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What To Look For In Your Medical Contract

Posted by on Oct 19, 2018 in Physician Contract Tips | 0 comments

Every medical professional eventually has one payer that is rather difficult to manage. In such a situation, you’ll often find that you can’t use the contract to help you – that is unless you were involved in negotiating it. If the relationship does fall apart, you may have trouble getting the money that you lost. This is why it’s so important to never let a payer have you sign a physician contract that you never had a say in. The professional relationship goes both ways, and you should know how to negotiate terms that both parties can agree on. Here are some things you should know:

Stay away from physician contracts with an indefinite life

A lot of contracts incorporate an evergreen clause, which basically means that the contract renews indefinitely until something happens and results in termination by one or the other party. There may even be contracts that are so hard to terminate that you are never able to, even if you want to.

An evergreen clause on its own doesn’t mean you need to throw out the entire contract. However, it does mean that you should look for a defined number of days needed for either party to effect a chance, an acceptable termination period, and an opportunity for either party to correct a breach of contract within a certain number of days.

Limit the credentialing period

A lot of new doctors have to deal with tons of denials and adjustments on credentialing issues. Sorting out such adjustments can take anywhere from a couple months to an entire year! When you limit the credentialing and enrollment process in your contract, however, you’ve got something working on your side. Make sure the physician contract states the elements required by the payer as well as the forms set to be completed. Include a deadline that requires the payer to review then accept and deny an application within. In the case that the enrollment process is slower than anticipated, make sure the payer is able to guarantee that they will pay claims between the completion of the enrollment process and the closing of the specified period.

If the payer doesn’t agree to process claims between the periods, see if it is possible for the enrollment application to be submitted before the physician’s enrollment. This will keep you safe from losing out, especially during the beginning period of the new physician’s employment.

Have a firm grasp of discounted payment rates

The payment process in the medical industry can be rather challenging to understand. There often aren’t any fixed prices. Instead, the payer often reimburses you on a certain discounted rate. It’s crucial for you to understand these discounted payment rates in order to streamline your payment process.

Discounted payment rates are also often referred to as “allowable rates” because it is the money that your practice is permitted to collect. You have to know how to steer clear of contracts that only state that the payer rates will be set at 115% of Medicare. You need more detail than that. Ask for a payment formula or even a report of the procedure codes that will be used. Make sure the payer is able to produce its rate for each. It’s also useful to request all their payment policies, especially the recognition of procedure codes and the related guidelines.

There are also quite a few states that demand that payers grant physicians’ requests for their rate schedules. Make sure the payer knows to inform you before there are any changes made to the rate schedule. If you are not informed, you should be paid the difference with interest on top.

Make lump-sum reimbursements an option for underpayments

A lot of medical clinics don’t get paid all the money that they are due. When negotiating a contract, try to include the ability to ask for lump-sum reimbursements so you don’t have to waste time resubmitting every single claim.

Define medical necessity

Oftentimes the term medical necessity is understood differently between different parties. A payer may not define it the same way as you would. To avoid any issues related to this in the future, make sure the definition of the term is made clear beforehand.

Romanowsky Law specializes in Physician Contracts in the New Jersey & New York area – get in touch today to see how we can help.

A Beginners Guide To Contract Negotiation

Posted by on Oct 12, 2018 in Physician Contract Tips | 0 comments

A Beginners Guide To Contract Negotiation

contract negotiationWhile it’s true that young physicians get paid less than an experienced one, this doesn’t mean that you should just accept any deal. When you are negotiating contract terms, remember that everything can be adjusted to fit both parties’ needs.

Everything that’s agreed upon during the interview should be in the physician contract, including other benefits and work terms. You shouldn’t hold a verbal agreement to be final. Make sure that every important element of your demands is included in the contract before you sign the contract. If a legal issue is to arise, the court typically upholds the terms of the contract, which is why you have to make extra sure that you have those details in the contract.

Now that the obvious has been stated, let’s move on to some other elements of how you should approach a contract negotiation.

Consider Utilizing An Attorney

  • If you aren’t sure about how you should approach a physician contract negotiation, you should consider consulting an attorney. They will act on your behalf to protect your interests. It might seem excessive at first, but if you consider that you will be saving yourself from tons of headaches in the future, it might be worth it. You are securing your end of the deal so that your payment, compensation and work conditions are in accordance with what is stated in your contract. You should choose an attorney who has at least three years of experience working with physician contracts and is familiar with the laws of the country or state you plan to practice in.

Identify Expectations

  • You need to know what you are expecting from a facility, and the facility should know what to expect of you. This will help you form a fair basis of work condition that is in line with what you plan to do. Make sure you are clear about how you want to approach overtime payment, work hours, expected operations and patients per day. Also, if you are expected to do extra administrative or non-medical work, it should be included in your contract, especially if it will hinder your ability to treat patients.

Some facilities will allow you to work extra jobs. If you want to work in locum tenens, then you should make sure that the facility allows it.

Compensation

  • This is the obvious one. Each practice and facility have different compensation plans that promote different work environment. Some pay you a flat salary with bonuses, some pay hourly, some is bill-based and some pays in equal-share of profits. There are many different types of payments, so you need to make sure that you understand how they are paying you. It will affect how you work, how the work environment will be and how you are expected to treat patients, so make sure the payment plan is mentioned in your contract.

Benefits

  • You should know what the facility is offering. From benefit packages, vacation time, sick leaves, parental leave, military duty, and more. Make sure that it’s up to the standard of other practices, as you might be missing out on a better opportunity or being taken advantage of if you sign with a practice that provides significantly fewer benefits.

Also, make sure that you have a malpractice insurance to protect yourself if a lawsuit is to follow your treatment. Your company should detail what the insurance is going to cover you in the case of a malpractice. Covering the cost of CME and other professional fees are additional benefits you can look to negotiate.

Contract Terms and Termination

Lastly, make sure that the contract length is clearly defined, along with the terms of the contract termination. Covered causes should also be defined. The agreed upon non-compete clauses should be mentioned in the contract and the how disputes are handled should be identified. If you are to go to court for any reason, the contract term could be what saves you from having to pay large sums of money. Once the contract is signed, be sure to review it with your employer once a year.

Romanosky Law specializes in physician contract reviews to ensure that you are getting a fair employment – get in touch today to see how we can help.

Physician Contracts – Everything You Need To Know

Posted by on Oct 5, 2018 in Physician Contract Tips | 0 comments

Employment contracts are important. They protect the employer and employee’s agreement and ensure that all of the conditions mentioned before the hiring are met by both parties. It’s definitely a big and complicated topic, especially because they’re written in legal language that requires a good understanding of the law to read and write properly.

This post will give you a primer about physician employment contracts, but don’t hesitate to contact a professional if you have any doubts regarding your contract!

Payment & Compensation

If you’re an up-and-coming young physician, it’s more than likely that you aren’t going to earn more than other physicians with similar attributes and knowledge. Expect your compensation to reflect the earnings of other comparable physicians in your geographical area.

Understanding your incentive structure

While your earnings might be lower than an established physician, it doesn’t mean that you can’t be compensated for your work in other ways. For this reason, you need to review the contract details when it comes to compensation.

The contract items that will affect your future earnings potential, as well as your quality of life, are:  the time it takes to earn partnership, work schedules, repayment language, and incentive component structure. When you’re reviewing your contract, you should be asking “When or how do I receive my incentive or bonus?” It’s important to know the industry standard, as some practices or clinics set an incredibly high bar for a bonus incentive.

It’s difficult to gauge whether the offered incentive plan is realistic. If you are offered an incentive or bonus program be sure to ask about how the plan works not only in theory but in practice. Make sure you know whether new physicians have actually received bonuses when similar bars are set so you have a rough idea of how you have to approach your work.

How do the different compensation plans work?

Different practices use different payment models, and these models affect many things in your work environment. Practice dynamics, group-member relations, and long-term earnings prospects, these are the things that depend on how the payment is set up. We have listed common compensation plans and their pros and cons for you down below.

Guaranteed salary plus bonuses or incentives:

This is a common and most straight-forward model you will find. You have a set level of income, but if you are able to meet the incentive goals, then you will receive bonuses.

The good thing about this model is that it secures your income, but it might not promote productivity. Some practices have an incredibly high bar for incentive bonuses, which means that the physicians will work very hard to earn them, or simply do the bare minimum to get by.

Equal shares:

in this model, the after-expenses revenues are split equally among the group’s physicians. This structure is also fairly straightforward and has the advantage of discouraging overutilization of services.

However, it requires that every physician is on the same level of effort. One physician might be doing more than the rest and everybody will get paid the same. Regular performance assessments must be in order for this system to be at its most effective.

Productivity-based compensation:

This model can be fairly complicated due to its many variables. Physicians are paid as either a percentage of billings or collections and the fixed and variable overhead costs of the practice are shared. They may also receive compensation based on the relative value scale units (RVSUs) assigned to different procedures for patient visits.

In this model, it is important to know the patient mix. A physician serving a patient base that consists mostly of Medicare or Medicaid patients would earn less than a physician who primarily works with commercially insured patients.

While this model rewards extra effort by physicians, it can create a competitive environment that may not be appealing to all physicians. In addition, RVSUs and overhead allocation can be difficult to administer.

While incentive chasing work environment can encourage more productivity, but it will also create a highly competitive atmosphere. Those who thrive in these situations will see their performance rise while those who don’t will see it drop.

Review your payment term

It’s of the utmost importance that you understand what your contract says. There’s an example of a young orthopedic surgeon who left training and signed a contract with a listed salary of $500,000 per year.

While that is the amount he gets, but the contract also states that he must pay up for any shortfall or lack of productivity he may have. At the end of the year, the group requested that he return $300,000 because there is a return salary clause in the contract. This wouldn’t have happened had he consulted with an attorney. He would have been briefed on what the contract says, thus saving him a headache by the end of every year.

Romano Sky Law specialises in physician contract law to ensure that your employment rights are protected, get in touch today to see how we can help.

5 Legal Mistakes Physicians Make With Their Contracts

Posted by on Sep 13, 2018 in Physician Contract Tips | 0 comments

5 Legal Mistakes Physicians Make With Their Contracts

After their residency, most doctors choose to work at an existing practice group, be it a hospital, clinic, or private practice. They will be given an employment contract which will outline the different obligations, responsibilities, and rights that they hold during their period of employment with that group. It will also mention what the employer is responsible for towards them.

It isn’t uncommon for new physicians to think that they can go over their contract by themselves. Though it is possible, it also often results in a shaky understanding of the legal document you are binding yourself to. You may need to negotiate terms or better understand what you are required to do. Let’s take a look at some legal mistakes new doctors make with their contracts.

Forgoing legal counsel

  • Doctors are incredibly intelligent people. They are no strangers to making major decisions, and often have to make them on their own. Therefore, it can be challenging for them to accept that they need help with a legally binding contract.
  • As a physician is an expert in their field, a lawyer is an expert in theirs too. They know how to navigate a contract and when it isn’t being as clear as you think it is. A lawyer wouldn’t be able to diagnose a patient as well as you could, right? In the same way, it’s better for you to leave the legal jargon to a lawyer and have them make sure you are fully aware of what you are signing up for.

It’s important for you to seek legal counsel while you are still in the process of job hunting so that when it comes time to negotiate and make a deal, you’ll already have someone to call.

Not doing their homework

  • After a physician has completed their residency, everything is moving fast – they are taking boards, looking for work, and making potentially life-changing decisions like where they want to settle and what they want to specialize in. There are a lot of things to do and often what is neglected is doing homework on your potential employer. They’re taking a close look at you – you should be doing your homework on them, too.
  • Ensure you understand the responsibilities asked of you in your new job. What will you have to do? Will you be on call? What is your salary based upon? How are patient cases assigned? Have a lot of doctors left? If so, why? Do your homework and make sure you know everything you can about the practice and about the job.

It isn’t just the stuff you can find out on their company website, either. Find out about what patients think, what past employees think, and what current employees think. Is the practice profitable and doing well?  Will it be around for awhile? Do physicians often leave? Do they operate ethically? These are all important things to consider as you are looking for a good practice that operates well, treats their employees well, and treats your patients well. You wouldn’t want to be bound to a place where you don’t agree with the policies or think you aren’t being treated fairly. To be safe, do your homework beforehand so you can be confident in your decision to work there.

Putting off legal counsel

  • You should be seeking legal counsel before you sign any legal document, be it some employment terms, a letter of intent, or anything else. Don’t let yourself be pressured into signing it without fully understanding what it means. If you are given a legal contract of any kind, be sure to ask for some time to deliberate so you can consult a legal expert. This allows you to fully understand the terms of the contract and what will be required of you. After that, you can proceed to sign the contract, reject it, or choose to negotiate, based on what you determine. After you’ve signed something, it could be too late. Look for a lawyer prior to negotiating an employment contract.

Trusting verbal promises

  • Oftentimes in the process of verbally negotiating the contract, things are said that are never put into words down on paper. Take, for instance, a circumstance in which you were told that you would only have to be on call for one weekend per month. On the contract, however, it is stated that you will be put on call rotation with the rest of the physicians. Perhaps you were told that your salary would be annually incremental, but the contract doesn’t mention anything about that. Verbal promises aren’t evidence. You will be held to the written promise that you signed. Therefore, if those things are important to you, you will have to ensure that it’s on the contract for it to be valid. Otherwise, it’s just empty words.

Neglecting to understand legal jargon

  • If you have to read a contract several times to really understand what it is saying, the language isn’t all that clear. It could be the contract being vague, or it could be that you aren’t well-versed enough in legal jargon to understand it. Even if you think you understand it, your employers could be seeing it differently. People interpret words differently. To understand it from a legal point of view, appoint a lawyer to assist you.

It isn’t uncommon for rookie doctors to run into problems regarding the contract, be it how long they are bound to it, how they can renew it, and whether or not they can terminate it. Without reading the contract carefully, you may find yourself in a position where you are bound to work at a certain place for several years without a raise, without certain benefits, or something of the sort. The contract is to protect employers, but it’s to protect you, too. You need to properly understand it and agree with it before you sign and become legally bound to it.

Conclusion

There are three basic rules that smart physicians should remember when signing their first employment contract. First off, do your research. Secondly, get some legal help with a medical contract lawyer like Romanowsky Law. Finally, ensure that you understand and can live with everything written down.

NEW JERSEY SOON TO EXPERIENCE SHORTAGE OF NURSES

Posted by on Jul 30, 2018 in Law | 0 comments

NEW JERSEY SOON TO EXPERIENCE SHORTAGE OF NURSES

By 2030, New Jersey will have the third largest nurse shortage in the country – a shortage of more than 11,000 nurses.  This according to the US Health Resources and Services Administration.

It appears that statistically, because of the recession, nurses were putting off retirement and stayed in the workforce a little longer.  Now with the uptick in the economy, nurses are beginning to retire.  The problem is not that new nurses are unavailable, but that the nursing schools are understaffed.  The shortage of appropriate skilled teachers across the country means the nursing schools are not able to take in as many students as are applying.

According to Professor Dr. Nadine Aktan, nursing schools are turning away qualified applicants in droves because of the faculty shortage.  The American Association of Colleges of Nurses says that in 2017 more than 56,000 qualified applicants were turned away from undergraduate nursing programs across the country.

How Definitions in your Physician Employment Contract Have a Changing Impact on your Career

Posted by on Mar 5, 2018 in Law | 0 comments

How Definitions in your Physician Employment Contract  Have a Changing Impact on your Career

Physicians should be aware that definitions contained within a physician employment contract may have one meaning today, but will have a very different practical effect years from now.

One of the most importation components of a physician employment agreement is the non-competition provision.  Those provisions typically provide that the physicians may not engage in competing behavior after the termination of the contract for a specified period of time within a defined geographic area.  The definition of prohibited geographic area varies from contract to contract.  In some cases, the definition will be a specified radius from the primary location of the employer’s office (ie: 10 miles from the employer’s office located at 10 Main Street, Anywhere, USA).

Other times however the prohibited geographic area might be defined as a certain specified radius from wherever the employer may conduct business.  This latter type of definition may have a profound effect.  For example, consider that at the time the physician begins employment, the employer only does business at 10 Main Street, Anywhere, USA.  However, five or ten years down the road, because of mergers or aggressive growth, the employer now does business throughout most of North, Central, or Southern New Jersey, New York, Connecticut, etc.  Then, when the employment agreement is terminated, the employer may very well successfully argue that the physician must essentially relocate to another part of the state in order to avoid being in violation of the literal terms of the employment agreement, as the geographic area in which the employer does business – has grown.

Definitions are important.  Contact Romanowsky Law today in order to avoid pitfalls which may impact your career.

Will NJ Join the Multi-State Nursing Licensing Group?

Posted by on Dec 22, 2017 in Law | 0 comments

Will NJ Join the Multi-State Nursing Licensing Group?

Recently, the New Jersey State Assembly voted unanimously to advance the latest version of a Bill that would enable the Garden State to sign on to a growing collaboration that already includes Delaware, Maryland and most of the Southeast. 

The Bill was sponsored by Democrat Herb Conoway, Jr. who presented the Bill in June of 2016.  “The current system of duplicative licensure for nurses practicing in multiple states is cumbersome and redundant for both nurses and states; and uniformity of nurse licensure requirements throughout the state promotes public safety and public health benefits,” reads the latest version of the Bill. 

Some nursing groups however have raised concerns that joining the pact could lower the standards of the State of New Jersey.  They point out that potentially less stringent requirements of other states would enable prospective nurses to find employment in New Jersey to the detriment of New Jersey residents. 

As of 2005, the group comprising the consortium who have adopted the legislation had grown to 25 states.  Multi-state licensing legislation is pending in five additional jurisdictions including New Jersey and Massachusetts.   If the State legislature elects to adopt the legislation, it will need to do so shortly as there are only a handful of voting dates available before the legislation ends in mid-January. 

Changes and Delays Plague the NJ Board of Nursing

Posted by on Dec 13, 2017 in Law | 0 comments

Changes and Delays Plague the NJ Board of Nursing

It is no secret that the New Jersey Board of Nursing has been in crisis.  Currently, there are approximately 4,000 applicants of nurses and home health care aides whose applications have been pending for many months.  This at a time when the State is in dire need of such health care talents.

In July of this year, the Board’s Executive Director, Dorothy Smith Carolina abruptly resigned citing a “staffing crisis” and lack of cash to pay for personnel necessary to make the Board work efficiently.

A majority of the Board members signed a July 25 letter directed to the Governor citing the Board’s deficiencies and need for personnel.  In the words of Senate Majority Leader Loretta Weinberg (D-Bergen), “The inability of this vital State Board to carry out its mission is effecting families and the strength of the State’s health care system.  This situation must be remedied immediately.”

In October, Governor Christie responded.  He named approximately a dozen nurses and other observers to serve on the nursing board less than a week before lawmakers were scheduled to discuss the vacancies and their effect on the citizens of New Jersey.  Missing from the appointments was the appointment of the Board’s president, Patricia Murphy who was “relieved of her duties”.

Murphy was removed from her position and testified before the State Senate, that, “The division has not filed any of the positions that are vacated by professionals with professionals.” 

Some senators are calling for a total overhaul of the Department and requesting outsiders provide an objective assessment. 

Critics of the Governor’s appointments point out that only one Board staff member has actual nursing experience.  Many of the staff members assigned to the Board also report to managers elsewhere creating inefficiencies and potential conflicts, observers allege.   

Former president Murphy advised the New Jersey State Senate that the Board needs a full-time executive director, a position that has been filled by an acting employee-whom the speakers praised for her efforts – ever since former executor director Dorothy Smith Carolina left in frustration earlier this year. 

Non-Competition (Restrive Covenant) Agreements: How Likely Are They to be Enforced?

Posted by on Oct 24, 2017 in Law | 0 comments

Non-Competition (Restrive Covenant) Agreements: How Likely Are They to be Enforced?

Elsewhere on my websites, I have discussed the legal factors which determine whether or not a non-competition agreement is enforceable.  Physicians  are served well to consider the practical question of whether or not such agreements are likely to be enforced, assuming they may be from a purely legal perspective.  A number of factors weigh in to this analysis. 

1.  The Economics.    

Consider whether it is worthwhile for the former employer to incur legal fees, time, and resources to enforce the non-competition clause.  Let us assume that you seek employment at a location which is in violation of your contract during the time when such employment is prohibited by the contract.  Does your new employment cause a financial  detriment to your previous employer?  In the absence of an economic detriment,  the chances that the former employer will seek to prevent your new employment are smaller.  On the other hand, the departure of a physician from a practice to another one in the same geographic area may mean that a substantial client base will have reason to follow the departing physician.  This type of financial harm may lead your employer to enforce the contract, for the financial benefit of the practice.

2.  The Terms.

Does your non-completion agreement provide that if you are in violation of the non-competition clause that the prior employer would be entitled to attorneys’ fees and costs of suit?  If the answer is yes, then the former employer has more incentive to bring an action knowing that they are likely to prevail in their attempt to recover attorneys’ fees and costs of suit.  Without the language, a practical attorney will advise a prior employer that the fees and costs incurred will not be recoverable.  Similarly, some non-competition agreements have a liquidated damages clause which provides that the departing doctor agrees to pay liquidated damages (a fixed sum) equal to a specified amount for each day that the doctor is found in violation of the non-competition clause. The  terms of your contract may tip the scales in favor of, or against, litigation.

3.  Other Factors.

Other, more personal factors may weigh in the employer’s decision.  For example, is the departing physician leaving on “good terms”?  If so, one way to avoid a potential suit to enforce the non-competition clause is to simply request the current employer waive the clause, and allow the departing physician to accept the offer which has been made to him or her.  The request, and the response of the current employer, should be made in writing in order to protect the departing physician. 

4.  Conclusion

The economics, the terms of your contract, and other factors weigh into a determination of whether or not the existing practice will elect to bring an action against a departing physician to enforce a non-competition clause.  Just because the clause is enforceable, doesn’t always mean that the prior employer is likely to bring suit.  Of course, no attorney can predict whether an existing employer will bring an action, but the physician who is contemplating departure or the enforceability of a restrictive covenant should bear these factors in mind.

Contact Romanowsky Law now to have your restrictive covenant reviewed. 

Will A Prospective Employer Change its Standard Physician Employment Contract for YOU?!

Posted by on Oct 9, 2017 in Law | 0 comments

Will A Prospective Employer Change its Standard Physician Employment Contract for YOU?!

I am often asked by clients whether or not and offer made to them by a prospective employer is likely to make changes to the contract presented.

 

I sometimes respond with a question:  “Are you the Derek Jeter of your practice?!”

 

Put in another way, whether a prospective employer is willing to change its contract depends upon the amount of leverage you have.  Some clients are in a positon to bring an incredible reputation to the practice.  The practice wants to be affiliated with you and your reputation.  Sometimes, a physician may bring a book of business which the practice desperately needs.  Sometimes, there are personal relationships at stake which might compel the prospective purchaser to make the changes sought by my client.  And of course, sometimes a mix of all three variables are at play.

 

To continue the analogy, if you enjoy a stellar reputation and your skills are in demand, then you may very well be the Derek Jeter of your practice.  If that is the case, it is more likely then not that the prospective employer will modify its contract because you have leverage with which to bargain.  The same holds true if you have a substantial book of business to bring.  

 

On the other hand, if you are just finishing your residency, and you have neither a stellar reputation (yet!) or a substantial book of business, the practice may not be willing to make the changes you seek.  

 

Consider too, the challenges of the employer.  If it is a small practice, there might be need to treat all doctors in the same way, including some parity with regard to compensation.  Otherwise, if one or more of the other physicians learn of the accommodations which were made to you, the practice morale may suffer.  Furthermore, benefits which you might request which are unique to you but not to the others can cause the same problems.  Making accommodations for you might mean that the same accommodations must be made for the other employees.  This could cause the practice to incur additional costs.

 

Sometimes there are more fundamental practical considerations at stake as well.  Perhaps the practice is not inclined to incur legal fees for the purpose of negotiating the contract for you.  It is easier for the human resources person who provided you the contract to simply say “no, this is our standard form” than to seek management approval and counsel’s advice.  That same person may wish to avoid being criticized by management for having deviated from the standard form.

 

Contact Romanowsky Law today to discuss how we can assist you in negotiating a contract which may have a profound affect on your career.