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Deadly sins you CANNOT afford to make when signing an employment agreement

Posted by Doris Dike | Feb 28, 2022 | 0 Comments


Clinicians are extremely bright individuals who are accustomed to making life-or-death judgments in their fields. Because of this, many people find it challenging to recognize that they may require assistance in protecting their own and their family's interests when entering into a legally binding arrangement that will have implications for both their professional and personal lives for many years to come. A lawyer with extensive expertise with medical contracts is familiar with the traps, loopholes, and specific legal meanings that courts or legislation have assigned to what appear to be regular English language to the untrained eye of the public. Such a lawyer has been taught to identify ambiguities in contracts and to recognize contract words that should be included but are not. Just as clinicians would not rely on attorneys to diagnose a disease, they should not rely on their competence to examine or design a critical contract when it comes to crucial contracts.


Before taking any job do your research. During the interview process, clinicians should ask several questions about the potential position, including; What would be the responsibilities, including non-patient care responsibilities? What would be expected of the clinician when he or she is called on call, and what would it entail? What criteria are used to determine and allocate call-duty responsibilities? If compensation is based in part on productivity, how would it be measured? What method is used to allocate patients? Is it possible that the clinician will be taking over for someone who has left the practice?

While interviewing the other clinicians in the practice, a clinician should inquire about how long they have been there, how the patients are treated, how often clinician extenders are called, what the volume of work is, and anything else he or she can think of that will affect the day-to-day operations in the office. They should be attuned to the "vibe" of the area they are visiting. Do the clinicians and staff appear to be in good spirits or tense? What is the reputation of the clinicians who work in the practice in the local community? Finally, Google is your friend here. Before taking any job, please google the company and its owners!



Many clinician employment contracts have traditionally included pledges that if the newly recruited doctor quits the practice, he or she would not compete with the previous employer by practicing medicine within a certain geographic area for a set length of time. In 2004, the federal government issued laws prohibiting such limits when a hospital (or other organization from whom the clinician may purchase auxiliary services) offers a guaranteed income or other financial incentives to entice a clinician to operate in its city. If a clinician agrees to such a contract and later admits a Medicare patient to the hospital or requests lab tests, x-rays, or other services from it, the clinician (as well as the facility) will breach the Stark anti-referral legislation, according to these laws.

Even if there is no salary guarantee or financial incentive from the hospital, non-competition provisions should be avoided since they might preclude a clinician from making a livelihood in the community if his or her employment terminates for any reason. In other words, clinicians who willingly or involuntarily quit their present job and try to start a new practice or join another practice may be sued by their previous employer to prevent them from doing so. Before signing the employment agreement, these clinicians would be far better off drafting a fair non-competition clause that they can live with. A lawyer will know if their state's law allows such agreements not to compete, and if so, what non-compete would be found fair and so enforceable by the courts (in most states where they are allowed).

It may be a sign that the wording in a contract is confusing if you have to read it twice to figure out what it means. Even though a provision appears to be obvious, there may be another way to view it that causes problems. Clinicians do not want to be in a situation where they believe they are committed to performing one thing but their boss believes they have pledged to do something other, or when their understanding of their time obligations differs from their boss's. Because attorneys are educated to be alert to various alternative interpretations in language, this is an area where a lawyer's advice is required.

New clinicians sometimes get themselves into problems by failing to pay attention to the contract's length (i.e., how many years it will last), the requirements for renewal, and how and when it might be canceled. They don't want to be bound into a long-term contract with no room for advancement or compensation rises and no way out. They also don't want to be dismissed under a condition that permits an employer to remove someone without cause on 30 days' notice, even though they thought they were signing a two-year contract and expected to stay for the entire time.



It is not unusual for numerous issues to be discussed in the workplace that does not end up in the formal employment agreement. A clinician, for example, may have been told that he or she will have to accept weekend calls once a month, but the contract states: "Clinician's professional duties shall include night and weekend call-in line with the practice's rotation." Alternatively, the clinician may have been told that all hired clinicians are entitled to a yearly cost-of-living raise, but the contract is quiet on the subject. Because the written contract is the one that governs, if the number of call duties or the cost-of-living adjustment matters to the clinician, they should be specified as accurately as possible in the contract.


In these days of growing malpractice insurance costs, clinicians must ensure that their employment agreements show the employer's commitment to offering malpractice insurance at no cost to them. The contract should define the amount of insurance to be supplied, and it should be enough to cover a clinician's assets as well as fulfil any applicable state law requirements. If the state where the clinician will be practicing mandates an extra payment to a state reinsurance fund or comparable institution, the employer's duty to pay that should also be noted. A lawyer can advise the clinician on other important aspects of malpractice insurance, such as the limit of coverage and terms governing how the insurance company would conduct a legal defense if the clinician is sued.


Clinicians may overlook the need of ensuring that their employment contract clearly states their real job circumstances, including what they are expected to perform, where and when they are expected to do it, and what human and other resources will be made available to assist them. Clinicians should get these data down as soon as possible before discussing pay; otherwise, how would they know if they are being paid fairly for their work?


Even if a clinician has the nicest contract in the world, it is worthless if his or her employer can cancel it at any time. Before a clinician packs his belongings and relocates to a new place, he or she should double-check that the contract is worth the paper it's written on. Clinicians should pay particular attention to the situations that might lead to a termination, such as

●        Employer's 90-day notice period (or by either party)

●        Medical credentials are being revoked.

●        Any party's accusation of unlawful behaviour (e.g., fraudulent billing)

●        Any occurrence that the employer considers being harmful to the company.

●        Breach of contract on a "material" level (a lawyer can explain what this means)

●        Illness or handicap


Employed clinicians' pay is frequently dependent, at least in part, on a mathematical formula that considers factors such as the number of patients seen, the income the practice earns for those patients, new patients attracted by the clinician employee, and the practice's profitability. If the clinician's income is contingent on anything other than a simple wage, it is the clinician's responsibility to ensure that he or she understands the formula and that it is completely and properly stated in the employment agreement (or in a separate document attached to the agreement as an exhibit and incorporated into it by reference).

Clinicians should be aware that many clinician employment contracts include "clinician incentive plan" or "bonus" terms that are meant to protect the employers rather than the medical employee. The following are some of the factors that may hurt the flexible element of a clinician's compensation:

●        Provisions that empower the employer unilaterally to amend, or even terminate, the incentive scheme

●        The exact procedure for calculating the incentive part of a clinician's remuneration.

●        How important concepts are defined (for example, positive net income, negative variance, percentage, gross revenue, and so on).

●        Whether or not compensation is determined by factors that are within the employer's control and those that are beyond the clinician's control (e.g., assignment of patients with inadequate insurance coverage to the clinician; when a key element in the payment formula is actual dollars the practice receives for patients the clinician sees; compensation based on the net rather than gross income, which an employer can manipulate by paying the partners a higher salary to increase costs and thus reduce net revenue)

●        In establishing the estimate, how are practice expenditures weighed against practice revenue?

●        Before the incentive scheme takes effect, several conditions must be satisfied (e.g., practice site must meet certain net revenue or patient volume targets)

 Need help? Reach out to Dike Law Group with your health care employment contracts.

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