The medical profession is evolving rapidly, with significant recent legislation governing patient privacy (HIPAA) and insurance coverage and practice (The Affordable Care Act), all influencing how physicians and medical health professionals, and their employers, operate on a day-to-day basis.
Less Independence
The old model of independent practitioners forming clinical practices and offering services to hospitals on a fee for service basis with significant independence is evolving toward more employer-employee arrangements, with greater oversight of all clinical services by hospital or clinical administration. Moreover, the provision of care to patients is now generally subject to “productivity” measures in these relationships, rewarding proactive medical intervention and devaluing preventative care.
Physicians in every general practice and specialty area need sophisticated legal advice to assist them in navigating through these changes and ensuring that their workplace rights are fully protected. Schaefer Halleen is committed to staying abreast of all of these developments and this blog post is intended to highlight these issues on an ongoing basis. This post identifies two legal issues that often arise in establishing and enforcing employment contracts for physicians.
Focus on Physician Contracts
First, it is critically important for these contracts to be very clear, for both sides, on expectations, how performance is to be measured and evaluated, when and how a potential termination event can occur, what benefits are to be provided in this unfortunate circumstance, and what, if any post-termination restrictive covenants can be enforced. Clarity at the outset of these relationships benefits both sides, and reduces the risk that difficult disputes will arise during the employment relationship.
Increased Performance Pressure
Second, when performance-based issues arise, the process to follow in evaluating clinical competence, and invoking the peer review process, if necessary, should be crystal clear and largely self-executing. Moreover, the employment agreement should not be silent on this topic, as this will result in a default to the hospital bylaws or credentialing/privileging/peer review policies, often with difficult and unintended consequences for the physician. Without these rights specified in the employment agreement, Minnesota courts have held that staff bylaws do not constitute enforceable contracts with physicians, leaving the administration free to amend these bylaws or deviate from them without legal contractual recourse to the affected physician. See Medical Staff of Avera Marshall Regional Medical Center v. Avera Marshall, 836 N.W.2d 549 (Minn. Ct. App. July 22, 2013).
Finally, even without contractual protections in place, the failure to adequately follow the procedures specified in the peer review process (and ensure that reviewers are fully independent) can lead to a malice finding, exposing the offending hospital to both liability and injunctive relief. See In re: Peer Review Action, 749 N.W.2d 822 (Minn. Ct. App. June 3, 2008).
Future blog posts will explore these and myriad other legal issues affecting medical professionals in greater detail.
Over the course of his twenty-five year career, Larry has taken on some of the largest and most powerful companies in the country, helping tens of thousands of people recover damages suffered as a result of illegal corporate conduct. Larry has a strong focus delivering services to physicians and mental health professionals, having represented hundreds of clients in mental health and medical services. He chose this field of practice to give a voice to victims of workplace misconduct and tirelessly pursues claims for his clients to recover full damages as a result of illegal conduct.
