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.
Return
