Termination clauses explain how a doctor’s job may end. There are two main types: termination with cause and termination without cause.
Dr. John A. Fromson, MD, says that having a fair notice period is very important. Without enough notice, a doctor’s money and career might be in trouble.
When a doctor is fired without cause, they usually cannot challenge or appeal the decision. Dr. David Kalifon, who studies emergency doctor contracts, says this might not be fair. Many contracts have “clean sweep” rules. These make doctors lose hospital privileges and membership right after their contract ends, without any hearing.
These rules limit where doctors can work afterward. In emergency medicine, some groups have exclusive contracts with hospitals. This can stop doctors from working in certain places after they leave. Because job offers are limited, doctors often accept these rules even though they can be unfair.
Doctors do have some rights under hospital rules, like getting a fair hearing before losing privileges. But most employment contracts act more like business deals and give little or no chance to appeal.
Most doctor contracts also have non-compete clauses. These stop doctors from working nearby or in the same specialty for some time after leaving a job. These rules aim to protect the employer’s business but affect a doctor’s plans after leaving.
The American Medical Association (AMA) says about 37% to 45% of doctors have these rules. States have different laws about them. For example:
Lawyer Richard H. Levenstein says doctors should try to make non-compete rules apply only when they leave the job without good reason or are fired for cause. This helps keep doctors from being unfairly blocked from finding new work.
Some contracts offer a buyout option. Doctors can pay money equal to 6 months to a year’s pay to cancel the non-compete. But this is very expensive and not common.
Medical practice leaders should make sure doctor contracts clearly say the following:
Clear contract language stops confusion and legal problems. It protects doctors and the medical practice.
Termination rules often connect to pay. Sometimes bonuses or advanced payments have to be paid back if the contract ends early. Both sides need to know this clearly.
Consultant Rich Glehan says it is more important to understand the actual pay physicians get after bonuses and production rules than to know every detail of the formula.
Pay can vary a lot. There might be a base salary, pay based on work done, bonuses, and expense reimbursements. Contracts should explain these clearly because they affect job satisfaction and sticking with the job after termination.
Doctors are advised to get legal advice before signing contracts. This is important to understand rules about termination, non-compete, and insurance.
Once signed, contracts are hard or impossible to change.
Healthcare groups can help by offering contract review services. These may come from medical societies, the AMA, or lawyers who know healthcare employment law. This support helps doctors protect their careers and avoid costly disputes.
AI and automation can help manage complex doctor contracts, especially termination rules. Simbo AI is one company that offers phone and front-office automation using artificial intelligence. Their tools can also help with contract management in healthcare.
Here are some ways AI and automation help:
Using these tools can cut admin work, improve contract accuracy, and support doctors better.
People in charge of doctors and contracts in U.S. medical practices should:
Careful knowledge of termination clauses, combined with modern technology, helps healthcare groups keep steady doctor employment and follow the rules. Good contract management protects both the organization and doctors while making sure patient care continues well.
Key components include compensation and benefits, duties and requirements, contract term, termination clauses, restrictive covenants, and insurance considerations such as gap/tail insurance.
Compensation can include base salary, productivity-based pay, bonuses, benefits, and reimbursement for various expenses. Understanding the compensation formula used is crucial.
The contract should specify whether the position is full-time or part-time, outline expected duties such as administrative roles and patient load, and identify the participating physician.
Restrictive covenants, or non-compete clauses, prevent a physician from practicing in a specific area for a certain period after leaving a position, which protects the practice’s economic interests.
Termination clauses should include provisions for termination ‘without cause’ requiring advance notice and ‘for cause’ specifying conditions that warrant immediate termination.
Negotiating ensures that the terms meet the physician’s needs and reflect their value and contributions, allowing for a mutually beneficial agreement.
Professional liability insurance covers legal claims, with gap/tail insurance ensuring coverage after leaving a position for incidents occurring during employment.
The contract should specify the timing and criteria for performance evaluations, ensuring both parties understand how job performance will be assessed.
Questions include responsibilities and compensation structure, bonuses, provided benefits, start and end dates, insurance types, and opportunities for renegotiation.
Key recommendations include researching the practice, not rushing into decisions, getting agreements in writing, and seeking legal review to protect one’s rights.
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