PHILADELPHIA—“Every contract is like a good recipe; it has certain things that should be in it, and certain things that should not,” says healthcare attorney Joan Roediger, a partner with the Philadelphia law firm of Obermeyer, Rebmann, Maxwell, & Hippel, LLP, and member of the firm’s Healthcare Practice Group. Roediger led the session, “Contract Negotiations for Young Physicians,” presented at the ACR Annual Scientific Meeting in October 2009, by summarizing key issues for young physicians encountering their first foray into employment contract negotiations. Three other presenters at the session addressed opportunities in the industry, private practice, and academic sectors.
All the Zeroes Correct
Understandably, young physicians eagerly peruse their first employment offers to “make sure all the zeroes are correct” in their compensation packages, said Roediger. But other ingredients are just as vital in the recipe of a good contract, and can have consequences that are as far reaching as the base salary and bonuses. Most commonly, the employment process begins with a letter of intent, a document that sets out the terms of the prospective employment agreement. Make sure those key words, “not legally binding,” appear in the letter of intent, Roediger advised physicians, lest you be held to the terms of the letter. She urged participants to consult with an attorney and to ensure they feel comfortable with its terms before signing. “It’s bad form,” she said, “for you to sign the letter of intent and then come back and try to renegotiate the points you already agreed upon.”
Additional legal assistance is mandatory for negotiating a hospital assistance agreement, she asserted. “Nothing gives me more gray hair” than these complex agreements, she noted, because they are often three-way contracts between a physician, a practice, and the hospital that agrees to underwrite the costs of bringing the physician to the community. But watch out: in return for paying moving expenses, a signing bonus, helping with malpractice insurance, and other costs, the hospital often extracts commitments from physicians to stay in the community, and may demand reimbursement if the situation does not work out.
Employment agreements should always clearly state the term of employment and the start date—and make sure you allow yourself some leeway after training and do not have to show up July 1 at your new job, Roediger advised. Other typical clauses address contract renewal periods; termination with and without cause; and stipulate additional expenses to be paid by the practice (medical and Drug Enforcement Administration licenses, hospital staff fees, continuing medical education and society dues, and pager and cell phone costs tend to be standard, Roediger said).
