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Physician
Employment
Issues
Presented by Kirk Doan

KIRK DOAN –
HEALTH LAW EXPERIENCE
 General Counsel -- Metropolitan Medical Society of
Greater Kansas City
 Board Member -- Missouri Medical Political Action
Committee
 Member -- Metropolitan Medical Society Alliance --
Legislative Liaison
 Member -- State Government Relations Committee --
Metropolitan Medical Society
 Partner -- Health Care Practice Group of Stinson
Leonard Street LLP
 President, KC Society of Healthcare Attorneys

PHYSICIAN EMPLOYMENT
AGREEMENTS
 Introduction
o Hospital employed physician
o Private group employed physician
o PC/LLC owner/employed physician
 Contract issues to be addressed
 Relationship to other agreements
o Revenue guaranty agreement
o Shareholder agreement

CORPORATE FORMALITIES
 Who is the employer
 Has contract been authorized
 Who signs for the employer
 Is the employer a substantial entity
 Fee splitting
 Corporate practice of medicine

PHYSICIAN QUALIFICATIONS
 What licenses and privileges are required
 When must they be obtained
 When do you start and risk of delay
 Medicare exclusion or suspension
 Effect of staff membership on covenant
 Board eligibility or certification
 Managed care/insurance agreements

TERM OF THE AGREEMENT
 Date legally binding and start date
 Evergreen provision for renewal
 Escalators and passage of time
 Termination versus expiration
 Locum Tenens as damages
 Partnership consideration timeline
 Terms of buyout - Shareholders’ agreement

PRACTICE LOCATION
 Where will you work and reassignment
 Effect on family
 Effect on covenant not to compete
 Is your consent required

WHAT EARNINGS BELONG
TO THE GROUP
 Honorariums and consulting
 Inventions and books
 Moonlighting
 Hospital staff positions
 Call payments

PATIENT ASSIGNMENT
 Effect on compensation and bonus
 Equitable allocation of new patients
 Helps to build your practice

ADMINISTRATIVE TIME
COMMITMENTS/CALL/ROUNDS
 35-40 Clinical hours per week
 Limit administrative duties
 Staff positions
 Call assignment
 Rounds at hospital
 Immigration minimums

INCORPORATED POLICIES AND
PROCEDURES
 Employee handbook
 Employer rules and regulations
 Hospital rules and regulations
 Medical staff by-laws
 Request copies or password to website

MEDICAL RECORDS
 Timely preparation
 Copies for your administrative, regulatory
or litigation purposes
 HIPAA -- business associate rules
 Record retention and access
 Ownership of records

SPECIAL EQUIPMENT
 Cellphone, pager, PDA, dictation
 Revenue generating equipment
 Automobiles
 Computers and EMR
 Ancillary staff -- duty to consult
 Physician extenders and collaborative
practice agreements
 Special equipment for practice

COMPENSATION
 Formula or set amount
 Guarantee and/or Bonus
 Audit rights
 Realistic - MGMA Data, WRVU analysis
 Forfeiture of bonus on early departure
 Stark II caps on total compensation
 C-Corp dividend vs. compensation issue

REVENUE GUARANTY AGREEMENT
 Between hospital and
recruit/group
 Indemnification by groups
 1099 income
 Termination for cause
 Terms of payback
 Stipends during residency

MALPRACTICE INSURANCE
 Amount
 Who pays for the tail, conditions to
payment
 Evidence of prior coverage or nose
coverage
 Moonlighting
 Extra-ordinary premiums
 Indemnify for harassment, etc.

FRINGE BENEFITS
 Copies of all plan
descriptions
 Effect of vesting schedule
 COBRA rights
 Publications
 Medical Staff dues
 Society dues

VACATION AND CME
 Amount
 CME count against
vacation
 Vacation -- use it or
loose it?
 CME allowance
 Sick leave

SIGNING BONUS, MOVING
EXPENSES, ETC.
 Signing bonus
 Moving expenses
 House hunting trips
 Recruiting fee
 Repayment obligations
 Loans and stipends
 If loan, 1099 income upon forgiveness

FOR-CAUSE/NOT-FOR-CAUSE
TERMINATION
 Definition
 Objective criteria and right to cure
 Effect on pay and benefits
 Effect on malpractice tail or competition
covenants
 Notice period for not-for-cause
 Liquidated damages for training expenses
 Automatic termination of hospital privileges
 Arbitration

COVENANT NOT TO COMPETE
 Radius
 Duration
 Ownership
 Enforceability
 Relation to hospital,
clinic locations
 J-1 Visa Waivers
 Part of practice
purchase
 Consideration
 Buy-out formulas
 Liquidated
damages

ASSIGNMENT OF CONTRACT
 Who do you work for
 Consent required

EXECUTION
 Copies
 E-signatures
 Amendments

KIRK DOAN
816.691.2739
Kirk.doan@stinson.com

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