Negotiate your employment agreement after residency

A lot is happening when graduating medical residents are looking for employment after completing graduate medical education. They are finishing their residencies, taking the specialty boards, and trying to decide where they will be spending the rest of their lives. Considering a new job offer can be both exciting and stressful. It is natural in such circumstances to focus on what the job promises, where it is located, and how much it pays—and easy to overlook the fact that they should be spending just as much effort in checking out a potential employer’s “credentials” as the employer is in checking out theirs.  Newbie physicians should remember that what potential employers have done in the past may be a far better predictor of what to expect from them than any promises they make.

Medical residents seeking employment after graduate medical education should ask many questions about a proposed job: What would the duties be, including non-patient care duties?

When would the newbie physician be expected to take call, and what would that involve? How are call duties determined and assigned? If pay is based partly on productivity, how would that be measured? How are patients assigned? Would the newbie physician be replacing someone who has left the practice? If so, the physician should try to get that person’s name and ask why he or she left. The newbie physician should then follow up with a call to that departing physician to hear what he or she has to say.

Graduating medical residents should find out everything they can about what the practice is truly like. How much physician and support staff turnover has there been? How profitable is the practice? Does the practice have or will it soon have heavy buy-out or deferred compensation obligations to retired partners? What is the practice’s medical malpractice history? Are there any lawsuits pending against the practice? Are the practice’s physicians trained in proper documentation and billing? Does the practice have a commitment to regulatory compliance?

In meeting existing physicians in the practice, a graduating medical resident should find out how long the other physicians have been there, what the patients are like, how physician extenders are used, how often the physicians are on call, what the volume of work is, and anything else he or she can think of that will affect day-to-day life in the practice. They should be sensitive to the “feel” of the place. Do the physicians and staff seem happy or tense? What is the reputation in the community of the physicians in the practice?

A graduating medical resident may be offered a generally favorable employment agreement containing most if not all of the provisions requested by the graduating medical resident, but if his or her employer can terminate it “at will,” it is not worth much. The time to make sure the agreement is worth the paper it’s written on is before a graduating medical resident packs up and moves to a new city.

It is not uncommon in employment situations to discuss various matters that do not end up in the written employment agreement. Since it is the written agreement that controls, if the matters which were discussed and agreed to have failed to find their way into the draft agreement, these matters should be clarified and inserted into the agreement.

Graduating medical residents often get into trouble by paying insufficient attention to the term of the employment agreement (i.e., the number of years it will run), the conditions for its renewal, and how and when it can be terminated. They do not want to be locked into a long-term employment agreement with no provision for salary increases and/or promotion and no way to get out of the agreement. Nor does a graduating medical resident want to be fired under a clause that allows the practice to terminate without cause on 30 days notice when the physician thought he/she had a two-year commitment and were expecting to be at that job for the full two years.

Many proposed physician employment agreements contain promises stating that if the newly hired physician leaves the practice, he or she will not compete with the former employer by practicing medicine within a specified geographic area for a particular period of time. A graduating medical resident needs to be wary of these non-competition clauses since they can prevent the physician from making a living in the community if his or her employment ends for any reason. These physicians would be much better off negotiating before the employment agreement is signed, a reasonable non-competition clause they can live with.

Graduating medical residents need to ensure that the employment agreement clearly states the group practice’s obligation to provide malpractice insurance for them at the practice’s expense.

The time for graduating medical residents to consult an attorney is before they have agreed to anything in writing. This includes the letter of intent (i.e., LOI) that they are asked to sign. When the physician has decided to accept a job and has received a proposed employment agreement, the graduating medical resident should send a copy of that agreement to his or her attorney without delay.

Because the health care field is highly regulated, physician employment agreements frequently have to comply with highly specific legal requirements that don’t apply to employment agreements outside the health care realm.  Consequently, a general business attorney, such as an attorney who handles real estate transactions for your family, may not be the right attorney to review your physician employment agreement or LOI. Just as there are physicians who specialize in different aspects of medicine, there are attorneys who specialize in health care law and, more particularly, in reviewing physician employment agreements.

Barney Cohen is a health care law attorney.

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