INTRODUCTION When physicians have finally completed the medical education journey, many are confronted with a “physician employment contract,” usually from a hospital or medical practice, which could define the essential terms of their professional relationship for many years to come. If the parties live happily ever after, neither may ever read the contract again. However, … Continue Reading
INTRODUCTION When physicians have finally completed the medical education journey, many are confronted with a “physician employment contract,” usually from a hospital or medical practice, which could define the essential terms of their professional relationship for many years to come. If the parties live happily ever after, neither may ever read the contract again. However, … Continue Reading
1. Failure to Begin with the End in Mind. The most important provisions of your employment contract will be the provisions governing your termination rights, for two reasons. First, if the relationship goes well, chances are the contract will never be read again. However, if there is a dispute, both parties will be reading the contract looking for … Continue Reading
In CMS Advisory Opinion AO-2011-01, CMS has issued a favorable advisory opinion allowing the physician recruitment arrangement with a hospital and a physician practice which imposes a restrictive covenant upon the recruited physician. Restrictive covenants and recruitment arrangements had initially been prohibited by the Stark Rules. However, bowing to industry comment, CMS amended the physician recruitment … Continue Reading
Several physicians employed by Court Street Family Practice, a division of the Sisters of Charity Health Systems Inc. (Health System) resigned to join a competing practice owned by a competing health system. The employment contracts included a “Limitation of Practice” clause which “forbade them from practicing medicine with Central Maine Health Care Corporation, its affiliates or … Continue Reading
INTRODUCTION When physicians have finally completed the medical education journey, many are confronted with a “physician employment contract,” usually from a hospital or medical practice, which could define the essential terms of their professional relationship for many years to come. If the parties live happily ever after, neither may ever read the contract again. However, if … Continue Reading
There have been many articles written about the negotiation and enforceability of physician restrictive covenants, but there are just a few fundamental concepts crucial to understanding and successfully navigating these issues. 1. The Myth of Unenforceability. Many physicians either completely ignore or dismiss the significance of restrictive covenants because of the mistaken belief that restrictive covenants … Continue Reading
A recent Allegheny County Court Case clearly establishes that the enforceability of restrictive covenants is not an urban myth; they are enforceable and vigorously litigated. In Allegheny Specialty Practice Network and the West Penn Allegheny Health System v. Joseph J. Colella, M.D., ASPN and WPAHS obtained a preliminary injunction prohibiting Dr. Colella from practicing within … Continue Reading
PHYSICIAN CONTRACTS & ISSUES INTRODUCTION The structure, purpose and terms of every physician contract are different. The content and style vary with the institutional or private practice nature of the employer and the needs and leverage of the physician. Following is a list identifying major issues or components. I. COMPENSATION 1. Base Compensation. A. Fair market value … Continue Reading
RESTRICTIVE COVENANT UNENFORCEABLE BY SURVIVING SPOUSE The Virginia Supreme Court ruled that a medical practice corporation, ownership of which had transferred from the deceased sole physician shareholder to his spouse and which was converted to a business corporation by state law, could not enforce a restrictive covenant because it could not practice medicine and had … Continue Reading
Restrictive covenants are often the most complicated clauses in a physician employment contract. Medical practices and their lawyers are constantly striving to make these non-competition agreements more protective, more comprehensive and more enforceable. Sometimes this "more is better" approach backfires!… Continue Reading
The District Court of Appeal of the State of Florida affirmed a lower state court holding that certain aspects of a restricted covenant were not enforceable. In Florida Hematology and Oncology v. Rambabu Tummala, M.D., the Practice had terminated Dr. Tummala allegedly after he began questioning certain billing practices. Although Dr. Tummala was subject to a restrictive … Continue Reading
In MurfreesboroMedical Clinic vs. Udom, the Tennessee Supreme Court ruled that restrictive covenants are not enforceable against physicians, unless specifically prescribed by law. In handing down this decision, the Court overturned an appellate court decision enforcing the restrictive covenant. Although restrictive covenants are otherwise enforceable in Tennessee, the Court found that interfering with patient freedom … Continue Reading
In WellSpan Health v. Bayliss, the WellSpan Health System, the primary components of which are York Hospital and Gettysburg Hospital, attempted to enforce a restrictive covenant against a physician in all counties listed in the non-compete section of an employment contract, despite the fact that WellSpan had no physical presence in three of the counties. … Continue Reading