Over the past decade, physicians have increasingly changed their employment status, moving away from their traditional role as employers and owners of their medical practices, to become employees of various health care entities. According to recent figures from the American Medical Association, over 25% of U.S. physicians practiced in medical groups wholly or partly owned by hospitals, while more than 7% were direct hospital employees. Further, in 2016, nearly half of physicians (47.1%) were employees with no ownership stake in their practice of any kind.
Given this trend, physician employment agreements have become commonplace. Despite their increasing use, however, physician employment contracts should not be taken lightly, as they frequently involve millions of dollars over the life of the contract. Indeed, these agreements are complex, as they delineate the parties’ duties and responsibilities with respect to a wide variety of topics, including the scope of employment, compensation, benefits, professional liability coverage, provider-payor agreements, non-competes, non-solicitation, confidentiality, discipline, and termination. Given their complexity, and the fact that they govern a hospital or medical group’s professional relationship with the physician-employee, it is important to negotiate and draft these agreements carefully. The failure to draft and analyze these agreements with a critical eye can lead to several landmines down the road, including unfulfilled expectations, disgruntled employees and, in extreme cases, litigation over the agreement’s terms.
ASG Law can advise you with respect to physician-facility or physician-practice group agreements.