By Bert Black |
Five earlier posts on the Schaefer Halleen website provided:
- An introductory discussion of why legal counsel is important when a doctor is negotiating a contract
- A brief discussion of contract law fundamentals and basic provisions that appear in almost all physician contracts
- The promises doctors are typically asked to make when they enter into a contract, and the kinds of benefits and compensation they typically receive in return
- Provisions governing termination and severance pay
- Malpractice insurance, non-compete and non-solicitation provisions, and confidentiality and intellectual property rights
This post, the last in the Schaefer Halleen series of posts on physician contracts, discusses various miscellaneous provisions, such as legal rights and remedies if disagreements arise.
Contracts generally specify what law will apply if litigation ensues, and what court will get to decide the dispute. Sometimes arbitration is required, and sometimes there is a mandatory mediation procedure that must be followed before initiating either litigation in court or arbitration outside of a court.
The law allows for two kinds of relief if a contract has been breached: monetary damages, and injunctive relief, which means one side can get a court to order the other side to do or desist from doing something. For example, a terminated doctor might be ordered to stop soliciting patients, or from using allegedly stolen software.
Things like limits on post-employment competition with the former employer, soliciting patients or former co-workers, disparagement, or confidentiality may implicate both kinds of relief if disputes arise. Contracts sometimes include an explicit acknowledgement by the doctor about the availability of injunctive relief. They also may include what are called “liquidated damages” provisions, in which the parties acknowledge that the amount of monetary damages sufficient to compensate for a breach may be difficult to determine, and thus agree to a stipulated amount. For example, if the employer disparages the doctor after termination, the damages may be pre-stipulated. Provisions like this should be reciprocal, and if at all possible a stipulation regarding only what the doctor might have to pay should be avoided.
Several other kinds of provisions appear in at least some physician contracts. Most common are provisions specifying who owns medical records, and what the disposition of records will be if the doctor departs the employer. Occasionally a contract will spell out a doctor’s marketing obligations, or will make clear that the employer can use the doctor’s name in its marketing materials.
There also are occasions where the standard two-party contract paradigm does not fully apply. Emergency room physicians, for example, may be provided to a hospital by a third-party staffing company. The doctor’s contract will be with the staffing company, but it likely will contain provisions requiring compliance with the hospital’s policies, procedures, and standards. These contracts are also more likely to pay the doctor on an RVU basis rather than an annual salary, and they are less likely to include benefits like health insurance or payment for things like continuing medical education expenses. They may even require the doctor to obtain his or her own malpractice insurance.
Over the last week a series of six blogs on physician contracts has been posted on the Schaefer Halleen website. They’ve covered a variety of topics, but each stands on its own as an introduction on some aspect of the physician-employer contracting process. We hope the blogs have been helpful, and we encourage anyone with a question to call the firm for more details.
