New Doctors

No one speaks directly to physicians who are new in practice, and we think there are basic things you must know before you step into the world as a practicing physician.

First, not to be cynical, but many people in business see physicians as income opportunities. When you go into practice, you will be inundated with offers and opportunities, all of which need to be carefully scrutinized. The key, for purposes of this brief guide is for you to armed with knowledge.

The three primary areas of knowledge you must have are (1) liability for fraud and abuse, (2) what to look out for in an employment opportunity, and (3) where to seek legal advice.

Fraud and Abuse

Fraud and abuse laws encompass several key state and federal laws, such as the Anti Kickback Statute, the Stark Law and the Florida Patient Self Referral Law of 1992. The core concept to keep in mind is that it is illegal for you to pay or be paid anything (not just money—even gifts) in exchange for referring patients. For instance, a home health company or medical device supplier may approach you and say "Hey, if you send patients to us or use our products, we'll make you a medical director or consultant and pay you money each month." Bad move. Such arrangements can be entered into if there is a legitimate purpose and the arrangement is documented to comply with key laws. Generally speaking, if compensation and referrals are spoken about in the same sentence, you are on shaky ground and need to get advice immediately!

One of the other key aspects of the fraud and abuse laws is that nearly every business arrangement you may enter into (e.g. leases, employment, etc.) must be encompassed in a written agreement and the contents of the agreement are governed by federal and sometimes state law! You can lease a car on any term imaginable, but if you enter into a lease on a percentage basis, you may be breaking the fraud and abuse laws.

Employment Agreements

As a new physician, you very likely will be offered employment. First rule: if it isn't in writing, it isn't binding on the parties. Everything that is important to you must be contained in a written agreement. And what sorts of things should you look for?

Details about your work. Where will you be working? Can the employer move you around too much? What about call? How much call are you required to cover? What are your office hours? Do you require any special personnel or equipment to do your job? The contract must be specific as possible about what your duties and responsibilities are.

The length of the contract. Most contracts are for an initial period of 12 months. That said, they can often be terminated by either party with 30-90 days written notice.

Noncompetes. In some states, like Florida, noncompeition provisions are common. And you should assume they are enforceable! The key things to look for are how long it lasts (usually up to 2 years following termination), how big the geographic radius is, and what services you are prohibited from performing. Some negotiating points include:

• Seeing if they will agree to a short "honeymoon" period, where the noncompete does not apply;
• Seeing if they will reduce the durational or geographic scope;
• Ensuring it only applies to what you do and to competitors like your employer, not a broad prohibition of practicing medicine in any way for anyone;
• Seeing if the employer will create exceptions (1) if you are terminated without cause, (2) if you terminate for cause, and (3) if they do not renew the contract.
• Finally, remember that if you are joining a practice via a hospital assisted recruitment agreement, the contract may not contain a noncompete. The thing to keep in mind about noncompetes is that, even if you think you ought to be entitled to break one, and you win, it will cost you lots of money and take a lot longer to resolve than you may think. Take them seriously!

Compensation. The contract needs to be clear about what you are paid. Normally you will receive a flat annual salary and productivity compensation. Rather than being generally referred to in the contract, the productivity compensation ought to be specifically described. As far as bonuses go, there are hundreds of formulas, but generally, you can expect to receive something once the practice has received about twice as much as your base compensation.

Partnership. Ideally, the contract should say when you get to be a partner and how much you have to pay to be one (or what the formula is). It is common, however, for new employees not to be provided much in the way of details.

Here are some secrets you need to know about contracting:

1. Don't be afraid to ask for what you want. The employer is a business person. New doctors are sometimes afraid to ask for what they want because they are afraid the employer will back out. Don't be afraid to ask. Just ask respectfully.
2. It takes a while to generate revenue. It can take months to get on managed care panels and care for those patients. It can take a while to get added to the group's Medicare group provider number. Get these things started early on. And remember that if you are counting on income for bonus purposes, etc., the first three months show generally very low income.