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October 8, 2008

Physician Employment Agreements. Stacey A. Borowicz, Esq. Dinsmore & Shohl LLP 191 W. Nationwide Blvd. Suite 300 Columbus, Ohio 43215 (614) 227-4212 sborowicz@dinslaw.com. October 8, 2008. Gross Anatomy of an Employment Agreement. Term and renewals Work duties and call schedule

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October 8, 2008

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  1. Physician Employment Agreements Stacey A. Borowicz, Esq. Dinsmore & Shohl LLP 191 W. Nationwide Blvd. Suite 300 Columbus, Ohio 43215 (614) 227-4212 sborowicz@dinslaw.com October 8, 2008

  2. Gross Anatomy of an Employment Agreement • Term and renewals • Work duties and call schedule • Compensation- fixed salary vs. productivity • Benefits • Future opportunities

  3. Contract Review • Seek legal review • Attorney with healthcare experience • How long will the review take • Will you or the attorney negotiate terms • Expected legal fees

  4. Term • Fixed Term • Note contingencies • Licensure • Board certification • Hospital & payer credentials • Option to renew or automatic renewal • Notice for termination or non-renewal

  5. Work Duties • When do I work? • Where do I work? • What am I responsible for? • Who helps me? • What can I do when I am not at the office? • Can I get paid for it?

  6. Compensation • Annual salary- fixed each year • Productivity only – “eat what you kill” • Combination of salary and production

  7. Productivity • Regular pay = draw • Billings vs collections • Expenses • Variable = by production • Direct = individual • Fixed = equal • Reconciliation

  8. Other Compensation • Bonus • Signing Bonus • Annual Bonus • Discretionary • Based on production • Receipts > threshold amount • Percentage share of practice profits • Start-up costs • Reimburse moving expenses • Reimburse portion of student loans

  9. Benefits • Insurance • Health insurance (single vs family) • Life, disability, accident insurance • Retirement plans • Eligibility • 401(k), profit sharing, pension plans • Employer contribution or match • Vesting

  10. Benefits • Disability Leave and Insurance • How long can you be off? • What will you get paid? • Maternity leave • Time off (vacation and sick time) • Scheduling, notice, priority of requests, carryover • CME • Paid time off • Reimbursement of expenses

  11. Benefits • Reimbursed Expenses • Medical license fees • Board exam fees • Medical associations • Medical staff fees • Office and computer equipment • Books and Journals • Cell Phone & Pager • Parking • Mileage or auto allowance

  12. Malpractice Insurance • Occurrence Policy • Claims made Policy • Tail Coverage • Who pays • Based on termination • Nose Coverage • An issue if you don’t have tail paid

  13. Termination • Without cause • By who • Notice required (affects term) • With cause • Specified circumstance • Good cause (reasonable standard) • Notice

  14. Limitations & Covenants • Medical Records • Record belongs to practice, information belongs to patient • Right to use post termination • Non-Solicitation • Patients • Employees

  15. Limitations & Covenants • Non-compete provisions • Presume will be enforced • In Ohio, covenant must be reasonable • Geographic restriction • Temporal restriction • Damages

  16. Recruitment Agreements • Separate contract and loan from hospital • Guarantees salary and covers incremental practice expenses • Physician personally responsible to repay loan at end of guarantee period • Additional years of service = forgiveness of loan

  17. Negotiating Strategy • READ your contract! • Seek your own attorney review • Ask questions • Negotiate for what you want • Request all changes and terms in writing • No signature until contract is in final form

  18. Next Phase - Shareholder, Member or Partner status • When does it happen? • Set time or individual performance • Example: 2 yrs or $300K AR • How much does it cost? • Valuation: book value, fair market value, set value • Hard assets vs soft assets • Hard buy-in vs soft buy-in • What does it mean? • Share of profits and liabilities • Income continuation • Buy-out

  19. Stacey A. Borowicz, Esq.Dinsmore & Shohl LLP191 W. Nationwide Blvd.Suite 300Columbus, Ohio 43215(614) 227-4212sborowicz@dinslaw.com

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