A physician employment agreement is a legally binding contract that outlines the terms of the employment relationship between a physician and a healthcare facility, organization, or practice. The agreement typically includes details such as the physician’s job duties, compensation, benefits, and any other terms of the employment relationship.  There are many different factors that can be included in a physician employment agreement, depending on the specific needs and goals of the physician and the employer.

 

There are many key areas that you may want to negotiate in a physician employment agreement. Here are some of the most common:

 

Compensation: This includes your base salary, bonuses, and any other forms of compensation, such as a sign-on bonus or relocation expenses.

 

Benefits: This includes things like health insurance, retirement plans, vacation time, and professional development opportunities.

 

Job duties: It is important to clearly define your job duties and responsibilities in the employment agreement. This will help to avoid misunderstandings and ensure that you are able to fulfill your obligations as an employee.

 

Schedule: You will want to negotiate a schedule that works for you, taking into account things like call coverage and any other commitments you may have.

 

Termination: You will want to discuss the terms under which your employment can be terminated, including any notice period or severance pay.

 

Non-compete clause: Many employment agreements include a non-compete clause, which prohibits you from working for a competitor for a certain period of time after leaving the company. You may want to negotiate the terms of this clause, including the length of time it applies and the geographic scope it covers.  (As of January 6, 2023, the FTC has proposed striking down all non-compete clauses from employment and independent contractor agreements.)

 

Intellectual property: If you are creating any intellectual property as part of your job, you will want to ensure that you retain ownership of it or that you are fairly compensated for it.

 

Confidentiality: Many employment agreements include a confidentiality clause, which prohibits you from disclosing certain information about the company or its clients. You may want to negotiate the terms of this clause to ensure that it does not unduly restrict your ability to pursue other opportunities or engage in professional activities outside of work.

 

 

There are several reasons why physicians should negotiate their employment agreements:

 

To protect their own interests: An employment agreement is a legally binding contract, and it is important to ensure that the terms of the agreement are favorable to you as the physician. Negotiating the terms of the agreement can help you to protect your own interests and ensure that you are fairly compensated and treated as an employee.

 

To ensure that the terms of the agreement are clear: Negotiating the terms of the agreement can help to ensure that there is no confusion about your duties and responsibilities as an employee, as well as any other terms of the agreement. This can help to avoid misunderstandings and conflicts down the road.

 

To have a say in terms of the agreement: By negotiating the terms of the agreement, you have the opportunity to influence the terms of your employment and ensure that they are aligned with your professional goals and needs.

 

To potentially secure better terms: By negotiating the terms of the agreement, you may be able to secure better terms, such as a higher salary or more favorable benefits package.

 

It is important to note that while you may want to negotiate certain terms of the employment agreement, you should also be mindful of the needs and interests of the employer. It is often helpful to work with a lawyer or a professional negotiator to help you navigate the negotiation process and advocate for your interests.

 

Conversely, there are a number of reasons why companies may utilize physician employment agreements:

 

To clearly define the terms of the employment relationship: An employment agreement helps to clearly define the terms of the employment relationship, including the duties and responsibilities of the physician and the compensation and benefits being offered. This can help to avoid misunderstandings and conflicts between the physician and the employer.

 

To protect the company’s interests: An employment agreement can be used to protect the company’s interests, such as by including a non-compete clause that prevents the physician from working for a competitor for a certain period of time after leaving the company.

 

To attract top talent: A well-crafted employment agreement can be used as a tool to attract top talent, by offering competitive compensation and benefits packages and outlining opportunities for professional growth and development.

 

To comply with regulatory requirements: Several regulatory requirements may apply to physician employment agreements, such as anti-kickback laws, Stark law, and HIPAA. An employment agreement can help a company to ensure that it is in compliance with these requirements.

 

It should also be noted that many regulatory requirements may apply to physician employment agreements, depending on the jurisdiction in which you work and whether you are employed by a physician group practice or a hospital system. Some of the most common regulatory requirements include:

 

Anti-kickback laws: These laws, designed to prevent fraud and abuse in the healthcare system, prohibit physicians from receiving financial incentives in exchange for referring patients to certain facilities or services. It is important to ensure that your employment agreement does not violate these laws.

 

Stark law: This law, also known as the physician self-referral law, prohibits physicians from making referrals for certain designated health services (DHS) to entities with which they have a financial relationship, unless an exception applies. It is important to ensure that your employment agreement complies with the Stark law.

 

Fraud and abuse laws: Several federal laws prohibit fraud and abuse in the healthcare system, including the False Claims Act, the Anti-Kickback Statute, and the Physician Self-Referral Law (Stark Law). It is important to ensure that your employment agreement does not violate these laws.

 

Licensing requirements: Depending on the state in which you work, you may be required to hold a valid medical license in order to practice medicine. It is important to ensure that you meet all licensing requirements before entering into an employment agreement.

 

Professional liability insurance: Many employment agreements require physicians to carry professional liability insurance, which covers them for any claims arising from their medical practice. It is important to understand the terms of your insurance coverage, including the limits of liability and any exclusions.

 

HIPAA: The Health Insurance Portability and Accountability Act (HIPAA) sets forth certain requirements for protecting patient health information, including requirements for the use and disclosure of such information. It is important to ensure that your employment agreement complies with HIPAA.