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-Jon Appino – Contract Diagnostics – 6/20/20

We thought we’d share a few stories here on what it can look like out there if things aren’t done right – if the agreement is not negotiated or clarified on the front end appropriately.  Here is the first in a series that plays on what can go wrong….make sure you do all the correct due diligence upfront.  While you can never completely remove all risks, proper questions, and guidance on the front end can lower the risk of pain later.

A few years ago, we worked with an anesthesiologist on her physician contract review who was serving a small group of a few physicians. We were reviewing her agreement and pointed out to her that the contract just said she would be paid a certain flat salary and work ‘as they needed.’

There was no detail on any additional compensation for additional hours, or how many hours, or what call looked like. It was just a high-level contract without the critical details that are so important. It was basically, “You’ll work for us and we’ll pay you some money.”

We told her it was very important that she have this documented because it didn’t specify if she was being paid, say $300,000, but it wasn’t specified whether that was for a 40-hour week or an 80-hour week. I wasn’t sure about that contract. A salary of $300,000 might be good if it was three days a week, but not very good if you’re working seven days a week every week.

We recently received an email from her. It said, “Hey, guys, I just came off the Christmas to New Year’s week. [So, seven days.] I worked 108.5 hours. I’m not happy.” She used different language, of course, but it was evident said she was not happy in her position.

She also said they were telling her they were not going to pay her any more for the crazy hours. She wondered if this was okay. We asked her if she had gotten the schedule clarified before signing the contract. She said no—the agreement was that she would work whenever they wanted her to.

We told her we didn’t see a whole lot of wiggle room for her to demand or even request additional money. She mentioned that everyone else was at home with their families – here she was, her first Christmas, just out of training, where she was not a resident but was basically living at the hospital doing everything for all four people by herself and not getting paid additional.

That type of situation can come up. She happened to be in anesthesia, and of course, you know anesthesia—when you’re on service, you’re on service, so it can be busy. That’s just what her Christmas to New Year’s week was like.

Get clarity upfront.

I think about that story every time the holidays come around. The pain of the situation wasn’t due so much to the fact that she had to work Christmas because everybody does sometimes. It was really due to being shocked and appalled at the conditions, the hours, and the lack of additional compensation. She didn’t see it coming because she didn’t have the clarity upfront.

That is exactly our point. Newly trained people will say, “Look, Jon. I’ve got a lot of loans, and I want to work additional hours.  I want to take that extra weekend of call because it’s good money.” That is all fine, believe me I’m all for additional work for additional pay. But, if there’s no extra compensation, and you’re trading time for money, what is the point? I don’t think she had a break the next week. That was just how it worked. Why could her bosses do it? Because they were the boss, and she was not.

Collection-based structures

Many times, we hear from physicians who have collection-based structures. Let’s say you have a salary to get paid a percent based on the collections that come in for your work. If you’re not getting reports, and you don’t know what the collections are, and you stop working there today, but the insurance companies pay them in a month, you think that you’ve worked really hard and you’ll get that compensation, but you don’t.

We oftentimes see physicians with collection bonuses, which is common in anesthesia. We will see them not receive dollars that they’ve rightfully earned. They worked hard for them, they have traded their time and their expert opinion for them, but they won’t receive them because the contract wasn’t set up to receive the allocable dollars—based on if and when they came or based on the termination.

These situations, and many more like them that we have encountered, can teach a valuable lesson to every physician: make sure you understand how the details of your contract are arranged.  Set the expectations up front.  Due your due diligence. This is an area where we can help. Give us a call. We would love to help walk you through your contract so you can avoid unnecessary pain and heartaches down the road.  We specialize in physician contract reviews here – all 50 states – all specialties.  We know yours and how it should be set up.  Contact us today for a d discussion…