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          Audrey Becker 
          2341 Seven Pines Suite 5
          St. Louis, MO 63146

Phone: 314.878.6888
Toll-free: 877.583.3255
Fax: 314.878.1827
Audrey@ObOnly.com

Business Expenses

It is generally accepted that the practice will pay most of your employment-related general business expenses, including professional liability insurance, hospital staff fees, professional society dues, professional books and journal subscriptions, CME costs, and sometimes work-related auto expenses.

If the practice’s malpractice policy is maintained on a claims-made basis, one of the most important issues to be detailed in the contract is whether or not the practice will pay for your tail coverage. (See “Malpractice Insurance” section.)

Benefits

Benefits should be detailed within the contract, as these often constitute trade-offs for your salary. Most group practices will offer you a range of benefits, including basic health and medical insurance for you and sometimes for your family, group term life insurance, participation in the practice’s retirement plan, and possibly disability insurance. If the practice has a retirement plan, the contract should explain when you will become eligible to participate and how contributions will be made.

Benefits are sometimes delineated in an Addendum to the main contract.

Vacation/CME/Sick Leave/Paid Time Off

The standard for paid vacation during your first year of employment is two to three weeks, with an additional week for CME, professional meetings, or Board exams. These weeks may be bundled into total time off, or may be allocated specifically.

Vacation time and professional time off usually increase with the length of employment; however these periods are almost always less than partners’ shares. Total paid absence often increases to four or five weeks during the second 12 months of employment, and then levels off at about six weeks, at least until you become a co-owner.

The contract should also explain how much sick pay you will receive during each year of employment. Fifteen to 30 days of paid absence for illness or disability is standard. Pregnancy-related leave is usually treated as a disability under the practice’s sick and disability leave policy.

Senior’s Death or Disability

If you are joining a solo practitioner or a group practice that has only one owner, the contract should state what will happen if the senior physician dies before you or another doctor attains co-ownership. The contract should give you the option to purchase the practice in the event of the senior’s death or permanent disability. The financial and payment details should be worked out in broad terms in the contract, and these should be arranged so that you can reasonably meet the payment schedule.

For multi-owner group practices, such a provision is unnecessary, because other partners will typically buy out the departed individual’s practice interest, according to the current buy/sell arrangements.

Partnership

Generally, employers do not like to include in the initial contract a commitment to allow an employee to become a partner. Instead, the partnership or buy-in is presented in terms of “may” rather than “will.” Partnership is seldom considered before two years of employment. Sometimes Board Certification is a requirement.

Look for at least a broad outline of the process and terms that will be used to evaluate your potential for co-ownership. The general terms should explain how the price of practice shares will be determined, the formula to be used to set the dollar value of the shares, and how many shares may be purchased.

Alternatively, some practices might tell an incoming physician that if he or she works as an employee for five (rather than two) years, partnership will cost nothing. The wait is sometimes called “sweat equity.”

Non-Compete Clause

Most employers insert a “non-compete clause” or “restrictive covenant” in the contract. This provides that, if the incoming physician leaves the employer, he or she will not practice within so many miles of the employer (“restricted area”) for a number of months or years (“restricted period”). Employers like these clauses because they do not want someone to work for them for a few years, leave, and take the patients. Obviously you would do better with no restrictive covenant in the contract, but since you are likely to find it there, be sure to have it reviewed by an attorney familiar with the laws of the state.

Attorney Review

Find an attorney who is familiar with medical contracts. If possible, find an attorney familiar with the laws of the state in which you will be working. Ask in advance what the charges will be for reviewing a contract of a specific length.

Your attorney’s job is to review your contract, interpret the law, and offer advice. It is not to negotiate on your behalf. Ask that your lawyer write his or her evaluation of the contract. Request a listing of the good provisions as well as the bad. Ask for written suggestions on how the “bad” might be remedied. Be sure that you understand your attorney’s points. Then you - yes, you - must negotiate for yourself. You are the person the practice wants. You are the doctor they admire. You are far more likely to achieve their cooperation than is your attorney.

The quickest way to reach a stalemate is to send your attorney to meet with their attorney. Attorneys are trained to argue and win. What you want is negotiation leading to a fair deal for all concerned, and you can best achieve that with your own persuasion.

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