Physician Contract Review: Full Documentation
Don’t sign a physician contract without full documentation of the offer
Being offered a physician contract is one piece of the puzzle when joining a new practice. Signing without all of the components of an offer can lead to financially painful surprises down the road.
For example, a physician joins a practice and signs a three year agreement with the belief that he would make partner at the completion of three years. What he didn’t find out is that at the three year anniversary of his physician contract, it is at the discretion of the shareholders as to whether or not he is qualified and has earned partnership. If the owners decide that the time is not right, the physician may have to wait until the next annual shareholder meeting before he has another opportunity for partnership.
This doctor should have requested certain documents along with the physician contract since from the start he had expressed his interest in a long-term working relationship and ultimately partnership.
Here is a list of some items that may need to be requested in conjunction with an physician contract from a prospective employer:
|For Employees and Partners||Additional Items for Partners|
|Employment Agreement||Articles of Incorporation|
|All Reference Exhibits and Attachments||Corporate By-laws|
|Employee Handbook and Manual||Buy-sell Agreements|
|Financial Billing and Collection Reports||Business Valuation|
|Employment Benefits Package||Leases|
|Group Insurance Policies||Management Contracts|
|Hospital/Group Business Agreements|
If the potential employer is slow or reluctant to provide you copies of these documents, proceed with caution. Find out the reason for the delay and make sure it is legitimate. If you decide to join the practice without all of the documentation, you need to plan ahead for potential surprises and associated risks. Conditionally signing on with a group subject to your review of certain documents may provide you more time and protection. This allows you to move forward without being bound to the employer.