There’s nothing quite as exciting as answering a phone call to hear the words: “You’re hired.” After hours of research and preparation, multiple interviews and a healthy dose of daydreaming about your first day, you’ve made it across the finish line. Except for one final hurdle—the negotiation process. Don’t overlook it. The negotiation process is a key determinant of success for a newly hired employee, and it doesn’t have to be stressful.
Approaching Negotiations
The purpose: Many people who don’t regularly engage in formal negotiations think the process is adversarial, combative and stressful. However, the main purpose of negotiations is not to create a winner and a loser, but to create a framework in which everyone involved is headed toward success.
Negotiation Issues
Some of the issues that may arise include:
Other duties as assigned: This phrase is ubiquitous in job descriptions and employment contracts. Often, the other duty is a simple request that is not quite what you do. But in the medical field, this can mean quite a bit more. Be sure to match this term up with your listed job duties and coverage requirements in the contract. Are there on-call obligations? Can you be told to move to a different shift without notice? If you think this may be a risk you’re not willing to take, you might ask legal counsel to negotiate a provision in which you would be able to renegotiate your compensation if such an event occurs.
Compensation: It’s important to consider all forms of compensation, and physicians and others working in healthcare should closely examine their compensation arrangement for potential legal problems. Two major concerns in a compensation arrangement are violations of the Stark law (i.e., physician self-referral) and the Anti-Kickback Statute. Broadly speaking, these laws protect Medicare and Medicaid from being billed as part of an inappropriate compensation arrangement. These arrangements can be complex and often seem innocent to the untrained eye. This is where legal counsel experienced in healthcare comes in. Unfortunately, a compensation structure that violates these laws cannot be negotiated. If an arrangement is improper, it must be restructured before anything is signed.
Professional liability insurance: Medical professionals should all have professional liability insurance to cover malpractice claims. In addition to knowing what plan your new employer is offering you, it is also important to know what sort of coverage you had in your previous position.
Determine if you have occurrence-based or claims-based coverage. Occurrence-based coverage plans are tied to alleged instances of malpractice. Claims-based coverage plans are tied to when the claim of malpractice is made. If you have occurrence-based coverage, you will be covered for any alleged instances of malpractice that occurred while you were under that plan. If you have claims-based coverage, you may need a tail coverage plan as well. Unless you stay with the same insurance company when you switch practices, your claims-based coverage will not cover any claims that originated during your time at the previous practice. Tail coverage can bridge that gap.
Before accepting your new job, make sure you know what coverage you will need to prevent headaches down the road. A point of negotiation may be whether you or your employer will pay for the tail coverage. After all, your new employer certainly would rather have you working than distracted by a costly malpractice claim.
Outside work: It’s important to know how much control your employer has over your work for organizations other than the employer. Contracts may have a provision that prevents you from providing medical services for anyone but your employer. This could prevent moonlighting, speaking or even volunteering. Employers may have a legitimate reason to prevent you from doing these things. However, if it’s important that you be able to engage in your profession outside this employment contract, it may be time to head to the negotiation table.
If you have a specific request, your employer may grant it. Or the employer may allow you to participate in certain activities under the condition that you remit all earnings from those activities to the employer. This may seem unfair, but could give you leverage in future discussions about compensation increases.
Restrictive covenants: Restrictive covenants, also known as non-competes, are common. Generally, a restrictive covenant limits what an employee can do after they leave their current job. For example, a physician who leaves a practice may have a restrictive covenant that prevents them from practicing medicine within a 50-mile radius of the current practice for two years after they leave their current job. A restrictive covenant may also prevent a physician from recruiting employees or patients away from the current practice.
Whether, and to what extent, a restrictive covenant will be enforced varies from state to state. Regardless, it’s important to review your contract for what you may not be able to do after your employment ends. Try to imagine how difficult it would be to make a living if you left this position. If you think it could affect your life or career path, it may be time to negotiate a reduced restriction, such as a smaller non-compete radius or a shorter lifespan of the covenant. A lawyer can help determine how your state will enforce a non-compete, which will create leverage during negotiations for a less restrictive covenant.
Employee vs. independent contractor: Another important consideration when reviewing your employment contract is whether you will be considered an employee or an independent contractor. A section in the contract will explicitly describe your relationship to the employer. From tax obligations to having control over your work to stability of work, your employment status determines a lot. Review the description of the arrangement from a practical standpoint to determine if any deal-breakers are present.
Your employment status can also have major implications when determining whether your contract complies with the Stark law and the Anti-Kickback Statute. As discussed above, an experienced healthcare attorney can help ensure you are not running afoul of any major laws.
Sign on the Dotted Line
By approaching employment negotiations as a collaboration, you demonstrate to your employer that you are considerate, focused and grounded. Reach out to an attorney experienced with reviewing employment agreements well in advance of your anticipated start date to ensure the process is completed timely and effectively.
Emily A. Johnson, JD, is a healthcare attorney with McDonald Hopkins LLC. Contact her at [email protected] or via https://www.mcdonaldhopkins.com.
