1. 1 © 2000 American College of Radiology Physicians Employment Contracts How to Survive Your First Contract Thomas R. Hoffman Associate General Counsel American College of Radiology Wednesday, August 3, 2006 Written and compiled by Leonard L. Lucey, J.D. ACR Quality and Safety Department

2. 2 © 2000 American College of Radiology doctor (docter), n. any of a number of medical professionals who use a variety of therapies to make sick people well enough to sue

3. 3 © 2000 American College of Radiology Types of Contracts Individual Physician - Group (primary contract) Group - Hospital Managed Care Contracts

4. 4 © 2000 American College of Radiology Terms of the Contract Generally one year with automatic renewal One year provision allows either party to terminate –if the relationship doesnt fit –if business expectations change –tax requirements

5. 5 © 2000 American College of Radiology Terms of the Contract Automatic renewal = continued relationship Renegotiation - compensation (automatic increase)

6. 6 © 2000 American College of Radiology Partnership/Shareholder Status Specify number of years Special criteria –buy-in –terms Effect of changing business conditions Failure to meet expectations -- notice

7. 7 © 2000 American College of Radiology Compensation Specify amount and basis Call: included or extra Hours of employment, i.e., full-time Automatic increases Relocation expenses

8. 8 © 2000 American College of Radiology Compensation Outside compensation –speaking at seminars –honoraria –reserve duty pay –patents or inventions

9. 9 © 2000 American College of Radiology Contributions to Hospital Donation to Deans fund Administrative/equipment/space rental fees Percentage of income –potential anti-kickback concerns Check for provision in contract between group and hospital; consult with dept chair

10. 10 © 2000 American College of Radiology Responsibilities Maintenance of professional licensure Availability for call - rotation Record keeping - paperwork Serving on hospital committees Membership in professional organizations

11. 11 © 2000 American College of Radiology Responsibilities Compliance with department and hospital written policies Work assignment schedule -- more than one location? Meeting performance expectations Training/CME –accreditation requirements

12. 12 © 2000 American College of Radiology Benefits Vacation, personal days, sick days Retirement plan –vesting –contribution - percentage Dues - licensure and professional organization membership

13. 13 © 2000 American College of Radiology Employer Control Issues CME and attendance at seminars Right to assign work schedule Additional training Right to amend personnel policies or benefits

14. 14 © 2000 American College of Radiology Non-Compete - Restrictive Covenant Clauses General purpose -- protect employer Requires consideration or value to employee

15. 15 © 2000 American College of Radiology Non-Compete - Restrictive Covenant Clauses Must be reasonable –cover specific geographic area –specific time period 3 to 5 years Restrictive covenants prohibit employee from providing services to named hospitals, HMOs, MCOs or within specific area Not valid in all states

16. 16 © 2000 American College of Radiology

17. 17 © 2000 American College of Radiology Medical Research - Publications Right to any compensation Ownership rights to patents, copyrights Royalties If done through employer, work for hire Access to patient records

18. 18 © 2000 American College of Radiology Termination Provisions Just cause - define –loss of licensure or staff privileges, competency Employment at will - no cause needed Changing business environment Effect on privileges: check for clean sweep

19. 19 © 2000 American College of Radiology Termination Provisions Any notice requirement Severance package Relocation expenses

20. 20 © 2000 American College of Radiology Termination Provisions Tail coverage Death benefits Liquidated damages

21. 21 © 2000 American College of Radiology Review All Documents Contract may refer to other documents -- part of the contract by reference Managed care contracts may affect your compensation Group contract with hospital

22. 22 © 2000 American College of Radiology Points to Remember Contract is legally binding - dont sign unless sure Verbal contracts may be legally binding but difficult to prove Ask questions You can negotiate -- modify provisions Strongly recommend legal review

23. 23 © 2000 American College of Radiology Helpful Hints Know the environment - visit the group –talk to others in the hospital –what is the groups reputation? –stability of the group -- internal disputes?

24. 24 © 2000 American College of Radiology Helpful Hints Know the environment (contd) –any merger or takeover rumors? –are you replacing someone -- how often is there turnover? –how much of the groups practice is managed care contracts, capitated? Dont sign contracts with multiple groups -- subject to damages

25. 25 © 2000 American College of Radiology Helpful Hints Hold off making major purchases until youre certain the arrangement works –buying a home –investing in property –buying a car

26. 26 © 2000 American College of Radiology Helpful Hints What is appropriate compensation? –AMA/MGMA surveys –check with other residents

27. 27 © 2000 American College of Radiology