Uncle Sam and your job options

Considering your next career move? Consider the tax implications.

By Elizabeth A. Mullen and Bruce D. Armon | Legal Matters | Winter 2013

 

There are two certainties in life: death and taxes. While you can possibly prolong the former, the latter can’t be avoided—but it can be mitigated.

Whether you are just starting your career or considering a strategic move, there are tax implications that you should consider in addition to the many logistic and practice-oriented decisions that are inherent in any career move. Addressing the tax implications of these opportunities before you sign any employment contract or go too far down the path of business planning will protect you financially and may present additional opportunities for you and your practice.

Careful tax planning is imperative to good business practices. Though this article outlines certain potential tax issues for physicians to consider, the authors urge readers to consult an experienced tax advisor to discuss the tax implications of every business opportunity.

When presented with an opportunity to join an existing practice, work for a hospital or start your own practice, there are several tax issues that you should consider.

Moving expenses

The job of your dreams might be beyond your commuting radius. As a result, you may need to pack yourself and your family and move to another part of the state—or country—at a significant cost.

Some of the expenses you incur as part of your relocation may be deductible on your personal income tax return. In other instances, your new employer may offer to pay your moving expenses or reimburse you for certain costs incurred. Keep all receipts and invoices associated with your move.

Individuals are often permitted to deduct reasonable expenses of moving household goods and personal effects from their former residence to the new residence. This includes packing and crating charges, connecting or disconnecting utilities, transportation to the new residence from the former residence, and in-transit storage and insurance for the household goods and personal effects owned by the taxpayer. Individuals may also be permitted to deduct reasonable expenses of traveling (including lodging) from their former residence to the new place of residence. Note, this does not include expenses for meals during that transition.

Oftentimes, the employment contract may specify that moving expenses will be paid by your prospective employer. Alternatively, an employer may reimburse certain expenses, or up to a certain limit. These expenses should be excluded from your wages as a non-taxable fringe benefit, so long as the payments constitute qualified moving expense reimbursements for IRS purposes. There are certain items that the IRS does not consider approved moving expenses (e.g. certain storage charges, pre-move house hunting expenses, expenses of obtaining a new driver’s license, expenses of buying or selling a home or entering into or breaking a lease). Accordingly, if your prospective employer agrees to coordinate your relocation or to reimburse you for the costs you incur, you should ask how those costs or reimbursements will be accounted for or reported for tax purposes.

Income guarantee agreements

Income guarantee agreements are a common arrangement used by hospitals to attract you to the hospital’s service area in order to meet community health care needs. In conjunction with a private practice in the hospital’s service area that will offer you an employment agreement, these income guarantee agreements will contain many provisions that may be misunderstood.

Income guarantee agreements differ from one hospital to the next. Generally, the hospital will offer you a guaranteed salary and incremental practice expenses for a defined period of time, which will be offset by any revenue generated by your clinical efforts and include a maximum hospital contribution. In return, you agree to build and maintain your medical practice within the hospital’s service area for a certain period of time. After the guarantee period ends, you will agree to either repay the hospital (plus interest) for the amount you borrowed during the guarantee period, or the hospital may forgive repayment over time if you continue to work full time in the hospital’s service area and fulfill other requirements that may be imposed.

The tax implications of an income guarantee provision are often triggered as amounts are forgiven, although the specific tax consequences will differ based on the specific terms of the agreement.

In most cases, the income guarantee is structured as a loan and the hospital will be required to issue a Form 1099 each calendar year for the forgiven guaranteed amount—plus interest. The hospital will send a copy of the Form 1099 to you and to the IRS. You will be required to include the reported amount as income each year and pay federal and state income taxes thereon. Of course, paying taxes on the loan amount forgiven is preferable to paying back principal and interest to the loaning hospital. It is important that you and your tax advisor, on the one hand, and the hospital and their legal counsel, on the other hand, agree on the tax implications of the income guarantee agreement, the repayment and/or forgiveness of any funds advanced, and how the arrangement will be reported for tax purposes. The hospital will certainly work with experienced counsel to draft its income guarantee agreements; you, too, should have counsel who protects your interests.

Employee or independent contractor

When accepting a position with a hospital or a medical practice, you and your tax advisor and the organization with which you are negotiating a service contract should discuss your status as an employee or an independent contractor—not only for income tax purposes, but also for purposes of benefits, professional liability insurance, and any restrictive covenants. The IRS and each state taxing authority has its own unique rules and regulations that address the classification of workers for income tax purposes.
Based on an examination of cases and rulings, the IRS developed a 20-Factor Test that it often uses to determine whether an employee-employer relationship exists. More recently, those factors have been divided into three categories—behavioral control, financial control and relationship of the parties.

The most important point for physicians to remember is that your status as an independent contractor or employee will depend almost entirely on the specific facts of your business opportunity.

When dealing with physicians, the IRS considers factors such as the degree to which the physician has been integrated into the organization—whether a hospital or a medical practice; the substantial nature, regularity and continuity of the physician’s work for the organization involved; the authority reserved by the organization to require the physician to comply with its general policies; and the degree to which the physician has been afforded the rights and privileges generally established for physicians of the organization. The IRS and state taxing authorities will consider the degree of control that the organization has over a physician’s performance of his medical duties in addition to the physician’s financial investment in the business and the contractual nature of the relationship between the physician and the organization.

If you are treated as an employee of an organization, you will receive a Form W-2 from your employer and have payroll taxes—including wage withholding and FICA—withheld from your paycheck each pay period. If you are treated as an independent contractor, you will not receive a Form W-2 and will not have payroll taxes withheld from your compensation. An independent contractor can expect to receive a Form 1099 from the organization and to pay self-employment tax on compensation. You will have quarterly tax deposit obligations and you must budget cash flow accordingly.

The tax consequences and obligations differ significantly depending on how a physician is classified, and penalties for misclassifying a service provider can be significant.

Choice of entity

The prospect of starting your own medical practice or joining an existing practice can raise multiple issues—whether to affiliate other physicians, the optimal location, branding, funding or loan procurement and selecting the best vendors. Notwithstanding all of these important decisions, arguably the first issue you should address is the organizational form of the medical practice. For instance, if you choose to form a limited liability company, a partnership (if more than one physician is an “owner” of the entity), or a professional corporation, each structure has unique characteristics for federal and state tax purposes that affect the way the business of the practice is conducted and how the “owners” are taxed on earnings.

Owners of a limited liability company are called “members.” Partners form a partnership, and shareholders or stockholders own a professional corporation. Depending upon the state where you practice medicine, there may be restrictions relating to whether a non-physician can be your co-owner in the medical practice.

Most physicians will find it preferable to conduct business using a “pass through” entity that is not itself subject to income tax. Pass-through entities include partnerships and limited liability companies that are treated as partnerships (“LLCs”).

These entities do not pay federal income tax; rather, the income, deductions, gain, losses and credits of these entities “pass through” to the owners who pay any resulting income tax. Conversely, most corporations are subject to income tax. As a result, any income earned by such a corporation is subject to tax at the corporate income tax rates, and any dividend paid by the corporation to its shareholders is subject to tax at the shareholder level. Accordingly, a corporation may not be the optimal choice of entity for a medical practice.

In order to avoid this double taxation and to maximize the profits available for distribution to owner-physicians, a pass-through entity is often preferable. Partnerships and LLCs also offer physicians greater flexibility in terms of practice management, growth, and compensation/profit-sharing options.

Taxing issues

For most physicians, the opportunity for a job search will materialize numerous times throughout your career.

Each of the issues discussed  has its own complexities and needs to be assessed in light of the specific facts and circumstances. Uncle Sam will always be entitled to his fair tax share, but with careful tax planning and the assistance of experienced advisors, you can help ensure you are not taxed to death and can enjoy the success of your work effort.

Elizabeth A. Mullen (emullen@saul.com) is special counsel in Saul Ewing’s Washington, D.C., office and a member of the firm’s tax practice. Bruce D. Armon (barmon@saul.com) is managing partner of Saul Ewing’s Philadelphia office and co-chair of the firm’s health law practice group.

 

0 Comments

Enough about call…What about vacation?

When it comes to your contract, don't forget to review the benefits package.

By Jon Appino | Fall 2012 | Legal Matters

 

Let’s face it: Physicians’ contracts are complicated! You can spend hours poring over your contract in an attempt to figure out compensation structures, call schedule, wRVU schedules, collection rates and overhead ratios.

In the midsts of sorting through the legal aspects of the contract, such as the non-compete clause, intellectual property rights and Stark Law provisions, physicians might overlook something very important‹the employment benefits in the contract.

More often than not, benefit packages are pretty vague. Items usually included in a benefit package are: medical, dental and vision insurance; life and disability insurance; retirement savings or investments; vacation and sick time; CME funds and time off; malpractice insurance; board certification fees and support; paternity/maternity leave policies and loan assistance, to name a few.

We’ll break down some of the more complicated aspects of your benefits so you know what to look for.

Malpractice insurance

Most employers provide medical malpractice insurance for physicians.

There are two main types of malpractice insurance that you need to know about: occurrence-based and claims-based.

“Occurrence based” policies are more expensive and less common. Occurrence malpractice insurance will cover you for whenever the claim occurred, not when it is filed. With occurrence malpractice insurance, you would still be covered even if you are no longer employed at the clinic where the claim occurred. Occurrence malpractice insurance does not require the purchase of an extended reporting endorsement, often called a “tail” policy.

“Claims made” insurance is the other main type of malpractice insurance. It is less expensive and therefore more common (we see around 75 percent claims-made policies). These types of policies will cover you if a claim is made during the policy. In order to be covered in the event that you leave your position where the claim occurred, you need to purchase “tail” insurance.

Tail insurance is priced specific to your specialty and history and can be quite expensive. We have seen neurosurgery tail policies of over $93,000 that are the sole responsibility of the physician. These amounts are not financed, and are usually due in full when the policy is purchased and employment terminated.

There are many clauses in a contract around malpractice insurance. The contract should clearly state which type of insurance is being provided, who is responsible to purchase “tail” if required, and the limits of the insurance policy.

Vacation time

Vacation time is important! When looking at your contract, pay attention to the way your vacation benefits are stated. Will you have specific days for vacation, illness and CME, or are you given a lump sum of PTO (paid time off)?

Will your vacation time be paid out on termination? Will it be rolled over to the next year if you don’t use it all? You may look at your paid time off differently if it’s a “use it or lose it” policy.

When reviewing your contract, request any specific vacation policies to which it refers. Certain policies may require specific notices by physicians when requesting days off or limit the number of consecutive days a physician can be absent from clinic.

Retirement savings

Many contracts lack any specific details around retirement saving plans. Often the contracts will refer to a retirement plan policy that you haven’t read.

Retirement benefits are a very important part of your future. If there is a plan offered by your future employer, you’ll need to know the specifics and details regarding contribution and match limits, vesting schedules, investment choices and potential tax implications.

Not fully understanding the retirement package your employer is offering could cost you in the long run. Physicians who do not understand vesting schedules may sign a five-year employment contract with a seven-year retirement vesting schedule. If you leave the position in five years, you may not be able to take all of your retirement savings with you.

It’s important that you know and understand the various retirement vehicles available to you so you can make informed decisions about your future.

As you can see, the benefits section of a contract is very important. There are many consequences to not fully understanding all the benefits being proposed by your potential future employer. Don’t simply look at the compensation and sign‹make sure the benefits section is up to par as well.

J. Appino is the founder of Contract Diagnostics (contractdiagnostics.com), a national company that specializes solely in physician contract reviews.

 

0 Comments

Don’t let your next IT project crash your practice

By Evan J. Foster, Esquire, Bruce D. Armon, Esquire | Legal Matters | Summer 2012

 

Physicians and medical practices are at the vortex of the electronic health care delivery system. Droids, tablets, smart phones and other devices are changing the way society generally, and health care practitioners individually, gather, store and transmit useful (and sometimes not-so-useful) information.

Many physicians and their practices are moving quickly to implement electronic health record systems, e-prescribing functionality or to generally enhance their current technology to take advantage of the incentives offered to “meaningful users” of health information technology under the Health Information Technology for Economic and Clinical Health (HITECH) Act or because of their participation in an ACO.

Selecting the wrong vendor or the wrong technology, however, can be a big mistake and result in cost overruns, delayed billing or reimbursement, and lost time and productivity.

To help ensure the success of your next IT project, consider these dos and don’ts in evaluating and selecting the vendor and technology.

Do due diligence on the vendor and the technology.

Many physicians and practices do little, if any, due diligence on their vendor or the technology.

At a minimum, practices should talk to others using the same vendor and technology. These conversations should include practices that are in the implementation process, those that recently completed implementation, and those that have been using the technology for a significant period of time.

Talk to other practices of similar size, with a similar number of locations and within the same specialty, if applicable. Your vendor should be able to provide references.

If you are considering using specialized features or functionality, or have what you believe are a unique set of circumstances, you need to do additional homework and ask additional questions. You should also do some Internet research and review the vendor’s support forums. This information can help identify potential problems and let you better understand the vendor’s approach to handling customer concerns.

Don’t automatically take a solution offered by an existing vendor.

With the demands on your professional time, it is tempting to simply accept the proposal from your external practice consultants. Resist the urge.

Though there may be advantages and efficiencies to be gained from expanding your relationship with a current vendor, this can also backfire if the relationship turns sour.

Having all of your critical practice functions performed by one vendor makes you totally beholden to that vendor and creates a “single point of failure” should the vendor run into financial issues or otherwise goes dark. Transparency in understanding the financial relationship between your practice consultant and the product(s) they are suggesting is important. Use the same caution and perform the same level of due diligence as you would with every third-party vendor. You should insist that the IT component be severable from the remainder of the services provided to ensure you can transition a portion of the services you are receiving while keeping others in place.

Don’t skip acceptance testing.

As technology evolves and systems become more complex, the chance of something not working correctly increases dramatically. It also becomes harder to troubleshoot and correct problems once they arise, often involving multiple vendors and/or systems.

Engage in a formal testing and acceptance process. This is especially important when software must exchange data with other systems or must be compatible with existing software or hardware. To ensure the vendor stays committed to resolving all issues, consider holding back a portion of the payment until acceptance is achieved, or tie payment to achievement of certain milestones.

Related content
Changes in federal estate and gift taxes offer planning opportunities: ow.ly/aMzgP

The who, where, why and when of physician contracts: ow.ly/aMzkM

 

Do demand financially backed service levels.

With many vendors now offering systems delivered as “software as a service” or from the “cloud,” performance issues are not confined to the walls of the practice.

Connectivity, bandwidth and load on the vendor’s systems can all impact the day-to-day operations of the practice, and continual poor performance can reduce buy-in and confidence in the system. To address these concerns, ask the vendor to commit to or guarantee certain levels of uptime, availability and performance of the technology or system. These are typically called service levels.

In addition, consider asking the vendor to provide service levels for support issues, such as time to return a phone call or email. In all cases, to ensure that the agreed service levels have “teeth” and are not just window dressings, practices should demand a credit of fees in the event a vendor fails to meet a service level, with multiple or repeated failures giving the practice the right to terminate.

Do have all agreements reviewed by your attorney.

When you purchase a product or service, you will need to sign various agreements, and you are responsible for all terms and provisions included in the documents.

In addition to the various vendor contract documents (such as software license, subscription or services agreement), there will likely be numerous exhibits, schedules and appendices. The devil is in the details of every single document.

Beware vendor proposals, quotations, statements of work or policies that include legal terms that you are told are standard. Don’t assume they don’t require legal review. Be on the lookout for “moving targets,” such as terms contained on a vendor’s website or vendor policies that are subject to change. Consider attaching the current version to the contract and requiring the vendor to seek your approval before it can be changed.

Regardless of what the sales team told you, if a provision is important or meaningful, get it in writing and make it part of the contract. Part of the reason to have your attorney review the documents is that you may not know what to ask for or expect as part of the agreement. When in doubt, err on the side of over inclusion.

Don’t assume pricing is all-inclusive.

It is imperative that you understand what the purchase price includes and excludes.

Get the total cost for the entire purchase. Understand the incremental costs if you add physicians or staff to the technology. Understand the costs if you need to delete a user because he or she is no longer employed by the group. Recognize there may be a cost if you are switching from paper to electronic. Who will pay these costs? Is there an annual maintenance fee? Will your fees automatically increase over a period of time? Are there any caps on fees?

Do plan for the worst case.

No one likes change, and most people do not welcome change. Changes in technology can be disruptive, frustrating and make one question the original decision. There can be installation delays, training delays, and other glitches.

You will get through the process, though it may take longer than anticipated. Be sure that everyone—from the most senior physician to the most junior staff person—receives meaningful and directed training from the vendor. Delineate in the agreements how much time and resources the vendor will devote to training and follow-up questions. If you are switching from one system to another, make sure both systems are operational for a short period of time to ensure no data is lost or changed.

Do schedule patients accordingly.

During the initial transition phase, it will take longer to enter the data from a patient visit. Leave ample time so physicians can accurately enter all data related to patient interactions. As the physician becomes more nimble with the system, there will be less down time between patients. Set realistic expectations accordingly for everyone to minimize angst and anger.

E-health care is here to stay. Getting there and staying technologically current in the most cost-efficient and least disruptive manner is a challenge and an opportunity to improve the performance and perception of the physicians and the medical practice as a whole.

Evan J. Foster, Esquire (efoster@saul.com) is an associate in Saul Ewing LLP’s Healthcare Technology Contracting group. He advises physicians, physician practices, hospitals and health systems regarding the acquisition of health information technology and related data privacy and security issues. Bruce D. Armon, Esquire (barmon@saul.com) is a partner in Saul Ewing LLP’s health care group. He assists physicians, physician groups, health care entrepreneurs and hospitals with regulatory, corporate and transactional matters

 

0 Comments

Negotiate an employment contract with ease

By Kyle Claussen, JD, LLM | Legal Matters

 

>>Download this article as a PDF to print or share!

Negotiating an employment agreement can be a nervous and stressful time for many physicians. These agreements are worth hundreds of thousands of dollars and will define when and where you practice medicine. Here are a few tips that will reduce your anxiety.

Negotiations start immediately.
The moment you begin speaking to a recruiter, you are negotiating your position. It is important to be open and honest with an employer. You should not commit to any specifics regarding salary requirements or work schedule until you have evaluated the offer as a whole.

It is best to discuss compensation only after an official offer has been made and after you have evaluated the facilities, support staff and benefits package. Remember that even “standard” contracts that “every physician has signed” can be changed

Prioritize your needs.
Every physician has unique needs in their employment. A four-day work week may be the most important factor for a new mother. A resident with large amounts of student loan debt may need to maximize compensation.

Only you know what your needs are, and you should communicate to the employer which terms of the proposed agreement are truly “deal breakers” during your first round of negotiations.

Contract terms to consider include:
• Compensation
• Call schedule
• Malpractice tail coverage
• Equipment
• Non-competes

Know your value.
Underestimating your value can substantially reduce your compensation. It is rare that the first offer made is the best you can receive. Conversely, overestimating your value can lead to an offer being pulled and a relationship with the organization destroyed. To determine your value, consider geographic specific salary data, competing offers, length of time the position has been open, total revenue you will generate, and the number of candidates being considered for the position.

Keep “Plan B” alive.
As Yogi Berra said, “It’s not over ’til it’s over.” You should never turn down an offer until you have determined with 100% certainty that you will not be accepting the position. Negotiations can take many weeks and occasionally will turn sour. If this happens, you will need to have another option or two for consideration.

Get professional guidance.
Any contract (employment or otherwise) that is worth a significant amount of money should be analyzed by a professional. Attorneys specialize in practice areas just like physicians. You would not go to an orthopedic surgeon for a colonoscopy, and you should not go to your cousin (or brother, aunt, etc.) who practices family law to review your employment contract.

Find a health care attorney with experience reviewing physician employment agreements. As Benjamin Franklin stated, “an ounce of prevention is worth a pound of cure.”

Kyle Claussen, JD, LLM (kclaussen@ resolvephysicianagency.com) is vice president at Resolve Physician Agency, Inc.

 

Related

 

0 Comments

Protect your outside investments

If you're investing in an outside company, make sure you follow a proper respect for the process.

By Bruce D. Armon, Craig F. Zappetti | Legal Matters | Spring 2012

 

Throughout your career, you will likely be presented with opportunities to invest in businesses that are separate from your medical practice. These opportunities can present the chance to participate in a business as an investor while allowing you to maintain focus on patients and growing your practice. Though these opportunities can be lucrative building blocks for wealth generation, they can also present significant risks that, if realized, can be extremely costly and detrimental to your reputation.

These risks may be present even if the promoter of the investment opportunity is a relative or friend. For purposes of this article, we are not focusing on health care ventures. For those opportunities (such as an ambulatory surgery center, medical office building, etc.), in addition to the tips below, you must ensure compliance with all federal (e.g., Anti-kickback and Stark) and state health care fraud and abuse provisions. more »

 

0 Comments

Post-residency job hunting for the IMG

Immigration issues for international medical graduates

By Bruce Armon and William Stock | Legal Matters

 

The search for post-training employment is often fraught with anxiety. For an international medical graduate, or IMG, there are extra levels of complexity to consider and negotiate when engaged in the job hunt and interview process.

Though many prospective employers are comfortable with the visa issues for an IMG, others are not. IMGs need to be advocates for themselves, but also recognize that there may be more limited professional opportunities for IMGs than for non-IMG colleagues.

An IMG and a prospective employer must each understand their respective rights and responsibilities and how they can—and should—effectively work together to ensure an IMG can start employment in the most timely way.

J-1 visa
There are two common temporary visas for IMGs: the J-1 and the H-1B. In general, the J-1 is specifically for training and the H-1B is for any form of professional-level employment (including as a resident).

Physicians already in J-1 status at the commencement of their residency will remain in J-1 status if they wish to participate in any fellowship training. The J-1 has an important benefit in that its duration is directly tied to the length of the training—thus a resident seeking to become a sub-specialist through a program of four or more years of post-residency training will be able to do so while on a J-1.

J-1 IMGs also have limitations. A J-1 cannot moonlight as a means to supplement income. The other principal limit is potentially more restrictive. Under the “two-year rule,” a physician who receives graduate medical education or training in J-1 status must reside in his or her home country for two years before obtaining H-1B status or a “green card,” unless the physician can find employment in the United States that qualifies for a waiver of that requirement.

Another J-1 limitation is that relatively few fellowship programs will accept IMGs as fellows until the individual has permanent residence (i.e., a green card).

more »

 

Topics: , , , ,

0 Comments

Sharing your wealth

Changes in federal estate and gift taxes offer planning opportunities

By Bruce D. Armon, Esquire, and Bob Louis, Esquire | Legal Matters | Summer 2011

 

Benjamin Franklin said that nothing is certain in life but death and taxes. As someone said more recently, taxes are the only one of the two that you can postpone or reduce.

Though you can’t avoid the inevitable, you can and should take steps to protect those closest to you with careful estate planning. This applies whether you are a multimillionaire at the twilight of your career or a physician who recently finished or is about to finish training.

In the last few weeks of 2010, Congress and the president agreed to extend the so-called Bush tax cuts through 2012. The same law made several very favorable changes in federal estate and gift taxes, and these changes offer opportunities for significant tax savings.

Where we started

In 2001, the federal tax law was amended to increase the threshold exemption from federal estate taxes. Over a period of years, the exemption rose to $3.5 million per person, which meant that, with careful planning, a husband and wife could pass as much as $7 million to the next generation free of federal estate tax.

Then, in 2010, the federal estate tax expired for one year. Those who died during 2010, which included some very wealthy people, could avoid the estate tax altogether. Many people thought Congress would act long before the year of a no estate tax arrived, but stalemate in Washington, D.C., prevented any action from being taken.

The 2001 law provided that the estate tax was to spring back into existence in 2011, but at the rates and with the exemption that were in effect before the 2001 law. That meant that the estate tax rate could be as high as 55 percent, with an exemption of only $1 million. A reversion to that law would have “caught” many people in the federal estate tax, since the tax is imposed on, among other assets, retirement accounts, certain life insurance and homes owned.  more »

 

Topics: , ,

0 Comments

The who, what, where, why and when of contracts

Before signing on to a new practice, ask these important questions.

By Bruce D. Armon | Legal Matters | Winter 2011

 

Before signing on to a new practice, ask these important questions.

There are five primary “W” questions that every physician should ask and understand before signing their employment contract.

1. Who is the employer?

It is critical to learn as much as you can about your prospective employer. If the employer is a private practice, what turnover (if any) has the employer had in its leadership? If the employer is a hospital, what is the relationship that it has with its employed physicians? Does the employer share your short- and long-term objectives? Does the employer have a good reputation in the medical community and the community at large? From a corporate standpoint, does the employer have affiliate entities? Will you ever have the opportunity to have an equity piece in any of the affiliates?

2. What does the employer expect?

After a few in-person meetings and e-mails, you may not have a good sense of the employer’s professional expectations. A properly drafted employment contract should delineate your and the employer’s rights and responsibilities. Don’t be surprised on your first day of work by the staff or equipment (or lack thereof) in the office. Understand the path to promotion. What are the benchmarks related to each step in advancement? Get as many as you can described in detail in the contract. The disappointment of not fulfilling expectations will be compounded by not knowing, in advance, what you were supposed to do.

3. Where will you be working?

Many employers have multiple practice locations. Depending upon the community where you live, you may have to travel great distances—even across state lines—to get from one office to the other.

There can be advantages and disadvantages to working in the main office versus a satellite office. The feel of the practice may be very different in one practice location versus another. This can be dictated by the physician(s) who regularly work in a practice location, the staff who are primarily based at a practice location, and even the patient population that frequents a particular location.

Will you be visiting more than one office in a single day? You should be particularly aware of this circumstance if your compensation is based upon productivity.

Because you will have down time while you are commuting from one office to the next, this will negatively impact your productivity compensation even though you are still making a meaningful contribution.

more »

 

Topics: ,

0 Comments

Shedding light on your moonlighting contract

Before you accept any moonlighting opportunity, make sure you take into account these contract considerations.

By By Bruce D. Armon | Fall 2010 | Legal Matters

 

The economy is still uncertain, and physicians are not immune to these challenging times. You might be tempted to create your own stimulus package by moonlighting.

Moonlighting usually refers to a resident or fellow taking a second, part-time, clinical job. In most cases, the reason for taking the second job is solely economic: to earn more money to supplement your salary.

The moonlighting contract protects you and the party for

whom you are working.

Moonlighting is, however, no longer the exclusive domain of residents and fellows. In an era of decreasing reimbursements from third-party payers, physicians with varying years of professional experiences and specialties are attracted to the opportunity to earn extra dollars by engaging in extracurricular clinical engagements.

Whether you are a resident, fellow, junior attending or seasoned physician, there are important legal considerations you must address before executing a contract to be a moonlighter. And yes, you should execute a contract. Do not rely upon a handshake or an exchange of e-mails. The moonlighting contract protects you and the party for whom you are working. It also helps prevent amnesia when there is a disagreement or misunderstanding between you and your second employer regarding your respective rights and responsibilities.

Are you allowed to moonlight?

This is the threshold issue that must be addressed before you do any clinical (and, depending on your contract, non-clinical) activities for any other party besides your primary employer.

Imagine language in your contract with your primary employer that states: “During the term of physician’s relationship with employer, physician shall not engage in any activity that is competitive with employer unless physician receives the advance written permission of employer, and such approval may be revoked at any time.”

There are several questions that must be addressed:

  • What is a “competitive” activity? Is it clinical? Is it nonclinical, such as being an expert witness or dealing with intellectual property?
  • Is it tied to the radius of the contract’s restrictive covenant provision?
  • Is it tied to the hospital(s) or other ambulatory facilities where your employer’s physicians have privileges?
  • Is it limited to a particular specialty or a particular set of procedures, such as cosmetic, or cash pay versus third-party payer reimbursements?

Before you can safely take advantage of any moonlighting opportunity, you must get these issues addressed. To be sure you are not going to violate your primary employer’s contract, you should get these answers in writing, and have the same signed by you and your employer.

What is your limit?

There are some people, including physicians, who require very little sleep to function at an optimal level. However, your contract with your primary employer may not address your minimal sleep habits and needs and may simply state: “Physician shall devote his/her full time and attention to employer.”

What constitutes full time? Part of the answer may be dictated by your “normal” working hours. It may be unacceptable to work from 7 p.m. to midnight after working for your primary employer earlier in the day or having regular hours the following day. Is it OK to work a weekend shift for another employer when you have no regular office hours that day or on-call responsibilities?

 

Topics: , ,

0 Comments

Consent to Settle: Who Decides?

The consent to settle provision of a professional liability insurance policy can affect more than just a suit's outcome.

By Bruce Armon and Jennifer L. Beidel | Legal Matters | Spring 2010

 

NEITHER A PHYSICIAN NOR ANY PROFESSIONAL likes to be accused of wrongdoing or sued for negligence. Litigation is time consuming and can be filled with anxiety regardless of whether the dispute ends in a verdict or settles during the litigation process.

According to Americans for Insurance Reform, a national coalition of public interest organizations that supports insurance industry reforms, approximately 85,000 medical malpractice lawsuits are
filed annually. A physician who is sued and has professional liability insurance — most states require a physician to have this coverage—will generally have counsel appointed by his insurance carrier. A 2007 report published by the U.S. Department of Justice’s Bureau of Justice Statistics says that between the years of 2000 and 2004—the most recent period for which information is publicly available—approximately 95 percent of all medical malpractice claims settled prior to trial. more »

 

0 Comments

 

Return to Top

Page 3 of 41234