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Read Your Contract; It's Dangerous!

Weiss, Larry D. MD, JD

Author Information
doi: 10.1097/01.EEM.0000550379.55045.d8
    contracts, emergency medicine
    contracts, emergency medicine:
    contracts, emergency medicine

    Clinical emergency physicians have many significant professional problems, and most emanate from their contracts. Before signing any contract, physicians should hire a contract attorney to review it and serve as the physician's advocate. Common problems arise in contracts that could profoundly affect an EP's career.

    The indemnification clause is one such pernicious provision that began routinely appearing in physician contracts 15-20 years ago. They seem harmless at first glance, but consider that they are sometimes labeled “hold harmless” clauses. The most common form of indemnification clause in physician contracts states that each party will indemnify the other, or hold the other harmless, for all liability. This sounds “harmless” and reciprocal, but in practice it places the physician at huge risk for uninsurable losses.

    As a rule, an indemnification clause means that the primary actor in any alleged case of negligence must pay the attorney fees, court costs, and verdicts levied against all other defendants. The plaintiff in a typical medical malpractice lawsuit will allege that the physician committed malpractice, making the physician the primary actor. If the plaintiff also names the hospital and the practice group as defendants, the physician has to pay all the costs for them as well.

    Worse, malpractice insurance policies do not cover these indemnification expenses, and physicians have to pay these expenses out of pocket. Just one case can cost several million dollars, resulting in financial ruin for the physician. No benign reason exists for a contract to saddle physicians with such a burden.

    Don't Waive Your Rights

    Perhaps the most important advocacy issues in emergency medicine relate to the systematic abuse of emergency physician practice rights. Most important are waivers in physician contracts that deprive EPs of basic due process at hospitals. Due process within this setting means that adverse actions against medical staff privileges must not occur until after a fair hearing before a panel of the physician's peers.

    Many sources accord due process rights. Most importantly, the medical staff bylaws of virtually all hospitals in the United States guarantee full due process rights for members of the medical staff. Sometimes physicians voluntarily waive these rights, but a contract that forces a physician to waive due process rights should prompt seeking help from legal counsel. If the other contracting party insists on depriving the physician of due process, then she must decide whether to look elsewhere for employment.

    The demand for board-eligible and board-certified emergency physicians is currently strong. Most emergency physicians do not realize how much bargaining power they have, and in most cases they can look elsewhere and take a job at a hospital that does not deny their practice rights.

    Another contractual provision routinely used to limit the practice rights of emergency physicians is the restrictive covenant, or noncompete clause. Its most common form is a clause prohibiting the physician from working in a defined geographical location for a specific period of time. A restrictive covenant may state, for example, that a physician cannot work in a 50-mile radius from the hospital for a two-year period after termination of the contract.

    Restrictive covenants are most inappropriate in emergency medicine. We don't learn our profession from employers. Almost every emergency physician learns everything he needs to know during residency. Unlike physicians in many other specialties, we don't learn office management from employers. We don't have patients who will follow us to other hospitals. Restrictive covenants exist only to control and exploit emergency physicians. If a prospective employer will not remove a restrictive covenant from a contract, this creates another need for legal representation.

    Signing a contract may constitute the most hazardous step in an emergency physician's career. Physicians should secure legal counsel while navigating the process. An experienced contract lawyer can review almost any physician contract within three hours, and the cost will be quite modest, especially considered against the important consequences of signing a dangerous contract.

    Wolters Kluwer Health, Inc. All rights reserved.