These materials are designed to alert physicians generally to significant legal and practical issues, and to identify possible areas of concern that may require specific legal advice and consultation. Because of changes, complexity, and scope of the many laws and regulations, as well as the differences in drafting and wording of various contracts, these materials are by no means exhaustive, and cannot be relied on to provide specific legal advice regarding a particular issue or area of concern. The reader is advised to seek independent legal advice as to particular issues and matters of concern that the reader may have.

___ 1. The Contract should sufficiently identify the party or parties responsible for payment so that you can investigate their financial strength, client base and reputation to determine that the arrangement will be beneficial for the physician.

___ 2. In addition to analyzing the financial strength of the prospective employer, the legality of the arrangement should be investigated. Some states have laws restricting the practice of medicine to physician and other specifically authorized entities. The physician should ensure that the employer is legally authorized to "practice medicine.

___ 3. The Contract should adequately and clearly describe the compensation structure.

Is it comprehensible? (If you cannot clearly understand the compensation and/or bonus formula, there is a strong likelihood that this will become a source of confusion and dispute.)

Can the fee structure be unilaterally modified or reduced by the employer? (Some contracts give the employer the discretion to periodically "adjust" or "review" the physician's compensation. This does not give the physician any assurance as to what the physician's compensation will be for any period of time.)

Who sets patient fees; and do patient fee determinations impact the physician's salary? (i.e., if the employer unilaterally reduces the physician's charges, will this reduce the physician's salary or bonus?)

___ 4. The Contract should adequately and clearly describe any benefits, relocation incentives, salary guaranties, signing bonus, moving expenses, etc., to which the physician will be entitled.

Is repayment of any of the benefits required if the Contract terminates?

Can the benefits be unilaterally reduced or eliminated by the employer?

___ 5. The Contract should require payment of the physician's compensation in specified intervals (i.e., weekly, bi-weekly, semi-monthly, monthly). It may also be desirable to provide meaningful incentives for timely payment (e.g., interest on past-due amounts.)

___ 6. The Contract should contain an explanation of the expectations and/or requirements regarding the physician's practice with respect to the physician's availability, hours, "on call" time, referral practices, staffing, equipment, etc.

___ 7. The Contract should describe any additional duties (i.e., administrative duties, participation on panels, etc.) that the physician is required to perform.

How much time will the physician be required to devote to such activities; will physician be paid for these additional duties; will the additional duties detract from the practice of medicine and/or effectively reduce the physician ability to earn compensation?

___ 8. The employer should provide the physician with detailed descriptions of its utilization review, quality assurance, peer review, and other policies and procedures to which the physician will be bound.

Many employment contracts contain only vague references to the "policies and procedures to which the employee will be bound". The employer should provide the physician with all of the company policies and other documents that relate to the Contract or are referred to in the Contract. The physician needs to review those policies and other documents to be sure that they are fair, and that the physician agrees to comply with them.

It may also be desirable to provide that any determinations of policy violations are appealable to unbiased third parties; and that the appeal process is inexpensive and efficient. However, based on the typical contract, the physician cannot determine whether the policies are designed to be fair or will result in arbitrary decisions and undue hassle.

Further, many employment contracts provide that the employer's policies may be amended by the employer at any time. The Contract should provide that the policies may not be amended without the consent of the physician. Alternatively, the Contract should provide that the physician be given advance notice and an opportunity to object to any undesirable amendments.

___ 9. The Contract should specify the amounts and types of insurance covering the physician and the employer that the employer is required to maintain. The Contract should also provide that the physician will be covered as an additional insured if the employer is covered under a separate policy. (The physician needs the Company to be able to pay its part of any damage claim.)

___ 10. If the Contract requires the physician to provide anything other than medical services (for example, the physician's participation on the peer review, utilization review, or quality assurance committees, the Contract should require that the employer maintain adequate liability insurance and reasonable compensation for such activities.

___ 11. The Contract should not require that the physician to indemnify or hold harmless the employer or any other party. Indemnity provisions impose the potential of personal liability on the part of the physician, and may also create malpractice coverage problems for the physician because the malpractice insurance policies may exclude contractual indemnities.

This concern not only includes the usual "indemnify and hold harmless" language, but would also encompass language in the Contract that states that "the physician is solely responsible for treatment given", and that "employer decisions do not alter the Physicians obligations". This type of language may be used against physician in situations where it is alleged that the employer's directions contributed to the patient's harm. These provisions are just as pernicious in their intent as the indemnification and hold harmless provisions. Such provisions represent an attempt to shift responsibility for the results of improper employer decisions onto the physician.

___ 12. The Contract should not hold the physician to a standard of medical practice higher than "a reasonable physician acting under the same or similar circumstances."

___ 13. Can either party unilaterally terminate the contract "without cause"? Even if the Contract is for a specified term, many employment contracts provide that either party can unilaterally terminate the contract "without cause"?

"Without cause termination" provisions are typical in employment contracts, and provide that the physician may be terminated at any time -- for no reason at all. While this provision would allow the physician to escape from an undesirable employment situation, "without cause" termination provisions give the physician no assurance that the Contract will not be terminated at any time.

___ 14. The Contract should ensure that termination of the Contract "for cause" only be for "material cause", that the physician be given a reasonable period of time to cure and breach, and that the determination that "cause" exists be subject to some type of limited review by an unbiased panel of physicians who are experts in the area of medical practice that is involved.

___ 15. The Contract should provide that, after termination of the Contract and until the employer has made medically appropriate referrals of patients who continue to need the physician's services, the employer shall continue to pay the physician for services that the physician renders to such patients. (Physicians can't abandon patients just because of termination of the Agreement.)

___ 16. The Contract should prohibit the employer from disclosing any information provided by or about the physician in connection with any credentialing or peer review deliberations, unless such disclosure is otherwise required by law.

___ 17. Does the Contract contain any noncompetition agreements?

Many physicians believe that they are not enforceable; however, they are enforceable in many instances.

Is the physician willing to be bound to the provision in the event that it is enforceable?

Is the physician willing to litigate the provision in order to determine its enforceability?

Would the enforcement of a noncompetition agreement result in any peripheral consequences (such as the immediate repayment of an income guaranty)?

___ 18. The Contract should address the Physician's access to records after termination.

___ 19. The Contract should clearly describe any "Partnership" potential.

Are the provisions comprehensible?

Is a "Buy-in" expected?

Are the provisions sufficiently detailed to be applied?

___ 20. The Contract should expressly incorporate all inducements and promises that the employer made to the physician about the plan and its operation (i.e. verbal assurances and representations that attracted the physician's attention, or that was a material influence in convincing the physician to enter into the Contract.)