.  To most, it seems as though you should just take what is offered, and don't rock the boat.  It is hard to know what you truly want from your employment when you've never been asked to define your ideal job.

But as a newly practicing physician, you have many more options than you think, and so it's important that you carefully consider what aspects of your employment are most important to you.  Maybe you have hundreds of thousands of dollars of student loans to pay off, so the highest salary possible, or even employer-funded repayment of the loans, is most important to you.  Or maybe you're into research, and so funding for your research work, and maybe even having one research day per week are important to you.  Or maybe you have a family, or want to have one soon, so a more flexible schedule is paramount to whatever salary is offered.  With employers growing more and more progressive in terms of flexible employment arrangements, it is important for physicians in their job search to carefully craft what their ideal employment opportunity will look like.  Knowing this crucial information up front will save you and your potential employer time and money down the road by ensuring that you will be happy in your employment arrangement, thereby limiting the possibility of needing to change jobs later.

Working with a physician agent in your job search process helps ensure that you have vetted all potential opportunities, and especially ensures that the employment arrangement you accept has been carefully shaped and molded to meet your needs and secure your financial and legal interests.  Contact Lauth O'Neill Physician Agency today to see how we can provide you valuable services, without you paying a dime until you start getting paid.  317-989-4833 or loneill@lauthoneill.com.