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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Got Your Employment Contract? Now What?

5 steps to take between getting an offer and starting your new practice.

By Matt Mingenback | Fall 2017 | Legal Matters

 

Businessman signing contract making a deal.

Just as finishing residency and passing boards are like the final pages of the prologue to a career in medicine, receiving a formal offer and the accompanying employment contract from a practice or health system opens the first chapter of what every new physician hopes will be a fairytale career. Knowing the steps new physicians should take before they ever see their first patient is key to a happy beginning.

Step 1: Understand what your contract covers

A medical employment contract isn’t something to be skimmed before passing it off to a friend who is an attorney to see if anything jumps out. What was promised in the interview and negotiation process doesn’t mean anything unless it is in the contract.

Every medical employment contract should clearly define three core elements: how to get in, how to get out, and how to get paid.

That means a contract should address the expenses the practice will cover and what you will be responsible for, as well as any expectations surrounding your performance, patient volumes and call schedule availability. It may or may not contain a non-compete agreement. The bonus or profit-sharing plan should be spelled out in detail. If the practice situation involves a net-income guarantee, the exact structure should be clear. Any medical employment contract should address malpractice coverage and how settlements are determined/handled. For private practices, there should be a section dealing with the path to partnership, if possible.

Step 2: Find an attorney to review the contract

Should an attorney review your medical employment contract before you sign? Not necessarily, but in most cases, yes. Regardless of the size of the organization offering the contract and whether it’s a “standard” contract or not, if there is anything you do not understand or have concerns about, ask an attorney who specializes in health care contracts to look at it.

Having it reviewed by a friend who is an attorney—but who doesn’t focus on medical employment law—is not sufficient. He or she likely doesn’t have the knowledge base needed to point out something that is off or that can be better negotiated in your favor.

Typically, an experienced health care attorney will cost at least $250 to $350 per hour. A contract review, depending on the complexity, may cost $2,000 or more (for reference, Afferent offers a flat rate of $750 for a contract review by a health care attorney). Reading the contract and noting any of your concerns—known as “redlining”—before giving it to an attorney can expedite the process and save money.

Before hiring an attorney to review the contract, ask about their process. Beware that organizations offering a cut-rate price for legal review of a medical employment contract may be outsourcing the review to another country, like India or the Philippines. Or they may only have a paralegal look at it before an attorney signs off without so much as thumbing through it.

Step 3: Apply for a state medical license

Obtaining a medical license from a state licensing board can take anywhere from 30 days to 9 months depending on the state.

Any issues surrounding medical licensing should have come up during the interview process, but there’s always a chance that something was missed.

Consider using the Federation Credentials Verification Service (FCVS) from the Federation of State Medical Boards when applying for a state license, which creates a permanent, lifetime portfolio of credentials you can use to speed up the process if you ever need to apply for another state license.

Step 4: Get settled in your new community

Rather than buying a house in a new city, consider renting for at least six months in the area where you and your family may eventually want to settle. By renting, you will be able to save for a larger down payment and determine if an area is the right location for work and play.

Additionally, more than 25 percent of new physicians leave their first practice within the first two years. Not being tied up in a mortgage increases flexibility and is one less thing to stress about if there’s an early separation from the practice.

Step 5: Start building your practice before you start

Don’t wait until your first day to start marketing yourself. Ask the organization if someone can introduce you to potential referral sources before you even begin. Draft a biography and ask the practice’s marketing person to post it online. Volunteer to write an article or blog post for the website or any publication with which the practice may have a relationship.

Give yourself a strong start

By following these steps, you can limit the amount of unknowns as you find a career and transition into practice.

Matt Mingenback provides executive leadership for the Career Services team at Afferent Provider Solutions.

 

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5 red flags to spot before you sign

Consider these potential red flags before you commit to a practice opportunity.

By Keith Herl, MHA, MBA and Matt Mingenback | Legal Matters | Spring 2017

 

The single most important factor for physicians in choosing whether or not to join a practice should be the quality of the practice—not its location, the compensation or any other factor. After all, most physicians will spend far more waking hours at work than at home. This is not a novel notion, but it does raise a key question: What makes a quality practice?

There is certainly no single correct answer to this question, and diverse personalities and skill sets will fit differently into a variety of practice cultures. There are, however, certain factors that indicate how well a practice is run (regardless of the market, size or specialty) and whether or not it may be a good fit for you. Spot any red flags upfront by considering these factors when evaluating a practice.

The reason the practice is hiring

There are typically two reasons a practice brings on a new physician: growth or the need to replace another provider. Either reason is certainly legitimate, but in the case of replacement, it’s key to get to the reason behind the vacancy. If the previous physician didn’t retire, the practice should be honest and specific about why he or she left. In many scenarios, it is reasonable for the practice to allow you to contact the physician who left. Additionally, it’s a good idea to find out whether the practice is replacing multiple providers in a short period of time, which may speak to a problem.

Though joining a growing practice is generally a good move, the practice should still be able to articulate their growth strategy and provide detailed projections about finances and patient volume that demonstrate that it is indeed smart growth. If it’s a new clinic in a new area, have they spent the time and money to conduct a formal market analysis? Have they set aside the capital needed to ramp up over the course of a two- to three-year period?

Patient volume expectations

By the time you complete residency or fellowship, you should have a pretty good idea of how patient volume translates into time (if not, speak to your attending and mentoring physicians). Though this does vary by specialty, the number of patients you see each day directly affects your ability to achieve the work-life balance you desire—and it relates to your risk of burnout.

This may seem like a simple, obvious fact, but two things may happen during the interview process that can cause you to lose sight of it. First, you may have an idea of the number of hours per week you would like to work but no idea of the number of patients or cases that translates to. Second, the practice, though well-intentioned, may try to sell you on taking a higher volume. Practices often promise that various efficiencies they have in place will help you see more patients in the same amount of time. In reality, this is rarely the case. Even a robust, well-trained support staff can’t make caring for 30 patients per day the same as caring for 22 patients per day.

The onboarding process (or lack thereof)

Whether a practice has an onboarding process in place can be an important predictor not only of how long you stay at the practice but also of your early career satisfaction. Onboarding processes will differ from practice to practice, but every practice should be able to explain what the process will be if you come onboard. You should never feel as though you’ll be thrown into the fire.

If a practice, for instance, would expect a new physician to see patients on his or her first day, it may be a sign of a chaotic work environment. Ideally, the onboarding process should include: shadowing one of the experienced physicians; learning practice workflows for scheduling, ordering supplies, billing, etc.; being trained on the EMR and any equipment; meetings with key staff members who head finance, operations and staffing; and general orientation (especially for large organizations).

In organizations with robust onboarding programs, it may be weeks before you see your first patient.

Staffing issues and turnover

An established practice without an established staff is certainly cause for concern. During your interview, ask how long the administrative and clinical staff have been with the practice—and how many staff have been with the practice for less than a year.

There are several other critical questions whose answers could also reveal staffing issues: Is there a nurse or medical assistant for every physician in the practice? How much of the work-up and charting are nurses and assistants allowed to do? Are credentialed support staff (registered nurses, medical assistants, nurse practitioners, etc.) practicing at the tops of their licenses—meaning are they carrying out tasks to the full extent that their education, training and certification allow?

The answers to these questions can reveal a lot about the efficiency of a practice and its ability to manage patient flow while taking as much busywork as possible off your plate.

You might also ask if there is a practice administrator on-site every day or most days. Is the administrator responsible for a number of other practices and therefore rarely seen? The only way to know a business is to be there. And in an increasingly complex practice environment, having someone to manage the day-to-day business operations is vital to improving the practice and the bottom line.

Transparency about frustrations

Health care is consistently rated as the highest-stress industry in the U.S., and it’s in a time of great transition. Every provider will have some frustration about their work. Asking about those frustrations starts an important conversation, and the practice should share those frustrations with you without hesitation. Whether a practice is willing to reveal its providers’ frustrations speaks to its transparency and culture. The frustrations you learn about may be a deal breaker or non-issue, but they’re something both parties should want you to know before you sign a contract.

No practice is perfect. Working to spot these five red flags can ease the path to finding the right fit. Choosing the right practice the first time can have a lasting impact on your career satisfaction and earnings.

Keith Herl, MHA, MBA and Matt Mingenback have more than 20 years of combined physician placement and retention consulting experience. They provide executive leadership for the career services team at Afferent Provider Solutions.

 

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Signing a letter of intent

How does a letter of intent differ from an employment contract? We break down what you need to know.

By Kyle Claussen, J.D., LLM | Fall 2016 | Legal Matters

 

A letter of intent (LOI) or “offer letter” outlines the terms of employment in a much simpler format than what will be presented in a contract. The LOI is a preliminary document based on the mutual interest and good faith of both parties. It acts almost as an informal promise between you and your future employer and can be an important mental step toward solidifying an employment agreement. As helpful as an LOI can be in giving you a sense of the terms of your full contract, you do need to scrutinize the components of the LOI before signing. Here are some of the potential pitfalls of signing an LOI without proper review.

Know: What you’re signing

Generally, an LOI will not be legally binding. It references a future employment agreement that will effectuate employment. There are instances, however, in which certain provisions within the LOI can, in fact, be legally binding. These provisions may include that you will negotiate exclusively with this employer for some period of time or that the negotiations will remain confidential. It’s easy to assume that, because the LOI is less formal than the contract, you can just sign it and look at the contract terms more closely later. This can be a critical mistake, however, because it may cost you leverage when you negotiate some of those major employment terms down the road. Do not sign an LOI unless you are certain that key outlined components such as compensation will meet your needs.

Here is an example of an explicit statement included in an LOI that ensures it is not binding:

“The proposed terms of this letter of intent are non-binding and for discussion purposes only. It is the intent of the parties that these terms and conditions may be modified or changed, in whole or in part, pending a binding agreement to be negotiated and executed by the parties. Furthermore, nothing in this section shall be interpreted as obliging any of the parties to enter into any agreement.”

Check: Is your LOI tailored to you?

An LOI or contract may work for one physician and be totally incompatible for another. When looking at an LOI, it may be difficult to determine whether it’s based on a one-size-fits-all contract. Look out for provisions that don’t reflect the actual position or match your scope of practice. Reusing contract and LOI templates is a much more common practice than you may think. You will typically be able to discern how individualized your LOI is by how well the key terms in the letter seem to match your specific situation.

Understand: What’s not included

Remember that an LOI is not a comprehensive list of the terms of your employment. LOIs are typically composed of the highlights of an employment agreement, such as pay, benefits and length of contract. That means terms with a more negative connotation, such as termination provisions, will be saved for the contract.

One of the important terms that may be missing from your LOI is a noncompete agreement. Noncompete clauses, or restrictive covenants, prohibit a physician from practicing within a certain geographic area after leaving a practice. For example, being restricted from practicing within a 60-mile radius for two years may be more reasonable for a neurosurgeon than a family physician.

Another value point that may not be addressed in the LOI is malpractice tail coverage. Malpractice tail coverage is an extended reporting period endorsement, offered by a physician’s current malpractice insurance carrier, allowing you to extend coverage after you leave a practice. If you have a less expensive “claims-made” policy, then either you or your employer must purchase tail coverage upon termination of employment. If you have the more comprehensive “occurrence-based” policy, then you have malpractice coverage for any claim brought against you as long as you had that insurance carrier during the alleged event.

Know: You can still negotiate

As mentioned previously, an LOI generally won’t be binding on major terms. However, some employers will still see the agreement as a promise, and therefore it can be hard to go back and change or negotiate certain provisions later. Some employers feel as though signing an LOI means making a deal, but remember that signing does not obligate you to fulfill any LOI provisions that are not legally binding. Contract negotiation is not just a mere formality after you sign the letter of intent—it is a legitimate chance for you to adjust any part of the contract that doesn’t meet your needs.

The letter of intent is an important step in moving closer to employment. After you have taken a critical look at the LOI, considered potential pitfalls and signed it, try to begin the formal contract review and negotiation process as soon as possible. The LOI plays a central role in building momentum in the hiring process, and you don’t want the process to slow down or take up any more time than necessary.

Kyle Claussen, J.D., LLM is vice president at Resolve Physician Agency, Inc.

 

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You’ve got the degree and the training. How about the license?

Here’s what you need to know to get licensed and credentialed.

By Kevin Caldwell | Legal Matters | Winter 2017

 

The basis for medical licensure in any state or jurisdiction today is that state’s Medical Practice Act (MPA). In every state, an MPA is the statutory provision for establishing a state medical board, setting standards and qualifications for licensing physicians, and establishing a mechanism for disciplining licensees who have engaged in unprofessional conduct.

In the U.S., there are 70 medical licensing boards: 36 states with a composite board (licensing both M.D. and D.O. physicians), 14 states with separate allopathic and osteopathic boards, and boards for the jurisdictions of the District of Columbia, Guam, Puerto Rico, the Virgin Islands and the Commonwealth of the Northern Mariana Islands. (A complete listing of all medical licensing boards in the U.S. and its territories, including contact information, is available on the Federation of State Medical Boards (FSMB) website.)

Most physicians’ first interaction with a state medical board will occur during residency. The majority of state medical boards (47) issue some form of limited license or training license to physicians in a residency training program within their state. In some instances, this license is issued to the institution based upon a roster of physicians who are enrolled in good standing in the program. A resident license or limited license usually restricts physicians to supervised practice within the confines of a specific institution.

Although the trend in medicine has moved increasingly toward specialization, state boards issue a license to practice medicine as a physician and surgeon. They do not issue licenses limited to the specific focus, orientation or specialty of a physician’s practice.

In general, a state medical board will issue a license based on a physician meeting requirements in three general areas:

  • Undergraduate medical education;
  • Graduate medical education; and
  • Successful completion of a national licensing exam.

State medical boards classify applicants for licensure, in part, by the location of the med school program they completed as part of their undergraduate medical education. Most MPAs draw a distinction between physicians who graduated from med school programs in the U.S. or Canada and international medical graduates (IMGs), or physicians who graduated from med schools outside the U.S. and Canada.

All state medical boards require a minimum of one year of training in a program accredited by the Accreditation Council for Graduate Medical Education (ACGME) or the American Osteopathic Association (AOA), although many require more than one year. Some boards also recognize training through programs approved outside the U.S., such as those approved by the Royal College of Physicians and Surgeons of Canada.

Fifty years ago, virtually every state developed and administered its own exam for licensure. Today there are two national exams used for initial licensure: the United States Medical Licensing Examination (USMLE) and the Comprehensive Osteopathic Medical Licensing Examination (COMLEX-USA). Both are administered as multi-step exams at various points in the prospective physician’s career. Both exams are primarily cognitive tests but have included clinical skills components since 2004. More information on these exam programs is available at usmle.org and nbome.org.

Credentialing

Credentialing is the process state medical boards use to verify an applicant’s credentials. This involves collecting and evaluating credentials earned through education, training and experience. Through direct-source verification and attestations from education and training facilities, state medical boards determine whether a physician is eligible for state licensure and prepared to practice medicine without supervision in that jurisdiction.

Credentialing for state licensure is different than credentialing for hospital privileges or managed care. State credentialing focuses more on the educational curriculum and successful matriculation from undergraduate school to medical school and medical school to residency. Credentialing for hospital privileges or managed care focuses more on a physician’s specific abilities. Hospitals and managed care plans grant privileges to perform specific treatments. State credentialing, on the other hand, is for the purpose of granting a license for the general, undifferentiated practice of medicine.

Both credentialing requirements and how credentials are obtained are unique to each licensing jurisdiction. State medical boards do not adhere to a single national standard for verifying credentials. Physicians will need to familiarize themselves with the requirements of the specific state medical board(s) where they plan to seek licensure. For example, there are currently 14 boards that require applicants to use the FSMB’s Federation Credentials Verification Services (FCVS): Kentucky, Louisiana, Maine (Medical), Nevada (Osteopathic), New Hampshire, New York, North Carolina, Ohio, Rhode Island, South Carolina, Utah (Medical), Utah (Osteopathic), Wyoming and the Virgin Islands.

The FSMB developed the FCVS in 1996 to assist state medical boards in credentialing. Currently all state medical boards, with the exception of Puerto Rico, accept the documents and collection methods of the FCVS to satisfy their particular requirements.

Preparing yourself for Licensing and Credentialing

The pathway from medical student to licensed physician in the U.S. involves many different organizations. To help guide physicians, the FSMB has created an interactive document called “Pathway to Medical Practice in the U.S.” It graphically represents the pathway to licensure and is available for download on the FSMB’s website.

Kevin Caldwell is the Federation of State Medical Board’s senior director of ancillary services, serving as a liaison between the FSMB and its 70 member medical boards. He played a pivotal role in establishing FCVS as one of the nation’s preeminent providers of physician credentialing services.

 

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Negotiating your work visa sponsorship as a physician

If you’re an IMG physician, you have an extra job-search consideration: finding an employer who will sponsor your visa. Here’s what you need to know about finding a willing sponsor.

By Ann Massey Badmus, J.D. | Legal Matters | Summer 2016

 

When searching for job opportunities, physicians have tons of considerations—location, compensation, paid time off, work schedule, quality of life and more. But most IMG physicians have an additional consideration looming over their heads: immigration. If you’re a physician with a work visa, you are well aware that your prospective employer must support or “sponsor” your work visa for you to be able to practice medicine in the U.S. As a matter of fact, without an employer’s agreement to sponsor, there’s really no need to discuss any other aspect of a potential offer.

Knowing this, many physicians ask how and when to bring up the need for sponsorship. They also want to know which sponsorship details should be discussed, negotiated and included in the employment contract. As with all things legal, there’s no one-size-fits-all approach, but here are some tips to make your search to find that willing sponsor a little smoother.

Start your search on time

For the best chance of getting your preferred location and employer, you must start the job search early enough to meet immigration deadlines. In order to do this, J-1 physicians must know the dates when their states of choice accept J-1 waiver applications. You also need to start the search a year before your residency or fellowship ends. For example, a second year internal medicine resident looking to work in Texas needs to know that J-1 waiver applications are accepted beginning September 1, 2016, for the 2017 year cycle. He or she must have an employer lined up by July 1, 2016, for a fighting chance of winning one of the 30 waiver slots in that state.

Similarly, H-1B residents or fellows should start their searches a year before graduation. Ideally, you should look for H-1B cap-exempt employers. If you’re unable to secure a cap-exempt job offer, however, starting your search a year ahead lets you apply for an H-1B cap visa on April 1 of your last training year.

Communicate your immigration status

Some employers are very familiar with work visas, but many are not. Those who have little or no experience in this area may shy away from considering visa candidates. Because you have limited time to search for a job while completing your training, it’s usually best to screen out employers who are not open to sponsorship.

Because of anti-discrimination laws, employers cannot ask you about your citizenship or immigration status before offering you a job. They’re not, however, required to sponsor a work visa once they learn you need one. To avoid wasting time interviewing for a job that won’t meet your immigration needs, include your immigration status in your CV and mention the necessity of sponsorship at the earliest opportunity. Doing so will eliminate employers whose policies do not allow sponsorship and will open the door for you to discuss sponsorship with the employers who are willing to consider it.

Have legal help on standby

Immigration is a complicated legal process that can be confusing and discouraging to employers. Because its complexity may be off-putting to many employers, it’s important to reassure them that the work visa application will not be burdensome or interrupt their operations. To ensure this is the case, you should meet with an experienced immigration attorney before or shortly after starting your search.

This attorney can evaluate your specific immigration background, explain the visa process requirements to you, and prescribe a plan to get you practicing medicine in the U.S. as quickly as possible. Most importantly, the attorney has the credentials and expertise necessary to speak with potential employers and address their questions or concerns about the legal process. Your employer will feel more comfortable knowing you’ve already lined up help to meet the legal challenges of your work visa.

Disclose and negotiate visa expenses

Like any legal process, a work visa application involves expenses, including both attorney fees and government application fees. As previously mentioned, immigration laws are not straightforward, but employers and physicians must be careful to understand and follow all requirements of a work visa and green card before and after an application is approved. The immigration attorney will help both you and the employer navigate the complexities to avoid violations, however unintended.

Employers are required by law to pay some of the attorney fees and costs involved with the work visa and green card applications. For example, at minimum, employers must pay the ACWIA (American Competitiveness and Workforce Improvement Act) fee charged by the government for the H-1B petition, and in some cases, the employer is required to pay all fees, including attorney fees, for the H-1B visa. The immigration attorney can advise you on how the fees and costs should be shared.

Also, if you want the employer to pay more than the required minimum, you should be sure the employer’s agreement to do so is stated in your employment contract. It’s important to know that you and the employer cannot agree that you will pay (or reimburse them for) any fees the employer is required to cover.

Put it in the employment contract

Without a doubt, visa sponsorship is critical to your ability to work. Yet many physician contracts don’t include the language necessary to commit the employer to sponsorship for either the work visa, green card or both. Physicians should work with their employment or health law attorney and immigration attorney to add such language if it’s not already included in the contract. Additionally, they should ensure that the contract does not contain any language requiring the physician to reimburse mandated employer immigration costs upon termination of employment.

Ann Massey Badmus, J.D., is head of the immigration section of Cowles & Thompson, P.C. Since 1993, she has helped thousands of foreign-born physicians and their employers get work visas and green cards. Learn more at immigrationMD.com.

 

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