CONTRACT NEGOTIATIONS

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CONTRACT NEGOTIATIONS

• CHAD CARLSON MD
• MARK STOVAK MD

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Duties/Responsibilities

• Your responsibilities should be clearly stated in
  the contract
• If something that might fall under your job
  responsibilities is not listed in the contract,
  make sure that there is a separate clause that
  stipulates how the reimbursement will be
  determined for that work

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Duties/Responsibilities

• Examples to consider
• Inpatient work
• Call rotation
• Administrative duties
• Community outreach
• Talks
• Sports physicals
• Other PR work

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Duties/Responsibilities

• Examples to consider
• Training room coverage
• Professional output
• Published papers
• Presentations at national meetings
• Student/resident education

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Duties/Responsibilities

• Patient care responsibilities
• Indigent care
• Surgical post-op checks
• Structure of the workweek
• Saturday clinics

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Duties/Responsibilities

• Restrictions
• Moonlighting
• Is this covered by your malpractice?
• Other medically-related business ventures
• Do you have to pass-back a percentage of
  outside earned income?

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TERMINATION

• At Will State (no reason needed)
• How much notice to quit/be terminated
• What constitutes breach for each side
• Can cause of termination be cured
• What happens to benefits if fired without cause
• What about your restriction covenant
• What happens if disability

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Noncompete Clauses

• Flexibility depends on the local job market
• At a minimum, try to negotiate away the
  noncompete for any at-will termination

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Noncompete Clauses

• Points to consider
• How important is it to you to stay in this area?
• What is your state law with regards to
  restriction covenants?

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TERMS OF CONTRACT

• Stick with 1 year renew each year with salary
  raises
• 2 year guaranteed contracts may be ok if there is
  a bonus clause in it once overhead salary is
  covered

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COMPENSATION

• Pay (Know the market)
• AMSSM Economics Committee survey
• MGMA
• What formula is used to calculate
  pay/bonus/overhead
• Equal pay among group
• Straight Production (eat what you kill)
• Combo

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COMPENSATION

• Distributions of managed care capitated income
• More pay for academic advancement, committees,
  leadership
• Charges
• How much
• Who determines
• Payer mix
• Collections
• Who owns them
• Who collects them (office manager, group,
  physician, lawyer)

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COMPENSATION

• Guarantee
• Moving expenses/pay advance until start practice
• How long
• Pay back
• Overhead
• Float/payback
• Bonuses
• Sign-on
• How often
• How much
• Eat what you kill
• Less than partners

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BENEFITS

• Retirement (401k/403B)
• Employer match
• Pension
• Vesting periods
• Important if you are employed at-will
• Flexible spending (Day Care/ Health Care)
• Student Loan Reimbursement
• Marketing -- How will your practice be promoted?

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BENEFITS

• Paid Vacation (sick leave)
• Boards (time off pay)
• CME (pay)
• Pager/phone
• Dues/subscriptions
• Maternity/paternity leave (pay)
• Bereavement leave
• Military leave
• Jury duty
• FMLA
• Who covers practice/call when away?

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BENEFITS - Insurance

• Malpractice (type/limits)
• Deductible (who pays)
• Tail coverage for claims-made policies (who pays
  if you leave)
• Long/short term disability (own
  occupation/waiting period)
• Office Liability
• Life
• Health/dental
• Disability/Overhead Expense
• Umbrella

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PARTNERSHIP

• Buy in
• Automatic after a probation period
• Benefit
• Pay raise
• More say
• Downside
• Debt (building, diagnostics, PT, surgery)

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RETIREMENT/DEATH

• What happens to partnership share
• Buyout
• Who gets Accounts Receivable (AR)
• Benefits for me/family last how long

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PEARLS

• Know your alternatives
• Know your strengths
• Support your positions with real numbers whenever
  possible
• Learn each partys needs
• Do not play hardball
• Best contract is the one that meets both parties
  needs

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PEARLS

• Use a contract attorney to review the contract
  prior to signing
• Only you can decide what is worth negotiating
  over
• The more competitive the job, the less bargaining
  power you have
• Understand who your boss is

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BIBLIOGRAPHY

• From Residency To Reality Practice Management
  Teaching Tools - Negotiating The Details, AAFP, 1
  (4), 1997.
• Location, location, location The geographic
  facts about noncompete clauses, AMedNews, Jan 30,
  2006.