Danger zones: Easily missed aspects of contracts

Urologists can easily miss or disregard these important aspects of contracts, which could come back to haunt them.

• “Under both the Stark law and the Anti-Kickback Statute, it is absolutely imperative that urologists be either shareholders or employees of the practice,” said health care attorney Christopher L. Nuland, JD. “Many physicians have an independent streak and want to be independent contractors, but being an independent contractor limits the ways in which you can be reimbursed and limits some of the things that you can actually do in a urology office.”

• “In any contract, the physician needs to understand who the parties are. It may sound simple. But are you contracting on your own behalf or on behalf of the entire practice?” Nuland said. “This is especially true in managed care contracts. When it comes to managed care contracts, can somebody cover for you? Are you contracting with the managed care company’s PPO? Or are you contracting with their HMO, EPO [exclusive provider organization], and every one of their products?”

• “In any contract, be very careful to look at the amendment section. You never want to sign a contract that gives the other party the ability to amend the contract unilaterally,” Nuland said. “Again, this is very important in managed care contracts, but it’s also very important in employment contracts.”

• “Beware of any restrictive covenants. They have to be reasonable as to scope and time,” Nuland said. “The general rule is 2 years and 20 miles will always be upheld. But if you’re working in a hospital, you should endeavor to negotiate a contract that restricts your ability to work for another hospital, not one that would restrict you from entering private practice.”

• Urologists should beware of physician recruitment agreements with hospitals, which offer income guarantees, according to urologist Thomas Stringer, MD, associate professor and associate chairman of urology at University of Florida, Gainesville.“I tell urologists to be really careful of that because that is essentially a loan, based on performance and completion of the contract,” Dr. Stringer said. “If you don’t complete the contract, you may owe your entire salary back to the hospital. When it says income guarantee, it’s a little different than a salary guarantee. It’s a loan.”

• Physican consultant Roger G. Bonds, MBA, FMSD, CMSR, has seen his share of what he calls abusive contracts, where someone who is anti-physician and anti-employee crafts the employment contract. Abusive contracts might exert too much control over what the physician does, can’t do, and is reimbursed for. Oftentimes, physicians encounter those contracts in desirable metropolitan areas, where supply outpaces demand.

The goal should be to achieve at least what’s normal as far as compensation, responsibilities, reimbursement, and more, according to Bonds. For contracts that start too far off the mark, urologists should consider walking away. “This is your life we’re talking about, not just your job,” Bonds said.