Successful negotiation of physician employment agreements requires a careful balance of the objectives of the prospective employer with those of the prospective employee while ensuring that the negotiated agreement complies with the federal and state laws that apply to agreements of this type. The prospective employer wants to make certain it has enough professionals to handle the needs of its patients, and the prospective employee wants to be paid adequately and fairly for services provided while preserving a work-personal life balance. If the agreement “blows up,” the prospective employer wants protection against the physician “stealing” its patients, and the prospective employee wants to practice medicine without relocating.
Impact of Federal and State Laws That Apply to Physician Employment Agreements
Written physician employment agreements should comply with the regulatory safe harbors for agreements of this type under federal and state anti-kickback statutes (“AKS”) and the exceptions to the laws that restrict referrals by physicians to entities in which the physician has a financial interest for certain types of ancillary services under applicable state and federal laws, such as the Stark Law. In addition, federal and state laws require preservation of the privacy of patient records (such as HIPAA and corresponding state laws). Finally, state laws may affect the enforceability of covenants not to compete. In the future, the Federal Trade Commission may prohibit...
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