Ah! At last the dotted line. Hopefully by now you have the physician employment contract in your hand. This section helps you understand a Physician Employment Contract (PEC) also called Physician Employment Agreement (PEA). Also there are some things you want or do not want in a contract. We will go over all of that in this chapter.
Remember to read the Physician Employment Contract yourself, at least three to four times before you even send it out to your attorney for review. You may not be able to understand it the first time but by the fourth reading you will definitely have some idea.
Some of the contracts are written in a simple language, but others may be more difficult than reading the unabridged Shakespeare play. In the following pages, I will list some of the things you need to watch out for in a physician employment contract. Remember, if it is not written, it is not agreed upon.
This is not a legal advice and you must consult your attorney prior to signing any contract. The post is for informational purposes only.
Here are some of the essential components of an employment contract which you may find:
SALARY:
Your guaranteed salary should always be mentioned on the physician employment contract. Never ever sign a job contract without a written guaranteed salary (unless you don’t want a guaranteed salary!) .
Benefits are usually attached as an appendix to the contract. Click here for more on Benefits.
VACATION:
Do make sure that vacation time is clearly written out on the contract. Sick leave and CME leave should also be listed separately or documented as included if that is the case.
EXIT STRATEGY:
Both parties should be able to get out of the contract without any reason. Usually it requires a one to three months notice. Thus neither you nor your employer is trapped.
TERMINATION WITH CAUSE:
“Nothing is guaranteed if you do anything wrong”
This section allows the employer to terminate your employer for any reason listed in this section. Make sure all these reasons are justifiable and do not give the employer a free hand in firing you.
TERMINATION WITHOUT CAUSE:
“Nothing is guaranteed if you do anything right”
This section allows both parties to terminate the contract after giving a usual one to three month notice.
RESTRICTIVE COVENANT:
In case a physician employee leaves the practice, a restrictive covenant bars him for working in a predetermined area (usually 5 to 10 miles around the practice) for a limited period of time. ( one to two years usually).
RESPONSIBILITY:
Call schedule, weekend coverage, hospital coverage are to be divided equally among the physicians of same specialty. It should be written in the contract. A simple statement stating calls will be divided amongst the physicians in a practice is different than stating that calls will be divided EQUALLY.
EARNINGS FROM MOON LIGHTING, MEDICAL DIRECTORSHIP OR OTHER BUSINESS:
Many a times contracts will assign all your earnings from moonlighting, medical directorship etc to the company. That is not right. Your earnings from any other business except employment cannot be gobbled up like this. Make sure you get to delete any such clause.
BONUS FORMULA:
You should be making bonus once your productivity reaches beyond a certain mark. Usually it is in dollar amount of revenue generated by you. Sometimes it may be a number of patients seen or other methods to calculate a physician’s productivity. Whatever that formula is should be clearly written down in the contract. Do not accept verbal promises for bonuses.
PROFESSIONAL LIABILITY INSURANCE:
Employers have traditionally provided and paid for professional liability insurance for full time physician employees. That should be mentioned in the contract.
Try to avoid employers who do not pay for professional liability insurance. Even though it may be cheaper in your first few years of practice, it can go up significantly as you see more patients with each added year in practice.
