Key Issues and Strategies for Negotiating Physician Assistant Employment Contracts

Transcription

1 Key Issues and Strategies for Negotiating Physician Assistant Employment Contracts Jenni Colagiovanni HealthLaw Offices Troy, MI (248)

2 Outline Identify and explain key terms often found in PA employment contracts Discuss practical tips for gaining leverage during the contract negotiation process Discuss negotiation strategies for revising or removing overly burdensome terms before starting a new position Questions 2

3 Introduction Many PA positions with hospitals and medical groups are governed by an employment contract Too often individuals are not focused on the specific contract terms they are agreeing to at the start of an new job Contract terms can have a lasting impact: Limitations on future employment options Financial obligations Potential liability 3

4 4 Key Areas of Employment Contracts Termination Provisions Non-compete Clauses Professional Liability (Malpractice) Insurance Indemnification Provisions 4

5 Termination Provisions Can have a lasting impact by triggering restrictive covenants (e.g., non-compete, non-solicitation) Generally include for cause and without cause termination provisions 5

6 Termination Provisions For cause termination often requires little or no notice to the PA Examples include: Restrictions on license Failure to maintain clinical privileges Willful misconduct Criminal charges or convictions Disability Exclusion from federal healthcare programs (Medicare/Medicaid) Quality of care or improper billing determinations made by an insurer 6

7 Termination Provisions For cause termination Try to limit for cause termination to objective terms and make efforts to remove subjective terms Examples of subjective terms: Unbecoming conduct Undue absenteeism 7

8 Termination Provisions Without cause termination Does not require a specific reason for termination Generally applies to both PA and the practice Often includes a notice requirement (e.g., 60, 90, 120 days) Impact of notice requirement PA terminating versus practice terminating Failure to provide notice could amount to breach of contract Negotiating Point: Consider whether the non-compete clause is drafted to cover both for cause and without cause termination. If so, seek to limit to for cause situations. 8

9 Non-Compete Clauses Non-compete clauses are generally enforceable in Michigan Examples: Limits your ability to practice within a certain radius of the practice location(s) Limits your ability to work for a competing medical group that provides services in the same hospital or health system 9

10 Non-Compete Clauses Must be reasonable to protect the employer s competitive business interest and reasonable with regard to: Geographic scope Duration Restricted activity Statute authorizes the court to enforce an otherwise unreasonable non-compete clause to the extent limited to render reasonable in light of the circumstances in which it was made. See MCL a 10

11 Non-Compete Clauses Potential consequences of violating a non-compete will typically be outlined in the contract, including: Liquidated damages Injunctive relief 11

12 Non-Compete Clauses Consider scope of the non-compete on your ability to practice elsewhere in same locality Urban, suburban, rural area Type of practice/specialty restricted Negotiating Points: Limit scope of terms if overly broad Limit to for cause termination situations or where PA elects to end his/her employment 12

13 Non-Compete Clauses Non-solicitation clause Another type of restrictive covenant Limit ability to solicit patients or contact referring physicians Negotiating point: may be able to incorporate the ability to passively notify existing patients and referring physicians of your new practice location. 13

14 Professional Liability Insurance Also known as medical malpractice insurance Often the practice will agree to maintain professional liability insurance on the PA s behalf Questions to Ask: Type of policy? Coverage limits? Deductible amount? Important to know whether state law or hospital privilege criteria requires a minimum amount of coverage MI statute of limitations 14

15 Professional Liability Insurance Type of Policy: Claims made versus Occurrence Claims made policy protects against claims made while the policy is in effect. Absent an extended reporting endorsement (also known as a tail ) the policy will not cover any claims made after the policy term ends, even if the claim occurred during the policy period. Occurrence policy covers claims made for events that occurred during the policy period, regardless of when they are reported. Many practices maintain claims made policies due to the cost involved. 15

16 Professional Liability Insurance Examples Claims made Policy is in effect from , claim is made in 2014 for a procedure that occurred in NOT COVERED. Occurrence Policy is in effect from , claim is made in 2014 for a procedure that occurred in COVERED. 16

17 Professional Liability Insurance Tail Coverage Needed in connection with a claims made policy Under a claims made policy, PA will only have coverage if: (1) event occurs after the date specified in the policy; and (2) the event is reported to the carrier while the policy is in force. Tail coverage extends coverage to claims reported in the future after the policy period has ended. 17

18 Professional Liability Insurance Tail Coverage Contract may designate whether PA or practice is responsible for purchasing tail coverage after employment ends Considerable cost Coverage limits and duration? Is Tail required or is there the option of nose coverage? 18

19 Professional Liability Insurance Tail Coverage Nose coverage (also known as prior acts coverage) allows the PA to transfer the start date of their existing policy to a new insurance carrier so the policy period extends back. Purchasing nose coverage eliminates the need for a tail Negotiating Point: may be able to negotiate nose coverage premiums into contract with next employer 19

20 Professional Liability Insurance May encounter situations where hospitals or other healthcare entities are reluctant to disclose policy limits May be self-insured Practical considerations 20

21 Indemnification Legal concept: requires one party to pay for losses sustained by another party Included in more and more employment contracts Example: PA will forever indemnify and hold the practice harmless for any claims, losses, damages, costs and expenses, including attorney s fees, resulting from the PA s acts or omissions while employed. Creates considerable liability for the PA; likely an uninsurable risk Negotiating Point: Try to remove indemnification provisions; if not possible, work to narrow language to intentional acts or willful conduct. 21

22 Other Contract Terms Contracts vary it is important to understand both the terms included and identify when key terms have not been addressed. Other terms include: Compensation (base salary, bonus) Call schedule, hours, location Job requirements Cell phone, computer Benefits Vacation time, CME Other employment 22

23 Contract Negotiations A contract should say what it means The contract should say what you have agreed to in verbal discussions, s, offer letter, etc. Merger clause issue Staff members may change, memories may fade Examples 23

24 Contract Negotiations Concern: Worried about an adversarial start to the relationship Answer: Approach contract negotiations thoughtfully and reasonably Focus on the key issues Communicate the need for revisions professionally Propose reasonable revisions Work to reach mutually acceptable language Remember: it is safe to assume the hospital or practice had an attorney prepare the contract on its behalf. 24

25 Contract Negotiations In many cases, overly burdensome language can be removed or narrowed to make it more fair/reasonable. Depending on your relationship with the hospital/practice and the formal or informal nature of the process up to this point: Some providers prefer to have their attorney explain the need for changes and propose revisions to the practice. In other cases the PA may prefer to have the attorney identify the key issues and prepare proposed revisions but ultimately choose to discuss the issues with the practice directly. 25

26 Practical Considerations Get as much information as possible about the position/duties/expectations early in the interview and hiring process Request a copy of the employment agreement as early as possible in the process Allows you to fully evaluate the offer Allows time for changes where needed Get a feel for the practice culture to make sure it is a good fit 26

27 Remember: It is imperative to understand the terms of the contract you re signing. No one wants to think about leaving at the start of the employment relationship, but often your first job is not your last. Once you ve decided to leave, it is too late to change the terms of the contract. It is prudent to have your contract independently reviewed by an attorney. Approach negotiations respectfully and reasonably. 27

28 Questions? Jenni Colagiovanni HealthLaw Offices Troy, MI Direct (248)