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Physician Employment Agreements: ' S EVERAL FACTORS — including decreasing reimbursement, health care reform, and the advent of accountable care organizations ("ACOs") — have led to increased con- solidation in the healthcare industry. While there have certainly been more creative integration models in this wave of consolidation, many physicians are faced again with the traditional employment relationship and the requisite negotiating that comes with it. This article points out some of the key issues you may encounter if you find yourself in a position of nego- tiating a new employment relationship. Term. The most important item to keep in mind when negotiating the term of the agreement is that the actual term boils down to the parties' ability to terminate the agreement without cause. In other words, a 10 year term with a 30 day without cause termination provision is in actuality a 30 day contract ... plain and simple. Additionally, many contracts are set up to automatically renew. While this is a convenient provision, you should ensure that you have the ability to renego- tiate the salary as the contract continues to automatically renew. Make sure there is a mandatory annual review and discussion regarding compensation for the upcoming year. This is especially important when the compensation model does not set forth a mechanism for adjustments. Compensation. Compensation models have undergone a severe makeover since the last wave of consolidations. You should be aware that part, and sometimes a significant part, of your pay may be based on non-traditional measurements such as patient satisfaction and quality indicators. With the current trend towards bundled payments and ACOs, efficency is creeping into a world where all that used to matter was WRVUs. Non-Competition Clauses. Pay par- ticular attention to non-competition provisions as they can and will be enforced against you. Many hospitals are willing to limit their non-compete clauses to JULY-AUGUST 2012 ■ MDNEWS.COM ■ MD NEWS Cleveland-Akron-Canton | 33 only prohibit your taking a job from a competing healthcare system. Being able to negotiate this type of clause leaves you with the maximum flexibility in the event that you determine the employed physician model is just not for you ... and let's face it, it is not for everyone. Job Descriptions. One item that is often glossed over in negotiations is the job description attached to the contract. This exhibit contains all of the specifics about what you are promising to do. Take some time to thoroughly review this description and be sure you have a very clear understanding of what is required of you, when it is required, and how you are required to perform it. Doing so may prevent serious misunderstandings after the signatures dry. Call Coverage Obligations. Many physicians view limiting call responsibility as a key benefit to joining hospital employ- ment. Therefore, make sure that you read the call coverage provision carefully so that there are no misgivings regarding the size of the group, what happens when a physician leaves, weekend shifts you are responsible for, etc. The more specific this provision, the better. Tail Coverage. With most coverage An Ounce of Prevention Is Worth a Pound of Cure' By Dan Glessner being of the "cla ims - m a d e " v a r i e t y, the issue of who is responsible to purchase tail insurance at the end of the employment relationship can be a several thousand dollar deci- sion. Seek equity when negotiating this provision. If the agreement is terminated because of an employer breach or by the employer without cause then this should not be an expense that you are willing to bear. The above are some key issues to keep in mind, and there are many other issues that may exist when reviewing a new employment contract. The key is that these agreements should be drafted in a fair and understandable manner in order to avoid unnecessary court battles and significant expenses in the future. Review your agreement carefully and beware of provisions you do not fully understand. As the saying goes, "An ounce of prevention is worth a pound of cure." Dan Glessner is a partner at Brouse McDowell and the chair of the Health Care Practice Group. ■