W W W. D I N S L A W. C O M October 8, 2008 Physician Employment Agreements Stacey A. Borowicz, Esq. Dinsmore & Shohl LLP 191 W. Nationwide Blvd. Suite 300 Columbus, Ohio (614)

© 2008 Dinsmore & Shohl LLP Gross Anatomy of an Employment Agreement n Term and renewals n Work duties and call schedule n Compensation- fixed salary vs. productivity n Benefits n Future opportunities

© 2008 Dinsmore & Shohl LLP Contract Review n Seek legal review – Attorney with healthcare experience – How long will the review take – Will you or the attorney negotiate terms – Expected legal fees

© 2008 Dinsmore & Shohl LLP Term n Fixed Term n Note contingencies – Licensure – Board certification – Hospital & payer credentials n Option to renew or automatic renewal n Notice for termination or non-renewal

© 2008 Dinsmore & Shohl LLP Work Duties n When do I work? n Where do I work? n What am I responsible for? n Who helps me? n What can I do when I am not at the office? – Can I get paid for it?

© 2008 Dinsmore & Shohl LLP Compensation n Annual salary- fixed each year n Productivity only – “eat what you kill” n Combination of salary and production

© 2008 Dinsmore & Shohl LLP Productivity n Regular pay = draw n Billings vs collections n Expenses – Variable = by production – Direct = individual – Fixed = equal n Reconciliation

© 2008 Dinsmore & Shohl LLP Other Compensation n Bonus – Signing Bonus – Annual Bonus n Discretionary n Based on production – Receipts > threshold amount – Percentage share of practice profits n Start-up costs – Reimburse moving expenses – Reimburse portion of student loans

© 2008 Dinsmore & Shohl LLP Benefits n Insurance – Health insurance (single vs family) – Life, disability, accident insurance n Retirement plans – Eligibility – 401(k), profit sharing, pension plans – Employer contribution or match – Vesting

© 2008 Dinsmore & Shohl LLP Benefits n Disability Leave and Insurance – How long can you be off? – What will you get paid? – Maternity leave n Time off (vacation and sick time) – Scheduling, notice, priority of requests, carryover n CME – Paid time off – Reimbursement of expenses

© 2008 Dinsmore & Shohl LLP Benefits n Reimbursed Expenses – Medical license fees – Board exam fees – Medical associations – Medical staff fees – Office and computer equipment – Books and Journals – Cell Phone & Pager – Parking – Mileage or auto allowance

© 2008 Dinsmore & Shohl LLP Malpractice Insurance n Occurrence Policy n Claims made Policy n Tail Coverage – Who pays – Based on termination n Nose Coverage – An issue if you don’t have tail paid

© 2008 Dinsmore & Shohl LLP Termination n Without cause – By who – Notice required (affects term) n With cause – Specified circumstance – Good cause (reasonable standard) – Notice

© 2008 Dinsmore & Shohl LLP Limitations & Covenants n Medical Records – Record belongs to practice, information belongs to patient – Right to use post termination n Non-Solicitation – Patients – Employees

© 2008 Dinsmore & Shohl LLP Limitations & Covenants n Non-compete provisions – Presume will be enforced – In Ohio, covenant must be reasonable – Geographic restriction – Temporal restriction – Damages

© 2008 Dinsmore & Shohl LLP Recruitment Agreements n Separate contract and loan from hospital n Guarantees salary and covers incremental practice expenses n Physician personally responsible to repay loan at end of guarantee period n Additional years of service = forgiveness of loan

© 2008 Dinsmore & Shohl LLP Negotiating Strategy n READ your contract! n Seek your own attorney review n Ask questions n Negotiate for what you want n Request all changes and terms in writing n No signature until contract is in final form

© 2008 Dinsmore & Shohl LLP Next Phase - Shareholder, Member or Partner status n When does it happen? – Set time or individual performance – Example: 2 yrs or $300K AR n How much does it cost? – Valuation: book value, fair market value, set value – Hard assets vs soft assets – Hard buy-in vs soft buy-in n What does it mean? – Share of profits and liabilities – Income continuation – Buy-out

W W W. D I N S L A W. C O M Stacey A. Borowicz, Esq. Dinsmore & Shohl LLP 191 W. Nationwide Blvd. Suite 300 Columbus, Ohio (614)