Health Law Pointers

Volume XIV, No. 2
Wednesday, August 1, 2012

Brought to you by Hurwitz & Fine, P.C.
Editor: Lawrence M. Ross
[email protected]

As a public service, we are pleased to present this issue of our periodic health law newsletter addressing the specific legal concerns of health practitioners. The primary purpose of this newsletter is to provide timely educational information and commentary for our clients and subscribers. If you know of others who may wish to subscribe to this free publication, please feel free to forward it. If you wish to subscribe or unsubscribe, please send an e-mail or call the Editor, Lawrence M. Ross, at (716) 849-8900.

What Makes A Medical Practice
Attractive To Physicians?

In our experience, there are several key factors that contribute to a successful physician recruitment. Not surprisingly, the geographic location and community in which the practice operates, the type of medical practice involved, compensation, practice stability and opportunities for professional growth have a strong impact on the decision. A “Top 10” list of these factors is set forth below:

1. Geographic Location and Community.

A candidate’s personal preference dominates his or her search. A person interested in water sports is unlikely to investigate a medical practice located inland, on the plains or in the mountains. Similarly, someone looking for an exciting, fast-paced urban lifestyle will not pursue a practice opportunity in a remote rural setting. Although this seems obvious, a principal cause for an unsuccessful recruitment in many instances is mismatched expectations.

2. Practice Type.

Many recruits have a clear picture of their ideal medical practice’s size and nature. Some prefer solo or small practices, while others may demand an “avant garde” practice that offers “cutting edge” technology and complex cases. It is important to clarify at an early stage whether your practice can be a suitable match.

3. Compatibility with Colleagues.

In many surveys, this factor is ranked first by candidates seeking positions out of residency. Many recruits prefer the comfort of a less frenetic, more congenial workplace where the physicians are not only colleagues but friends.

4. A Fair Compensation Package.

Given the highly competitive market existing today for physician services, and recruitment difficulties experienced locally, unless the compensation package, including fringe benefits, is fair and competitive for the specialty involved, your candidate will be uninterested in the offer. However, avoid offering a compensation package that is economically unsuitable for your practice.

5. A Reasonable Workload.

Having just completed a rigorous post-graduate residency training program, a reasonable workload, both within and outside the office, may be an important factor in the candidate’s decision-making process.

6. Opportunities for Professional and Personal Growth.

Many recruits will be intensely interested in the opportunity for equity ownership and whether partnership, once achieved, means an “equal voice and vote” in the operation of the medical practice.

7. Practice Stability and Health.

Having a stable management and workforce, with little turnover, are among the critical indicia in determining if a practice is well-run. The existence of a succession plan, too, is of importance to younger physicians. Your practice should be prepared to answer questions regarding past, current and prospective operations of the medical practice.

8. Integration of Technology.

Younger physicians are keen to see if the medical practice has adopted or integrated modern office and clinical technology, including electronic medical records. A practice comfortable with 20th century technology may not be attractive to a 21st century physician.

9. Practice Size.

Today’s recruits are not just looking for a job, but a specific type of practice, and the size of the practice can be an important factor in their deliberation. Unexpected changes in the practice environment may impact on a practice’s ability to recruit and/or retain a new physician.

10. Opportunities for Loved Ones.

Unless the spouse of the recruit finds suitable employment or a comfortable role in the community, your ability to retain the recruited physician will be undermined. This issue should be addressed “up front” in order to assure a smooth transition.




The Interview Or Site Visit
A savvy medical practice takes full advantage of any interview or site visit to gain a better understanding of the candidate as a person and professional. A detailed itinerary should be developed and include a community visit as well as a tour of the office(s). Typical interview goals should include:

1. Assessing Compatibility.

Will your practice offer the candidate a comfortable environment? Is your practice a suitable match?

2. Determining Personality and Lifestyle Preferences.

Will the candidate get along well with your professionals, office staff and patients? Is your practice philosophy shared by the candidate?

3. Evaluation of Clinical Skills.

Consider the use of hypotheticals or case descriptions that would allow you to evaluate technical and clinical skills in a closed setting that are of concern to your practice. You may also wish to perform patient consultations with the candidate during his or her visit in order to obtain first hand observations of his or her skills, subject of course to patient consent.

4. Identification of Professional Goals.

Will your practice advance the candidate’s professional goals? Where does the candidate see himself or herself in 5 years?

Selected Contract Issues
A written physician employment agreement will establish many of the working principles affecting the professional and business relationship between your practice and the recruit. Eight selected contract issues are noted below:

1. Why a Written Agreement?

A written agreement reduces to writing the parties’ duties and obligations, and manages their expectations. The negotiations leading to the signed agreement encourage discussion of the important issues. A writing offers protections to the parties on these issues, and avoids potential misunderstandings.

2. Compensation.

Employers have several options in preparing a compensation arrangement. The compensation package may include one or more of the following elements: (i) fixed annual salary, (ii) a productivity-based payment, (iii) practice incentives or bonuses and (iv) a signing bonus.

3. Employer Provided Fringe Benefits.

The potential list of benefits may include: (i) health and/or dental insurance for individuals or families, (ii) a qualified retirement plan, with or without an employer contribution, (iii) group term disability insurance, (iv) group term life insurance, (v) paid time off (vacation, CME, sick leave and holidays), (vi) CME allowance, (vii) relocation assistance, (viii) malpractice insurance and (ix) reimbursement of professional dues and licenses.

4. Hospital Recruitment Assistance.

In underserved areas in need of physician specialists, hospital-provided incentives make recruitment easier for the practice by guaranteeing an annual salary in the early years, offering relocation and marketing assistance, student loan repayment and/or a signing bonus. These arrangements must comply with the Stark law rules on physician recruitment, and typically mandate that the recruit commit to remaining in the hospital service area for an agreed upon period of time.

5. Lifestyle Issues.

Concerns that impact on lifestyle include evening or weekend hours of operations, call coverage and hospital time.

6. Post-termination Restrictions on the Ability to Work (Restrictive Covenants).

Many practices are protective of their business, and include geographic and temporal restrictions on the ability of a recruit to work within a restricted area for some period of time after any termination or non-renewal of employment. This provision is often coupled with language limiting the ability of the employed physician to interfere with patients, workforce and referral sources and may also impose a confidentiality provision.

7. Contract Term.

The written contract typically has a fixed term of employment. A probationary or trial period is sometimes used, and it is increasingly common to include periodic evaluations in the contract language.

8. Partnership.

The timing for consideration of partnership should be discussed and an agreed upon period of employment completed before the issue is deliberated. Sometimes language describing the criteria for evaluation is included in the contract. A more comprehensive contract provision will also set forth the important terms or preconditions for admission.
Medical practices which successfully recruit physicians are not just “lucky”, but have paid careful consideration to the recruitment process. In addition, the practices have engaged legal counsel in defining the various legal and business issues inherent in the process.

Preventing Pitfalls In The
Physician-Patient Relationship

Physicians are uniquely challenged to uphold their duties to patients while wrestling with often competing expectations and the increasingly complex demands of operating a health care practice. For these reasons, the relationship can be wrought with perils. It is in every physician’s best interest to understand what conduct gives rise to the physician-patient relationship and its accompanying duties as well as what is required in order to break that tie without exposing oneself to liability.  

1. When is the Relationship Created?

Generally, the relationship of physician and patient is created when the physician renders, and the patient accepts, professional services for the purposes of medical or surgical treatment. The primary inquiry is whether there was a reasonable reliance on the part of the patient, and the duties and rights created by the relationship generally do not arise until the physician actually undertakes to diagnose and treat the patient. A telephone call could create a physician-patient relationship with regard to a prospective patient if it was foreseeable that (1) the prospective patient would rely on the advice and (2) the prospective patient did in fact rely on the advice given by the physician.

2. What Duties Arise for Physicians and Patients?

The physician’s duty to the patient includes the duty to provide medical care that falls within the standard of care, to obtain consent to treatment, to maintain confidentiality, and to provide continuity of care. The patient’s duty to the physician includes the duty to provide complete medical history, to follow agreed-upon treatment plans, to keep appointments, and to meet financial obligations.  

3. What are Proper Grounds for Terminating the Relationship?

A physician may unilaterally terminate a patient for various reasons, including: the patient’s refusal or inability to pay for reasonable medical bills/services rendered; the patient’s persistent failure to keep scheduled appointments or adhere to agreed-upon treatment plans; the patient’s ongoing disruptive or unreasonable behavior; the patient’s criminal behavior; and the patient falsifying or providing misleading medical history. However, a physician may not terminate the relationship where the patient is in extremis or requiring emergency medical care, solely because of the patient’s membership in a protected class, or for unpaid medical bills if the physician is aware that the patient has declared bankruptcy.

4. What is Abandonment?

A physician who wishes to unilaterally terminate the relationship must take precaution so as to not give rise to a claim for abandonment—a breach of a physician’s duty of continuing treatment. If a physician, without justification, terminates the professional relationship with a patient at an unreasonable time or without giving the patient adequate time to find a qualified replacement, the physician has abandoned the patient and may be liable for any damages resulting from this breach of duty as well as for professional misconduct under the New York State Education Law. To establish abandonment, the patient must prove that the physician ended the relationship at a critical stage of the patient’s treatment without good reason or sufficient notice to allow the patient to find another physician and that the patient was injured as a result.

5. How Does a Physician Avoid an Abandonment Claim?

In order to avoid an abandonment claim, the physician should document the patient’s record regarding the conduct or action leading to the termination. Prior to commencing termination procedures, the physician should discuss the problematic behavior with the patient to see if there is a reasonable resolution other than termination. Such efforts should be well-documented in the patient’s file. If the patient is being terminated for an unpaid balance, the physician should attempt to work out payment arrangements with the patient prior to termination. If the patient refuses or the attempts fail, then termination procedures may be initiated.

6. What Steps Should be Taken to Properly Terminate the Relationship?

To properly institute termination of the relationship, the physician should provide the patient with written notice of the physician’s intent to withdraw. The letter must indicate that the patient has 30 days (or more, if appropriate) to obtain a new physician and to notify the physician where the patient wants a copy of his or her records sent. If written authorization is required to release records to the new physician, the authorization form should be included with the letter. The letter should also clarify that the physician will only provide emergency services to the patient until the termination date. The envelope should state “Personal & Confidential” on the front and should be sent via certified mail, return receipt requested. If the letter is returned unopened, the physician should file the unopened envelope in the patient’s record and send another letter via regular mail. A copy of the letter of termination and any proof of mailing should be kept in the patient’s record.
Ultimately, physicians need to be sensitive to a patient’s rights and their obligations when considering terminating a patient in order to avoid liability exposure. If faced with a difficult patient, termination decision, or a claim of abandonment, a physician should consider consulting with an attorney who specializes in health law for guidance.