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MEDICAL SCHOOL AL SCHOOL
MEDIC MEDICAL SCHOOL
TRAINING
TRAINING TRAINING

ment. Make sure you don’t have to pay anything if the employer choos- Termination Without Cause: This provision allows the employer
es to end your employment without cause, which is discussed below. or you to end your employment by giving minimum notice. No rea-
son need be given. It is merely for convenience. The minimum notice
Hospital Assistance: Hospitals will loan money to a practice add- should be the same for the employer and you. The typical minimum
ing a newly-trained physician. These arrangements are documented notice is 60 to 90 days. Keep in mind that if you give the notice, you
by a separate, complex recruiting agreement and a promissory note. must work all the days you have been scheduled to work or the employ-
The loan will cover the physician’s salary for the first year and perhaps er could ask you to reimburse it for added costs to cover your absence.
other added costs. The loan must be repaid with interest, but if the Along that line, many employers insist in the contract that you pay for
recruited physician remains in the hospital’s service area for a mini- unworked days during the notice period, such as $500 per day.
mum period, such as three or four years, the loan will be forgiven. If
you are receiving this type of assistance, it is important to coordinate Effect of Termination: If your pay depends on collections, you will
the hospital’s recruiting agreement with the employment agreement, want to make sure that the collections the employer receives after the
to clearly establish who is responsible for repaying the hospital if the end of your employment will be credited. Usually, this arrangement
loan isn’t forgiven. credits collections that arrive during the 90 days following the end of
employment.
Benefits: Most employers provide group health insurance coverage
of you at no cost. You can add coverage of your spouse and dependents Noncompete: Employers do not want former physician employees
at your cost. Employers also regularly offer the opportunity to par- to compete after the end of employment. Consequently, your employ-
ticipate in retirement plans and may contribute a percentage on your ment contract will contain a noncompete. Until recently, it could be
behalf. Ask for a copy of the SPD, summary plan description, which is said with confidence that physician noncompetes are enforceable in
an excellent source of information about the insurance and retirement Texas and employers will enforce them. However, a Federal Trade
What’s Missing from Your plan. For the protection of your family, arrange personal disability Commission rule has turned that predictability on its head. Favor-
able to employed physicians, the FTC’s rule outlaws physician non-
insurance if the employer doesn’t offer it as a benefit.
Employment Contract specialty board certification, you must undertake continuing med- competes beginning September 4, 2024. In response, the Chamber of
Professional Expenses: To maintain your medical license and
Commerce of the United States of America, among others, has sued
to invalidate the rule. It will take years before the issue is resolved. In
ical education (CME). Employers will pay for or reimburse CME. the meantime, it is possible that the courts will suspend the rule until a
The usual allowance, including travel and lodging, is $2,500 annually. final decision is made on its validity. If suspended, physician noncom-
By Michael L. Kreager, JD, LLM
The employer should also pay for your professional expenses. These petes will be enforceable.
include your Texas medical license renewal, your DEA registration,
fter training for years, you have a job and you’re going to as chart reviews, honoraria for speaking or writing, medical director Texas Medical Association dues and dues for specialty organizations. Indemnity: Indemnity is a legal description for the obligation to
be paid a living wage. One last thing though. The employer fees and expert witness testimony. On the other hand, the contract Consider asking for reimbursement of the costs of specialty boards reimburse. Your contract will contain an indemnity obligation where-
Aemails you an employment contract with the instruction, “Just will prohibit moonlighting without the employer’s prior permission. and ask for additional paid time off to prepare for the exam. The usual by you agree to reimburse the employer for any monetary loss it has
sign this contract. It’s our standard contract.” Before you sign it, here’s After the first year or two of employment, the salary might be allowance for professional expenses on top of the CME allowance is that you might have caused. Sometimes, the indemnity is conjoined
what you look for. replaced with a strictly production-based compensation formula. $2,500 annually. with a statement making the employee responsible for reimbursing the
These formulas can track the formula used for a bonus, as described employer for any chargebacks by insurance companies or government
Duties: Does the contract allow the employer to assign you to dif- above, or it might shift to a percentage of your profit. The latter is Paid Time Off: The contract should include paid time off (PTO). programs, e.g., Medicare, for miscoded claims. When presented with
ferent locations? If so, ask that a primary location be specified. Are a more complicated formula. The formula credits your compensa- PTO ranges from two to three weeks per year of employment, and this obligation, make sure that it applies only if the loss isn’t covered
you expected to provide call coverage? Ask that the contract state that tion with your collections and subtracts the costs associated directly more for in demand specialties. PTO is on a “use it or lose it” basis. by insurance. Thus, a malpractice claim will be most likely covered by
call coverage will be assigned equitably among the physician providers. with you, such as salary and benefits, and a share of overhead, such Unused PTO is not paid and does not carry over to a subsequent year. insurance and not become an issue. In addition, feel free to ask the
as rent and staff compensation. The resulting number is your profit. Always confirm how PTO is distributed among the physicians, espe- employer to add a mirror provision indemnifying you against loss the
Money: The contract should specify how much you are going to be As a non-owner, you would be paid a percentage of that profit and cially for spring break and summer vacations. employer might cause you.
paid. Usually, it’s a fixed monthly amount, i.e., a salary. How do you the balance is retained by the employer. If you see your compensation
know if the offered salary is market? The best solution is to tap the shifting to a production-based formula, it is imperative that you estab- Termination: Your contract will be for a term of years, with auto- Final Word: Consider asking an experienced contract attorney to
annual surveys conducted by the Medical Group Managers Associa- lish a reliable referral network while you enjoy the comfort of a salary. matic extensions after the end of the initial term. However, it will have review your contract and advise you about it. You can easily identify a
tion (MGMA). For a modest fee, MGMA will share survey results for provisions permitting an earlier end to your employment. qualified attorney from an Internet search.
your specialty. Institutional employers, such as hospitals, rely on the Upfront Money: It is acceptable to ask for a signing bonus. The
surveys to guide their starting salaries. They peg starting salaries at a usual sign on bonus is $10,000 but more is possible if your specialty Termination for Cause: The employer may end your employment
number that is below the median. You should ask for a salary that is at is in demand. The bonus may be paid when you sign the contract or upon the occurrence of listed, for cause events. The list begins with
the median or higher. with your first paycheck. Similarly, it is standard for the employer to the objective and winds down to the subjective. The loss of your med-
In addition to a salary, the contract should contain an opportunity reimburse your moving expenses, up to $10,000. ical license is an objective event. Disruptive behavior or less than the Michael L. Kreager, JD, LLM, is the founder of Kreager Mitchell
to earn a bonus. This bonus opportunity is tied to additional produc- In fairness, the employer will expect you to repay these amounts if standard of care is a subjective event. Failure to follow policies is in PLLC, a San Antonio law firm serving the needs of physicians.
tivity. It might be a percentage of the employer’s collections above a you don’t remain employed some minimum time, such as one or two between. For events that are not clearly objective, the employer should He has authored several books on physician employment contracts
threshold amount or a dollar amount for wRVUs produced above a years. In other words, if you leave early, you must repay the employer. give you a warning and a reasonable opportunity, 10 days, to remedy for the Texas Medical Association. In addition, he authored the
minimum number. On a related note, your contract should allow you Ask that the repayment be amortized monthly. If you leave halfway the problem. This protection is known as “notice and opportunity to popular guide, “The Physician Employment Contract,” which is in its
to retain call coverage stipends and payments for outside work, such through a two-year commitment, you only owe half the upfront pay- cure.” fourth edition. It is a free publication.

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