MomMD – Connecting Women in Medicine
by Holly Baab, MD
Based on a Lecture by Rick M. Reznicsek, Esq. to the Florida Association of Family Practice Residents February 23, 2001
Your residency is nearing its end and potential jobs are being considered. How should you proceed?
In looking at your first-time contract out of residency, it would be a good idea to have a qualified lawyer review the contract and make any suggestions for items you may want to clarify or negotiate. The average cost is approximately $500. The lawyer should be well versed in health care law, especially in the geographic area you will be practicing. The lawyer may be a member of the American Health Lawyers Association.
You also have the option of having a lawyer actually negotiate your contract on your behalf. This is a service typically sought by physicians further along in their careers and is more expensive as lawyers charge on an hourly basis. However, should you decide to sign your first contract without any legal advice (as most residents surprisingly do) here is an outline of important items to look for in your contract:
Term of the agreement
Should be for one or two years with automatic annual renewal. The first time the contract comes up for renewal, should be when you would come up for “partner.”
Exclusive or non-exclusive
Can you moonlight?
Ideally, you would share call equally with other physicians in the practice.
- Base Salary
- Bonuses (See more on bonuses below)Days Off 4-6 weeks is average; including vacation, CME, and sick days.
Expenses $1500-$2500 is average. Specify what this exactly covers such as travel, lodging, registration, etc.
- Health Insurance, for yourself and your family
- Disability Insurance
- Malpractice Insurance
- Pension Plans
- Covering other costs such as pager, cell phone, ….if it’s important to you, than make sure it is spelled out in the contract
- Tail Insurance-(this is insurance that covers claims for any malpractice you may have done while working for the practice. If you are fired, then the practice should have to pay for this insurance. If you leave, often the practice will expect you to pay for the coverage.)
- Recruiting Expenses–will they pay for your moving expenses, exam fees, license fees?
These are essentially non-compete clauses stating that if you leave the group you can not practice in a certain geographic area for a certain length of time. These clauses may or may not be enforceable in your state. You should negotiate that if you are terminated without cause than the non-compete clause becomes void.
Right to Become a Shareholder
Eligibility Requirements to become a “partner”. Elements of the purchase price:
- Payment for share of hard assets
- Payment for goodwill-(if you are asked to pay for this it should be based on the stability on “non-patient revenues” i.e. in this day and age you should not be paying for a practice’s “good name,” but could be expected to pay for the goodwill of an extremely successful practice with good equipment in place)
- Payment for accounts receivable
Typically paid based on your productivity:
- You should receive a percentage (typically 30-50%) of anything collected based on your productivity above some specified threshold.
- A rough guideline to go by is 2 x your salary covers your overhead expenses and provides profit to the practice. Make sure how the overhead is calculated is in writing.
- Your productivity includes services you personally perform, physician-patient encounters, interpretations of diagnostic tests that you perform, revenues from direct supervision of physician extenders. It is illegal to include revenues generated by your patients for diagnostic testing procedures.
- Paid or non-paid?
- Will you have to “make-up” the call you missed? .