The do’s and don’ts of interview questions

What you should—and shouldn’t—talk about or ask when looking for a job.

By Bruce Armon & Ruth Rauls | Legal Matters | Summer 2020

 

Employers and employees are generally familiar with many of the basic interview do’s and don’ts. But in addition to federal protections, multiple states have statutes that must also be followed, in addition to state and local laws.

Before going on an interview, brush up on the sensitive topics of which both candidates and employers should be aware.

Background checks and prior convictions

Although background checks have become a normal part of hiring decisions, there are a myriad of state and federal laws that impact how and when these reports can be run, what information an employer can consider, and when a potential job candidate can be asked about their criminal record. Generally, the federal law that applies to the majority of background checks is the Fair Credit Reporting Act (FCRA). FCRA contains certain procedural requirements with respect to disclosure, authorization and notice to a job applicant.

However, based on the significant number of states that have passed “ban the box” laws, FCRA is not the end of this discussion—it is only the beginning.

Ban the box laws include a prohibition of including a box on employment applications regarding prior criminal history or convictions. These laws also generally prohibit employers from verbally asking job applicants about their criminal histories during the initial employment application process.

Generally, questions about criminal history or prior convictions should be avoided unless there is a connection between the conviction and the position, or if there is a specific statute or regulation permitting such questions based on the position. As a practical matter, a prospective employer can review the National Practitioner Data Bank, the records of the candidate’s state medical licensing board, a professional credentialing organization and other internet searches to gather as much publicly available information as possible.

Salary history

Multiple states now ban employers from inquiring about an applicant’s salary history. Some states have enacted these laws in an effort to eliminate at least one contributing factor to gender pay disparity. Thus, interview and screening practices need to be adjusted or revised to focus on skill set over salary.

In states with these laws, asking questions about an applicant’s desired salary is OK, but those asking about prior salary are not. To determine what can and cannot be asked about salary history in an interview, employers and candidates alike should understand their state’s laws.

Citizenship and national origin

Generally, there is an understanding that questions regarding an applicant’s citizenship or national origin are off limits in the interview process. However, there are questions that may appear innocuous that are in fact problematic for an employer.

Questions that run afoul of laws include those about an applicant’s birthplace, the birthplace of family members, and asking whether the applicant has the legal right to work in the U.S. with an emphasis on a green card or visa.

Instead, questions, if any, should be limited to “are you legally authorized to work in the United States.” If foreign language skills are relevant to the position, it would be permissible to inquire about the applicant’s ability to read, speak or write a foreign language. However, general inquiries regarding how a person learned to speak a foreign language could prove problematic.

Sexual orientation

Sexual orientation has been front and center in many employment-related litigations over the past several years. In order to avoid any issues on this topic, an interviewer should avoid direct questions on this topic as well as questions designed to detect a person’s sexual orientation or gender identity. Those kinds of questions include those about marital status, spouse’s name or inquiries about household members.

There is a difference between being friendly and trying to understand a candidate’s personal life and crossing the line into subjects or areas that have no relevance to a prospective employee’s ability to do a job.

Age

Most employers and employees understand that questions regarding a candidate’s age are off limits in the interview process. However, much like the discussion on citizenship and national origin, questions that try to get this information indirectly are still prohibited.

For example, asking during an interview what year an applicant graduated high school or when they first started working should be avoided.

The laws governing the interview process continue to change. Employers and candidates both need to stay apprised of what’s appropriate and what’s not throughout the interview process.

Bruce Armon is chair of Saul Ewing Arnstein and Lehr’s health care group. Ruth Rauls is a member of the Saul Ewing Arnstein and Lehr’s labor and employment practice.

 

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Navigating the job search as a foreign medical graduate

FMGs looking to stay in the U.S. need to take the time and complexity of the visa system into account.

By Bruce Armon & Amy Link | Legal Matters | Winter 2020

 

According to the American Immigration Council (AIC), there are more than 247,000 physicians with medical degrees from outside the United States who practice medicine in the United States—slightly more than a quarter of all practicing physicians in the United States.

These foreign medical graduates (FMGs) have specific legal issues to address when applying for their initial work visa.

This article describes the visa process generally—there is a veritable alphabet soup of immigration terms and acronyms—and important considerations for FMGs and prospective employers to address for physicians who wish to practice medicine in the United States upon the completion of a formal training program.

The importance of FMGs

From a health care delivery perspective, FMGs play a critical role in ensuring access to care throughout the United States. For example, the AIC reports that nearly a third of all physicians in areas across the U.S. with the highest poverty rates are foreign trained. Without FMGs, many areas of the United States would have even less access to physician care.

H1B, J1 and O1 visas

Most FMGs enter the United States to complete their residency or fellowship program on the J1 visa, with a smaller number entering on the H1B visa. The J1 visa is a non-immigrant visa issued by the U.S. Department of State to research scholars, professors and exchange visitors who participate in programs that promote cultural exchange, especially to obtain medical or business training in the United States.

As an “exchange visa,” the J1 FMGs are subject to a “two-year home rule.” Under the home rule, J1 visa holders commit to return to their home countries after completion of their residency for a period of two years before they can apply for the H1B professional work visa and return to work in the United States.

If a J1 FMG desires to work in the United States prior to spending two full years abroad, the physician must first apply and obtain a waiver from the U.S. Department of State.

The only exception to the two-year home rule is the O1 visa, which is for people with extraordinary ability in their field that has been demonstrated by sustained national or international acclaim. The O1 visa requires a very high standard to qualify.

If a J1 visa holder qualifies for the O1 visa, they can change status from J1 to O1 without a waiver. Otherwise, all other J1 FMGs must first obtain a waiver or spend two years abroad before returning to work in the U.S.

There are various J1 waivers available, each with different requirements:

Conrad 30 Waiver. These are available to primary care and some specialist physicians. The Conrad 30 program permits individual states to accept up to 30 medical students per year. Requirements vary from state to state.

HHS Waiver. HHS waivers are only for primary care physicians working in locations with HPSA scores of 7+ that are:

  1. a health center as defined in the Public Health Service Act, and receiving a grant from the U.S. Health Resources and Services Administration; or
  2. a rural health clinic as defined in the Social Security Act; or
  3. a Native American/Alaskan Native tribal medical facility as defined by the Indian Self-Determination and Education Assistance Act

Appalachian Regional Commission (ARC). The ARC is available in Alabama, Georgia, Kentucky, Maryland, Mississippi, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Virginia and West Virginia.

Delta Regional Authority (DRA). The DRA is available in Alabama, Arkansas, Illinois, Mississippi, Missouri, Kentucky, Louisiana and Tennessee.

Hardship Waiver. The FMG must have a qualifying USC spouse or child.

Persecution Waiver.

Cap-subject and cap-exempt employers

In contrast to the J1 visa, FMGs in the United States on H1B professional work visas are not subject to the two-year home rule.

Upon completion of their training program, FMGs in H1B status are eligible to file a petition with U.S. Citizenship and Immigration Services (USCIS) to change employers. However, you must confirm whether the employer is a “cap-subject” or “cap-exempt” entity to better understand when you can begin employment.

The H1B visa program allots 65,000 visas plus an additional 20,000 visas for beneficiaries with U.S. master’s or higher degrees per fiscal year via a random lottery system. FMGs are included in the total 85,000 visas.

Traditionally, the annual lottery is held the first week in April and allows H1B cap-subject employers to file visa petitions for workers to start on October 1 of the same year.

A prospective employer should initially determine whether your current H1B visa is with a cap-subject or cap-exempt entity. If you’re with a cap-subject entity, you’ve already been counted against the annual cap and are eligible to change your employer immediately. However, if your H1B is with a cap-exempt entity, and the new employer is a cap-subject entity, you would be subject to the annual lottery.

Additionally, your prospective employer must determine if they qualify as a cap-subject or cap-exempt entity for H1B purposes.

The United States immigration system is very complicated—and is the subject of intense national debate. FMGs are an important component of ensuring access in many geographic areas in multiple specialties during an era when the demand for physicians outpaces supply.

Bruce Armon is chair of Saul Ewing Arnstein & Lehr’s health care group and has worked with hundreds of physicians and employers with regard to transactional, contract, compliance and regulatory and reimbursement matters. Amy Link is a highly skilled immigration practitioner and member of the firm’s global immigration practice group, where she specializes in all employment-based immigration matters.

 

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Don’t ask, don’t tell

Your contract’s non-solicitation provision guides your communication when it comes time to leave the practice.

By Bruce Armon | Fall 2019 | Legal Matters

 

Most employers and employed physicians understand their employment contract may include a non-compete clause prohibiting the now-former physician employee from “competing” against the now-former employer within a certain geographic radius for a certain period of time.

One of the issues often overlooked by employers and employed physicians are the scope of “solicitation” activities that may occur following the separation.

Don’t tell patients

As a general principle, the patient always has the choice of who should be the patient’s treating physician. The challenge for you is what you can and can’t tell a patient before or following your departure. Your employment contract may include specific language regarding the permitted “solicitations” that can and can’t occur, such as:

During the term of the Agreement and for two years following the termination of physician’s employment, physician shall not directly or indirectly solicit any patient of employer treated by physician during the final two years of physician’s employment.

Depending on your specialty, you may have regularly scheduled appointments with the patient, including visits that are scheduled on dates following your planned departure from the practice.

Be very careful to avoid saying, “I won’t be here for your next appointment.” Your employer may regard such a statement as an “indirect” solicitation because you’re basically inviting the patient to reply to this statement by asking, “Why not? Are you leaving the practice? How do I get in touch with you?”

This is exactly what the practice has instructed you not to do. You are best served by not saying anything to the patient, even if you know the patient has a follow-up appointment scheduled following your departure date.  

The non-solicitation clause in your employment contract may also include language stating, “The physician may not send announcements or publications regarding a new office or affiliation to the employer’s patients.” Language like this can be tricky to navigate and may have unintended consequences.

Ideally, you and the practice both agree on the “script” that the practice will communicate to any patient who learns that you’re leaving or have departed the practice.

The script may be as simple as:

Thank you for asking about Dr. [Name]. Dr. [Name] is [leaving our practice] or [no longer with our practice]. We wish Dr. [Name] the best. We are happy to continue to care for your medical needs. If you would like to contact Dr. [Name], call [phone number]. Thank you.

The practice may use a printed card to share this information or instruct all front desk staff and others who interact with patients to follow this script. The staff should not deviate from the script, and ideally you and the employer agree how long post-separation the script will be used.

An exception to the blanket non-solicitation clause may be appropriate if you had an established patient base that followed you to your current practice. You may be able to grandfather those patients who have historically followed you to ensure there can be direct communications with them.

As a practical matter, a patient often has the ability to independently locate you even if your former employer makes it more difficult for patients or claims to have no knowledge of your new practice location.

Your new employer would be wise to publicize your arrival in various forms of media—without mentioning the name of your former employer. An employment contract may specifically prohibit you from mentioning your former employer.  

A patient who elects to follow you to a new employer will have to complete a patient authorization to forward the patient’s medical records to a new employer. There very well may be a charge for the copying of these records, which is often governed by state law. Be aware there may be a delay in transferring the patient’s medical record; plan accordingly to ensure no interruption in patient care or adverse consequences.

From the practice setting’s perspective, there needs to be an awareness and sensitivity to not creating a patient abandonment situation. If the departing physician is the only physician in the practice setting with the ability to appropriately treat the patient (for example, you’re the only physician in that specialty in a multi-specialty practice), the practice must make arrangements to appropriately care for patient needs—which may include a referral to you. State law may describe what constitutes abandonment.  

Don’t invite staff to come with you

In addition to confronting patient non-solicitation issues in your employment contract, your contract may also include a staff non-solicitation clause that prohibits you from employing, engaging, contracting or soliciting the services of any employee of your former employer to work with you at your new practice. For some physicians, not having the ability to solicit or hire staff as colleagues in a new venture can make a professional transition even more difficult. Staff, like patients, have the freedom to work where they choose. However, if your employment contract includes a staff non-solicitation clause, be very careful about the outreach to staff asking them to follow you to your new employment setting. 

Start fresh on professional relationships

The third bucket that can be included in your non-solicitation clause, besides patients and staff, are for the practice’s professional relationships. Professional relationships could include referring physicians, professional advisors, nursing homes, surgery centers, ancillary facilities and any other entity with whom your practice setting regularly interacts.

Essentially, your current practice setting is instructing the departing physician to start “fresh” without the benefit of any of the professional relationships that helped make the practice setting successful.

Non-solicit clauses in your employment contract are just as if not more important than a non-competition clause. Understanding the impact of the language in the non-solicitation clause is critical. When departing from a practice, be careful to frame responses so that interested people don’t ask how they can find you in your new practice setting in a way that causes you to violate the terms of your employment contract and invite a dispute.

Bruce Armon is the chair of the health law practice at Saul Ewing Arnstein & Lehr LLP.He regularly provides legal advice to physicians and medical groups, hospitals and academic medical centers, and speaks to audiences about health care legal issues.

 

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An insurance primer for young physicians

From life to malpractice, the ins and outs of insurance are important for new physicians to know.

By Bruce Armon & Jay Weinberg | Legal Matters | Summer 2019

 

Physicians generally think insurance—life, disability, and professional liability—is too expensive or will never be needed. But it’s critical to understand what insurance policies do and don’t cover, the potential benefits and the actual cost of each kind.

Life insurance

Your employment setting typically dictates whether life insurance is part of your benefits package. For physicians who are employed by a hospital, hospital affiliate or a larger group (more than 20 employees), it is likely that group life insurance will be part of the benefits package.

With respect to a group life insurance policy, a physician should focus on these items:

Eligibility. How long do you have to work for that employer to become eligible for this benefit?

Coverage amounts. Often times, the amount of insurance is a multiple of your annual salary and includes a maximum cap on the amount payable. For example, a policy could state “3x the physician’s salary with a maximum benefit of $500,000.” These caps are typically far less than one’s actual insurance needs.

Additional “buy ups.” You may be able to purchase additional life insurance coverage than what is offered in the original group policy. Frequently, these buy ups will require you to undergo a medical screening. It is important for you to know, in advance, if the buy up policy can follow you to another job, or if it makes more sense to purchase an individual policy from the outset.

Cost. Do you, your employer or some combination pay for life insurance?

Portability. If you leave the job, is it possible to continue the policy? Generally, there is a low probability that you can transfer a substantial group life insurance policy into an individual policy even if you agree to continue to pay the annual premiums.

Conversion. Are you able to extend your coverage amount at a later date without having to answer any medical questions?

Medical underwriting. Does the life insurance policy require, as a precondition, that you answer questions with respect to your health history?

If you purchase an individual life insurance policy, you have considerably more freedom and flexibility to purchase additional coverage regardless of your employment situation or any limits included in a group life insurance policy. Depending on your individual circumstances, you may elect to receive the employer’s group life insurance policy “free of charge” and then purchase an individual policy catered to your specific needs.

Professional liability insurance

No physician wants to be accused in a lawsuit of not handling a patient’s care appropriately.

Most states and hospitals require a minimum amount of professional liability insurance. One of the key issues is making sure you know what type of coverage is provided, and confirm your responsibilities when you’re no longer employed by that organization.

There are two main types of professional liability insurance: claims-made and occurrence. A claims-made policy generally covers you for any negligent activity that occurs while you’re employed by that organization. Upon the end of your employment, in most circumstances, a “tail” policy will need to be purchased.

Assuming a tail policy is required, confirm before signing a new employment agreement whether you, your employer or some combination of both is responsible for paying for the tail policy.

An occurrence policy generally covers you for any liability action regardless of whether the action is brought during or after (but within the state’s statute of limitations) your employment. A tail is not required for an occurrence policy—and for that reason, an occurrence policy is typically more expensive than a claims-made policy.

Physicians who are moonlighting or working second jobs should confirm whether their primary employer’s professional liability coverage extends to the secondary employment setting. (In most circumstances, it will not.)

Disability insurance

Similar to group life insurance, physicians working for larger institutions will typically be offered group disability insurance. Unlike group life insurance, group disability insurance is an extremely complicated contract with many moving parts. There is no “one size fits all” disability insurance policy.

Unlike life insurance, where a physician can essentially purchase as much as is desired, there are strict limits on the amount of disability insurance a physician can maintain. Disability insurance companies do not want physicians to be “over-insured” because there would be no incentive to return to work if you were on disability with a very generous policy.

With disability coverage, there is a direct relationship between income and allowable coverage amounts. These items are important to understand when it comes to group disability insurance policies:

Definition of total disability. This determines if the physician is eligible to collect on a policy should there be an adverse change in health.

Elimination period. This is the number of days a physician must be out of work in order to qualify for a claim.

Mental/nervous/substance/psychiatric claims. In most group insurance policies, claims that fall into this arena are limited to 24 months.

Partial/residual claims. The vast majority of disability claims either start or end as a partial claim.

Pre-existing conditions. The vast majority of group disability policies have a provision that states the insurer will not pay benefits due to “pre-existing” medical conditions.

Taxation. Benefits received from the majority of employer-paid group disability policies are taxable.

Portability. Most group policies end when employment ends and will not transfer with you to subsequent employment.

Who pays. Often times, the costs associated with group long-term disability insurance are covered by the employer.

The benefits and exclusions in each of a life, professional liability, and disability policy are critical to understand. A benefit offered by an employer may not be as generous as it initially seems, and you may elect or need to supplement a policy individually to ensure you have adequate coverage in place if the unforeseen or unexpected occurs.

Bruce Armon, Esquire, is chair of the health care group at Saul Ewing Arnstein & Lehr, LLP. Jay Weinberg is an independent financial planner with 18 years of experience.

 

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An insurance primer for young physicians

From life to malpractice, the ins and outs of insurance are important for new physicians to know.

By Bruce Armon & Jay Weinberg | Legal Matters | Spring 2019

 

Physicians generally think insurance—life, disability and professional liability—is too expensive or will never be needed. But it’s critical to understand what insurance policies do and don’t cover, the potential benefits and the actual cost of each kind.

Life insurance

Your employment setting typically dictates whether life insurance is part of your benefits package. For physicians who are employed by a hospital, hospital affiliate or a larger group (more than 20 employees), it is likely that group life insurance will be part of the benefits package. With respect to a group life insurance policy, a physician should focus on these items:

Eligibility. How long do you have to work for that employer to become eligible for this benefit?

Coverage amounts. Often times, the amount of insurance is a multiple of your annual salary and includes a maximum cap on the amount payable. For example, a policy could state “3x the physician’s salary with a maximum benefit of $500,000.” These caps are typically far less than one’s actual insurance needs.

Additional “buy ups.” You may be able to purchase additional life insurance coverage than what is offered in the original group policy. It is important for you to know, in advance, if the buy up policy can follow you to another job, or if it makes more sense to purchase an individual policy from the outset.

Cost. Do you, your employer or some combination pay for life insurance?

Portability. If you leave the job, is it possible to continue the policy? (Generally, there is a low probability that you can transfer a substantial group life insurance policy into an individual policy even if you agree to continue to pay the annual premiums.)

Conversion. Are you able to extend your coverage amount at a later date without having to answer any medical questions?

Medical underwriting. Does the life insurance policy require, as a precondition, that you answer questions with respect to your health history?

Depending on your individual circumstances, you may elect to receive the employer’s group life insurance policy “free of charge” and then purchase an individual policy catered to your specific needs.

Professional liability insurance

Most states and hospitals require a minimum amount of professional liability insurance. One of the key issues is making sure you know what type of coverage is provided, and confirm your responsibilities when you’re no longer employed by that organization.

There are two main types of professional liability insurance: claims-made and occurrence. A claims-made policy generally covers you for any negligent activity that occurs while you’re employed by that organization. Upon the end of your employment, in most circumstances, a “tail” policy will need to be purchased.

Assuming a tail policy is required, confirm before signing a new employment agreement whether you, your employer or some combination of both is responsible for paying for the tail policy.

An occurrence policy generally covers you for any liability action regardless of whether the action is brought during or after (but within the state’s statute of limitations) your employment. A tail is not required for an occurrence policy—and for that reason, an occurrence policy is typically more expensive than a claims-made policy.

Physicians who are moonlighting or working second jobs should confirm whether their primary employer’s professional liability coverage extends to the secondary employment setting. (In most circumstances, it will not.)

Disability insurance

There is no “one size fits all” disability insurance policy.

Unlike life insurance, where a physician can essentially purchase as much as is desired, there are strict limits on the amount of disability insurance a physician can maintain. Disability insurance companies do not want physicians to be “over-insured” because there would be no incentive to return to work if you were on disability with a very generous policy.

With disability coverage, there is a direct relationship between income and allowable coverage amounts. These items are important to understand when it comes to group disability insurance policies:

Definition of total disability. This determines if the physician is eligible to collect on a policy should there be an adverse change in health.

Elimination period. This is the number of days a physician must be out of work in order to qualify for a claim.

Mental/nervous/substance/psychiatric claims. In most group insurance policies, claims that fall into this arena are limited to 24 months.

Partial/residual claims. The vast majority of disability claims either start or end as a partial claim.

Pre-existing conditions. The vast majority of group disability policies have a provision that states the insurer will not pay benefits due to “pre-existing” medical conditions.

Taxation. Benefits received from the majority of employer-paid group disability policies are taxable.

Portability. Most group policies end when employment ends.

Who pays. Often times, the costs associated with group long-term disability insurance are covered by the employer.

The benefits and exclusions in each life, professional liability and disability policy are critical to understand. A benefit offered by an employer may not be as generous as it initially seems, and you may elect or need to supplement a policy individually to ensure you have adequate coverage in place if the unforeseen or unexpected occurs.

Bruce Armon, Esquire, is chair of the health care group at Saul Ewing Arnstein & Lehr, LLP. Jay Weinberg is an independent financial planner with 18 years of experience.

 

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A physician’s guide to professional liability insurance

What to get in place when starting a new job—and what to do if a claim gets filed.

By Sarah Yates Reddy, ESQ. | Legal Matters | Winter 2019

 

Doctor or physician writing diagnosis and giving a medical prescription to female Patient

Knowing you’re covered by professional liability insurance and understanding what that means are two very different things.

For most physicians, the burden may be as simple as knowing the carrier, the policy limits and the process your employer requires for reporting potential or realized claims against you.

For others, such as those in a partnership, private practice, or shareholder group, you will need to research potential carriers, understand policy options and the potential impact on your practice should a claim be filed, and consult with professionals regarding the best policy for your practice.

What’s available

There are two basic forms of medical malpractice insurance: claims based and occurrence based.

A claims-based or claims-made policy provides professional liability coverage for incidents that occur and are reported during a period of coverage by a particular carrier.

What’s important to understand with this type of policy is that both the incident and the claim must occur during the period of coverage for the policy to cover the claim.

This is important to understand because most states provide a statute of limitations on professional negligence claims and thus the claim for any given incident may occur within two to five years after the occurrence.

If you have a claims-based or claims-made policy and you leave your employer or your current employer changes carriers, you are best advised to seek out “tail” coverage. Tail coverage will extend the prior claims-based coverage and protect you should a claim arise later.

It will be important to review your employment contract to see if your current or past employer is responsible for payment of this coverage, if you are bound to initiate your own tail coverage, or if the agreement is silent on tail coverage.

The most important thing to remember with any type of coverage is that all dates of practice are covered by a sufficient policy.

Occurrence-based policies are far more desirable. So long as the incident claimed occurs during the period of coverage, the claim will be covered by the policy even after your departure from the group or change in coverage. This option offers the most consistent and predictable coverage.

It’s important to note that the employment contract should specify the amounts of coverage—at a minimum, the amount of coverage per claim and the aggregate amount of coverage. These amounts should match what is either required by your state as minimum coverage or be reasonably sufficient for your area of practice. There is also the option to elect for greater amounts of coverage.

What to do if a claim is filed

Most employment contracts specify that if you are aware that a claim has been filed against you, or you reasonably believe someone may file a claim against you, it must be immediately reported to the employer.

If you believe a claim will be filed against you or learn that a claim has been filed against you, it is of utmost importance to review your employment contract for direction. You should examine the time frame for reporting to your employer, the information you should provide to your employer, and the exact contact information for reporting to the employer.

More often, the physician learns about a claim from the employer. This is because the insurance carrier is often notified of the claim prior to filing a lawsuit, and that carrier in turn contacts the insured, which is the employer. It is also not uncommon that the employer will be serviced with summons and notice of the lawsuit before the physician.

When this occurs, the employer will likely contact you and explain the process from that point. You may or may not be contacted by the insurance carrier. You will likely be contacted by the law firm or attorney elected to represent the insured for information or clarification on the facts of the case.

If for any reason you learn that a claim has been filed against you but you believe you are not covered or no attorney is appointed to represent you, it is important to immediately seek out the advice of an attorney who specializes in medical malpractice defense.

Sarah Reddy is an Oklahoma licensed attorney and partner with Reddy & Feldhake, P.C., and associated as counsel with Premier Physician Agency, a national consulting firm specializing in physician job search and contracts.

 

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What you need to know before signing

Before starting a new job, know your rights and obligations under your contract’s terms and termination clause.

By Sarah Yates Reddy, ESQ. | Fall 2018 | Legal Matters

 

Businessman signing contract making a deal.

Before exiting an employed position, you must know your obligations under the termination clause of your employment contract. So before starting a new job, be sure you know and understand your contract—including what will happen should you leave.

The termination process

Termination is arguably the most important provision in an employment contract. It will spell out if an employer or physician may terminate the contract with or without cause, or if the contract may terminate spontaneously by the terms of the contract or operation of law.

The most preferable contract will allow either party to terminate the contract without cause by prior written notice within a one- to three-month notice period.

With this option, both parties have equal bargaining power and equal access to terminate an employment relationship that is no longer desirable. In this scenario, the physician may terminate the contract by simply providing the employer with advance written notice. An attorney can help you review the notice period, what should be contained within the body of the written notice, how and where to send the written notice, and which clauses of the contract will cease and which will survive termination.

When a contract is terminated for cause, the parties may have more obligations that survive termination than if the contract is terminated without cause.

The reasons an employment relationship may be terminated for cause should be clearly listed and explained within the body of the contract. An employer will typically release a physician with cause for reasons associated with the physician’s inability to continue practicing medicine, including suspension or revocation of license, or felony criminal charges or convictions. The physician will typically have the right to terminate for cause if there is a material breach of the contract that the employer fails to cure.

When it is the physician who is terminated for cause, depending on the language of the contract, the physician may be entitled to some type of appeal.

Regardless of the mode of termination, it is imperative that you immediately consult with a qualified attorney because the rights and obligations of each party will vary widely from contract to contract. You’ll want to be well-informed of any obligations or remedies the contract provides.

Post-termination obligations

Regardless of the manner in which the employment contract is terminated, you and your former employer will have residual obligations to one another that should be clearly outlined in the employment contract.

It is possible that both the employer and the physician may be able to insist on additional duties and tasks of the other party. The common obligations to consider will include billing or record keeping, return of any and all property of the employer, reconciling of the financial obligations of each party, and clarification of all surviving contract clauses.

Pay careful attention to confidentiality, non-disclosure, non-solicitation, non-disparagement and non-compete provisions. Each clause will carry equal legal weight for you, but non-compete provisions are the most immediate concern. Non-compete clauses, also called restrictive covenants, are a restriction on the physician’s employment or practice after the expiration of an employment contract. Prior to entering a contract, carefully consider the level of restriction, including the time period, the designated range of restriction and the availability of buy-out provisions or mutual agreements to release the physician from the restriction.

After termination, consider whether or not the restriction is enforceable, whether or not the circumstances of the termination trigger the restriction, and whether or not this restrictive covenant includes a restriction on the solicitation of your former employer’s patients or employees.

By consulting with a qualified attorney with expertise in physician contracting before you sign your employment agreement, you will be certain that the terms of possible termination are fair and reasonable.

Sarah Reddy is an Oklahoma licensed attorney and partner with Reddy & Feldhake, P.C., and associated as counsel with Premier Physician Agency, a national consulting firm specializing in physician job search and contracts.

 

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Before you leave…

Current practice not working out as you’d hoped? Consider these before you start a job search.

By Bruce D. Armon | Legal Matters | Summer 2018

 

Man followed by ideas

Most physicians do not enjoy switching jobs. The entire process can be disruptive personally and professionally—and the new opportunity may not turn out to be a better job after all.

Beyond those considerations, there are important business and legal issues that should be part of your evaluation process before you make a change.

Are you confident about your professional liability insurance?

If your current employer provides your professional liability insurance, it’s imperative to confirm the end date of the policy and the type of policy provided. Your employer should be able to provide a “face sheet” that confirms the start and end date of your coverage.

If your current employer provides an occurrence policy or participates in a slot policy, you should be covered for every professional liability incident that occurs while you worked for the employer, regardless of when a suit is commenced.

If the employer provides a claims-type policy, you or some combination of you and the employer will be required to purchase a so-called “tail” insurance policy upon the termination of your employment. The tail policy provides professional liability coverage for incidents that occurred while you worked for the employer—but for which a suit was not filed until after you no longer worked there.

Tail insurance can be expensive and unexpected. A primary care physician’s tail insurance policy could cost a low five figures; a specialist’s could cost in excess of six figures.

The insurance company expects payment of the tail policy upon the date of your termination of employment, though it may allow for a months-long payment plan.

Before you switch jobs, review your employment contract to confirm whether your current employer provides occurrence or claims-type policies. A claims-type policy will likely require the purchase of a tail policy.

Ideally, you negotiated payment of the tail into your signed employment agreement. If this issue was not addressed, then you and your current employer should execute an amendment that defines respective responsibilities.

If you’re not able to agree on the terms of the tail insurance payment, ask your potential new employer if it will pay for your tail insurance for your work for your soon-to-be-former employer. Payment may be made directly by the new employer or as part of a loan that is worked off in sweat equity.

Alternatively, the new employer may purchase what is often referred to as “nose” coverage. Nose coverage effectively back-dates the new employer’s professional liability coverage to cover the physician’s work for the soon-to-be-former employer.

For financial and legal reasons, it is imperative that any physician transitioning jobs ensures the tail insurance is resolved before the job switch becomes official.

Have you been paid for what you earned?

Physician contracts often include bonus opportunities in addition to a base salary. Sometimes the bonus opportunity is in lieu of a higher base salary. If the bonus is not earned, paid or achievable, you could be earning less compensation than you should.

As part of your transition from one job to the next, be sure the timing of your switch does not negatively impact any bonus payments.

For productivity bonuses, it is critical that you understand:

  • When you would get paid the bonus
  • The period of time for which the bonus is based
  • Whether the bonus will be pro-rated
  • How the bonus is calculated

Your contract may state the exact date or month in which an earned bonus is paid, or that the bonus is to be paid after the completion of the contract, calendar or fiscal year. The contract could also state that you must be employed there on the date the bonus is to be paid. If there is language like this in the contract, decide your transition dates accordingly.

For productivity measurements, your bonus may be based on wRVUs produced personally by you or cash collections attributed to you. wRVUS should be able to be calculated as of your last day of work, assuming you’ve completed all medical records and documentation for the billing staff.

Unless you work in a concierge (cash-only) practice that collects full payment on or before the date of service, there will be a lag in the collections attributed to you for bonus calculation purposes. Confirm that the “trailing collections” will be included in the bonus calculation, and understand for how long (e.g., 60, 90 or 120 days) those collections will be tabulated.

If it’s not already in your contract, confirm whether the bonus is pro-rated. For instance, if you’re employed for half of the bonus period, the wRVU or collections threshold should be based on achieving half of the contractually stated thresholds.

If the bonus threshold is based on quality outcomes or achievements, understand the period for which the goals are measured, whether it is possible to pro-rate the measurement, and who determines whether a quality outcome or achievement has occurred.

For instance, if one of the benefits is based on “group” performance, it may be difficult to pro-rate an individual’s performance. By contrast, it may be possible to monitor and evaluate the performance of individual goals up to and including your last day of employment.

The timing of the payment for satisfying quality outcomes or achievements may be tricky, especially if a payer or some other third party (like a hospital or ambulatory surgery center where you have privileges) is involved in measuring the performance outcomes.

Have you identified these other obligations?

In addition to being cognizant of the professional liability insurance and bonus issues, you should be astutely aware of any post-employment restrictions that could impact your ability to switch jobs:

  • Non-compete, non-solicit and non-interference clauses
  • The impact of your change to various benefits, such as profit-sharing or a pension
  • The required notice period
  • The timeline for licensing and credentialing when considering a new hospital or state

When switching jobs, you want smooth, timely and congenial transitions. Being aware of these important considerations can help.

Bruce D. Armon is chair of the Saul Ewing Arnstein & Lehr health law practice. He regularly counsels physicians, physician groups, organizations and hospitals with respect to physician transitions.

 

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Is your tail covered?

What you need to know about malpractice insurance.

By Ryan Rekieta | Legal Matters | Spring 2018

 

Wooden gavel on table. Attorney working in courtroom.

For many physicians new to practice, it may seem like a load off when the practice or system they plan to join offers a contract that includes picking up the tab for their malpractice insurance. That’s just one less thing to worry about, right?

Unfortunately, even those physicians may wind up with sticker shock a few years down the road when they leave for another practice opportunity. That’s because they didn’t know about, or fully consider, the importance or huge cost of the tail coverage necessary when making a practice change. Yet it’s an expense that can be avoided if negotiated into an employment contract before signing.

Claims-made malpractice insurance and tail coverage

The most common and widely used malpractice insurance is claims-made malpractice coverage. Claims-made insurance covers a physician for any alleged act of malpractice that takes place and is made with the insurance carrier while the policy is in effect.

This type of malpractice insurance is especially popular with physicians new to practice because of the pricing model.

“All the malpractice insurance carriers extend a new-to-practice discount, which reduces the premium significantly in the first, second and third year a new physician is with the carrier as they build their patient load,” explains Andrew Hawkins, a medical malpractice insurance broker with nearly 30 years of experience. After five or six years of practice, premiums level out.

However, since malpractice claims often are not made until years after the alleged instance of malpractice occurred, if a physician with claims-made coverage switches insurance carriers due to a practice change (or for any reason), the physician will not be covered if a claim is filed against his or her previous carrier, leaving a gap.

There are two options to address this gap in insurance: purchasing tail coverage or transferring “prior acts” to a new policy. Tail coverage will typically cost 200 to 300 percent of the underlying premium and is purchased from the carrier a physician is leaving. Having prior acts (aka “nose coverage”) covered by the carrier a physician is changing to is typically the better choice.

“It’s always a cheaper option to have prior acts transferred to a new policy and avoid the cost of tail,” says Hawkins. “Physicians should just make sure their contract with their group allows that transfer.” Occasionally, group employment contracts stipulate that a physician must purchase tail coverage if he or she leaves the practice—something physicians should seek to negotiate out in favor of a transfer.

The best option when it comes to claims-made insurance is to negotiate it into the employment contract to have the practice pick up the cost of tail coverage in the event of separation.

Other types of malpractice coverage

In addition to claims-made malpractice insurance, occurrence-based malpractice insurance is another option. Occurrence-based insurance covers a physician whenever the alleged act of malpractice occurred, regardless of when the claim is actually filed, meaning there is no need for tail or prior acts coverage. “Occurrence has a built-in tail policy, but it’s much more expensive and only available in a limited number of markets,” says Hawkins.

Some medical trusts operate claims-paid malpractice insurance coverage, which sets premiums based on malpractice claim payouts from the previous year and anticipated payouts in the coming year. As with claims-made insurance, tail coverage is necessary—and often hugely expensive—when ending a claims-paid policy. Additional drawbacks of this type of policy include premiums that may fluctuate unpredictably, strict rules on what is covered and what is not, and difficulty switching to a new carrier.

A plan of action

Every practice situation is different. When navigating your employment contract, make sure there is an answer to the question of who pays for malpractice insurance premiums while with the practice and tail coverage in the event of separation.

For the individual physician, the ideal situation is, of course, having the practice foot the bill. While it probably shouldn’t be a deal breaker if the practice does not pay for that coverage, knowing that tail or prior acts malpractice coverage will be necessary is the first step in planning for an almost certain big expense in every modern physician’s career.

Ryan Rekieta provides executive leadership for the Career Services team at Afferent Provider Solutions

 

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Your guide to the Stark law

The Stark Law is intended to prevent fraud, abuse and waste. Here’s what physicians need to know.

By Bruce Armon | Legal Matters | Winter 2018

 

law justice

Preventing fraud and abuse and enforcing existing federal fraud and abuse statutes remains a priority, no matter the future of health care reform. Maintaining these efforts saves dollars in the federal treasury and helps ensure accountability and discipline by all participants in the health care delivery system.

There are five principal federal fraud abuse statutes that are most relevant to physicians irrespective of practice specialty, years of experience, or practice setting: false claims act (FCA), anti-kickback statute (AKS), exclusion authorities, civil monetary penalties law (CMP) and the focus of this article, the Stark Law.

Why is it called the Stark Law?

In 1989, then-Congressman Pete Stark (D-California) introduced the Ethics in Patient Referrals Act. The bill was signed into law and is colloquially referred to as the Stark Law because of its principal sponsor.

What was the purpose of the Stark Law?

When the statute was enacted, it applied only to physician self-referrals for clinical laboratory services. A premise for the Stark Law was that the prohibition would eliminate any financial incentive for a physician to send a patient for unnecessary lab testing, and therefore reduce health care costs. Since its initial passage, the statute has been amended and there have been multiple sets of regulations published by the Centers for Medicare and Medicaid Services (CMS).

What does the Stark Law prohibit?

The Stark Law prohibits a physician from making referrals for certain designated health services (DHS) payable by Medicare to an entity with which the physician or an immediate family member has a financial relationship (which can be ownership, investment or compensation) unless an exception applies. The Stark Law also prohibits that entity from presenting or causing to be presented claims to Medicare for those referred services.

What is a designated health service?

There are 12 DHS categories: clinical laboratory services; physical therapy services; occupational therapy services; outpatient speech-language pathology services; radiology and certain other imaging services; radiation therapy services and supplies; durable medical equipment and supplies; parenteral and enteral nutrients, equipment and supplies; prosthetic, orthotics, and prosthetic devices and supplies; home health services; outpatient prescription drugs; and inpatient and outpatient hospital services. Each year, the federal government publishes in the Federal Register (federalregister.gov) a listing of certain categories of DHS by CPT code. The list is generally effective January 1 of that year.

Who is an immediate family member?

The Stark Law regulations define an immediate family member as husband, wife, birth or adoptive parent, child, sibling, stepparent, stepchild, stepbrother, stepsister, father-in-law, mother-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law, grandparent or grandchild, and spouse of a grandparent or grandchild.

What is a financial relationship?

A direct or indirect ownership or investment interest in any entity that furnishes DHS, or a direct or indirect compensation arrangement with an entity that furnishes DHS.

A direct financial relationship exists if remuneration passes between the referring physician (or a member of the physician’s immediate family) and the entity furnishing the DHS without any intervening people or entities.

There is an indirect financial relationship if between the referring physician (or immediate family member) and the entity furnishing the DHS there is an unbroken chain of any number of people or entities having ownership or investment interests.

What is the purpose of the Stark Law exceptions?

The Stark Law is a strict liability statute. The intent or lack of intent of a party is not relevant for purposes of the government’s analysis to determine Stark Law compliance. For physicians and health care lawyers, making sure that an arrangement fits squarely within the exception is critical. The requirements in an exception must be satisfied at the time when the referral is made for the DHS.

What are the categories of the Stark Law exceptions?

There are exceptions for certain ownership/investment interests; compensation arrangements; and both ownership/investment and compensation arrangements. Understanding and adhering to the exceptions (when relevant) is critical to achieving Stark Law compliance.

Where can I find the Stark Law regulations, and what happens if there is a violation of the Stark Law?

The regulations have been published in multiple phases since 1995. In addition to the actual regulation, the preamble accompanying each release of updated regulations (both proposed and final) provide critical insight.

A provider that violates the Stark Law must repay all Medicare funds that were paid under the improper arrangement. A Stark Law violation could also trigger an FCA or CMP issue for the provider and the potential for exclusion from the Medicare program.

Every relationship in which a physician is engaged could require a Stark Law analysis if the physician is making a referral for any DHS payable by Medicare to an entity in which the physician or immediate family member has a financial relationship unless there is an exception in the Stark Law. As a strict liability statute, the intent of the parties is not relevant and the consequences for noncompliance can be significant.

A physician must understand the flow of Medicare dollars and the financial ties between referring parties. Compliance with Stark Law and ensuring a provider is actively engaged in preventing waste, fraud and abuse is critical.

Bruce Armon, Esquire is a partner in the law firm of Saul Ewing LLP and chair of its health law practice. He regularly assists clients with fraud and abuse analysis and regulatory, contractual and compliance issues generally.

 

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