Five ‘Deadly’ Mistakes Doctors Make When They Sign Employment Contracts

Their training and education make physicians highly skilled at what they  do, but a hole may exist in their knowledge that has nothing to do with patient care.

 

All those years of training do not prepare doctors to navigate the legal thickets when it’s time to accept a position and sign an employment contract.

 

That lack of knowledge can lead to costly mistakes. You have worked hard to get where you are; now it’s time to reap the rewards of all that hard work. Contract hazards loom, though, that can make a long-term dent in a doctor’s income-earning potential.

 

When the person you are dealing with tells you that you have been given the “standard” contract, he or she either is misrepresenting the situation or is misinformed. Doctors make five “deadly” mistakes when they sign a contract without the proper legal assistance.

 

1. Relying on the offer letter 

Since the letter offering employment is signed by the new employer, many doctors believe the language is binding. That’s not the case. In fact, the offer letter that you were given has no legal effect once you sign an employment agreement. Virtually every physician employment contract has language that says the signed employment agreement supersedes any prior negotiations or documents. So, make sure any promises in the offer letter are covered in the contract.

 

2. On call, all the time

Doctors can end up being the physicians who are always on call on the weekends, holidays, or after hours if they are not careful about contract language. The number of doctors in a practice ultimately can affect how much “call coverage” falls to each person, but it’s prudent to include clear and concise language regarding what is expected of you in your employment agreement.

 

3. Not grabbing malpractice by the tail 

Many health-care employers carry a type of malpractice insurance known as “claims made” coverage. Those policies cover a claim only when it’s made during the policy period. If a doctor leaves employment, and a malpractice claim is filed later, the doctor isn’t covered. Physicians can continue coverage by purchasing what’s called a “tail” policy, but those policies can be extraordinarily expensive. It’s important that an employment agreement addresses payment for tail coverage after you leave.

 

4. You can’t work there 

Provisions that place restrictions on where you can work when you leave employment are called “restrictive covenants” and many physicians learn the hard way that those covenants can have an enormous impact on their careers. 

 

Often, the covenants say a doctor can’t practice medicine within a certain geographical area. If that area is too large, the physician could be forced to move to continue practicing. I try to obtain a restricted area of no more than a five-mile radius around the office location of the employer, though in rural areas a larger area may be reasonable.

 

5. Relying on inexperienced counsel 

Most physicians do not get the best deal when negotiating for themselves. Faced with massive student debt, they naturally tend to focus entirely on the pay. In effect, they mortgage their future in return for what strikes them as a massive paycheck now. 

 

That’s why it’s best to hire an experienced physicians’ attorney to review and negotiate the contract. The beauty of using a lawyer is that you are no longer the one making the requests for changes in the agreement. If questioned about issues, you can always just blame the lawyer.       

 

Dennis Hursh is an attorney who has provided legal services to physicians for more than three decades and is the author of “The Final Hurdle: A Physician’s Guide to Negotiating a Fair Employment Agreement” (www.TheFinalHurdle.com). He is managing partner of Hursh & Hursh, P.C., a law firm based in the Harrisburg, Pa. area, focusing on serving physicians and medical practices.