Taking the Job in Skin Disease and CareEMPLOYMENT CONTRACT- The contract needs to be examined carefully, so it is prudent to hire a contract lawyer before you sign it
- It is best to find a contract lawyer with the following:
- Experience drafting and negotiating physician employment contracts
- Experience with contracts specifically in the dermatology field
- Knowledge of state-specific laws (especially if the contract lawyer is in a different state)
- Important elements in the contract:
- Termination Provision
- There are two basic types of termination clauses: ‘with cause’ (with good reason) and ‘without cause’
- ‘Cause’ is typically defined in the contract
- ‘Without cause’ enables the employer to terminate the contract with no stated reason by providing written notice in advance (often 30 – 180 days)
- Fair contracts with a ‘without cause’ provision allow the physician employee to do the same
- In ‘without cause’ terminations, be sure the notice period is long enough to allow for securement of other employment
- Restrictive Covenant
- Provision that precludes a physician from working in a specific geographic zone (ranging from one to several miles from the practice) for a given time period after the contract terminates
- Bonus
- If the physician employee’s production exceeds a specific threshold level (which is often 3 to 4 times the base salary), a percentage of collections in excess of the threshold amount goes to the employee as a bonus
- Partnership
- There may or may not be a track to partnership
- If partnership track, there is typically a ‘buy in’ amount
- Fringe Benefits
- Typically includes health insurance, malpractice insurance, disability insurance, CME expenses and time off for CME/vacation, ± retirement plan
- Malpractice “Tail”
- If the practice’s malpractice policy is maintained on a ‘claims-made’ basis (see below), there should be a provision discussing who is responsible for ‘tail’ coverage of the departing physician (which can be very expensive) if the employment contract terminates
- There are two types of medical malpractice insurance coverage: occurrence and claims-made
- Occurrence:
- Protects a physician from any incident while the policy is in force
- Does not matter whether the physician is covered when the suit is brought
- No need to buy ‘tail’ coverage
- More expensive than claims-made coverage
- For example, a physician purchases an occurrence policy in 2006, sees patient X in 2007, and terminates the policy in 2008. In 2010, patient X sues the physician for an incident that occurred in 2007. The physician is covered by the occurrence policy (even though the policy has expired) since the incident occurred while the physician had the policy in effect.
- Claims-made:
- Protects against a claim as long as the physician is insured when the claim is reported to the insurance company
- Once the policy is terminated, coverage no longer exists unless ‘tail’ coverage is purchased
- ‘Tail’ coverage (also called Extended Reporting Period) provides coverage for any claim that is reported after the policy has terminated (incident must have occurred while the physician was insured with an active claims-made policy)
- For example, a physician purchases a claims-made policy in 2006. The policy is terminated in 2008 but ‘tail’ coverage is purchased. In 2010, patient X sues the physician for an incident that occurred in 2007. The physician is covered because ‘tail’ coverage was purchased.
- Less expensive than occurrence coverage
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