What to look for in Physician Employment Contracts or Professional Liability Insurance Requirements - Are they fair?
Professional Liability Insurance requirements are less understood by most physicians let alone legal professionals. There is a science and an art to risk management. Insurance requirements are a risk management tool, and to navigate them properly it takes knowledge, time and experience. Here are a few thing to think about:
- Who pays for the insurance? - There are contracts that require the employer to carry the insurance and there are contracts that require the contractor to carry the insurance.
- What is the Amount of Insurance Coverage Needed - Do you have to get the minimum statutory minimum required amount or a higher threshold? Depending on the area of practice this amount will vary.
- Occurrence versus Claims Made Insurance - Many employers carry Claims Made insurance, and expect the employees to carry the "tail coverage" should they leave the practice. Understanding when tail coverage is and what the cost of it is important to know up front. See below is a diagram explaining occurrence versus Claims-Made insurance coverage:
There are many other considerations that are often not at the top of mind for administrators nor physicians, but they are top of mind to legal counsels like those in our firm. The other things to consider are:
- Who has the obligation to keep the records? Will the person have access if they need it to respond to an audit or a complaint?
- Who is responsible for billing? Most fraud & abuse issues arise from aggressive billing, so who bears the responsibility?
- In the event of a sale of the business will the non-compete restrictive covenants carry over to the new organizations? Good question.
- You Should also look for termination clauses, employment duties, directorship contracted duties, ownership interests,
- What are the anti-tolling (not tolling of time) provisions in the contract?
- Who is waiving and releasing who's rights to liability issues, and who is indemnifying whom for issues that arise?
- What happens if a dispute arises?
If you have questions or issues you need to run by an attorney, please reach out to your select healthcare hospital attorney who has experience in handling this sort of stuff; if you don't then feel free to call us for we have the experience on how to guide you through this process. We provide physician contract reviews for a flat fee of $950 (this includes all strategy discussions, all emails, all phone consults, and proposing document changes, but it does not include negotiating with the opposing side). The ability to call and text and discuss things with legal counsel is a must, before signing any contract. Without a grounded and level conversation no strategy is complete. We do this for all healthcare professions, including Dentists, Chiropractors, Physician Assistants, Nurse Practitioners
Call us if you have any questions.